Ireland
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98-1341933
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State or other jurisdiction of incorporation or organization
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(I.R.S. Employer Identification No.)
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10 Earlsfort Terrace
Dublin 2, Ireland
D02 T380
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Not Applicable
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: +011-1-485-1200
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Title of each class
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Trading Symbol (s)
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Name of exchange on which registered
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American Depositary Shares*
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AVDL
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The Nasdaq Global Market
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Ordinary Shares, nominal value $0.01 per share**
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AVDL
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The Nasdaq Global Market
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*
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American Depositary Shares may be evidenced by American Depository Receipts. Each American Depositary Share represents one (1) Ordinary Share.
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**
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Not for trading, but only in connection with the listing of American Depositary Shares. on The Nasdaq Global Market.
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Page #
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Item 1.
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Item 1A.
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Item 1B.
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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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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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•
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Our reliance on a single product candidate, FT218, the expected completion of the Phase III clinical trial for FT218 and our ability to obtain regulatory approval of and successfully commercialize FT218;
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Our plans and expectations regarding the effectiveness of our restructuring plan announced in February 2019, including our ability to achieve the desired cost savings;
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Any further restructuring actions that may be required and our ability to obtain any required consents (including any consents required pursuant to the Indenture governing our exchange notes due 2023, or the 2023 Notes);
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Our reliance on a small number of products to generate all or substantially all of our revenue and the competitive pressures that these products face;
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The lack of patent protection for three of our approved products, Bloxiverz, Vazculep and Akovaz;
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Our ability to successfully launch Nouress in the United States;
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Our ability to develop and obtain U.S. Food and Drug Administration (“FDA”), approval for any future potential “unapproved marketed drug” product candidates in the future;
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Our ability to continue to service the 2023 Notes, including making the ongoing interest payments on the 2023 Notes, settling exchanges of the 2023 Notes in cash or completing any required repurchases of the 2023 Notes;
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The ability of our product candidates and products to gain market acceptance;
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Our ability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our products and product candidates;
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Our dependence on a limited number of suppliers for the manufacturing of our products and certain raw materials in our products and any failure of such suppliers to deliver sufficient quantities of these raw materials, which could have a material adverse effect on our business;
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Our ability to finance our operations on acceptable terms, either through the raising of capital, the incurrence of convertible or other indebtedness or through strategic financing or commercialization partnerships;
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Our expectations about the potential market sizes and market participation potential for our approved or proposed products;
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Our ability to retain members of our management team and our employees; and
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Competition existing today or that will likely arise in the future.
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Bloxiverz (neostigmine methylsulfate injection) - Bloxiverz was approved by the FDA in May 2013 and was launched in July 2013. Bloxiverz is a drug used intravenously in the operating room to reverse the effects of non-depolarizing neuromuscular blocking agents after surgery. Bloxiverz was the first FDA-approved version of neostigmine methylsulfate. Today, neostigmine is one of the two most frequently used products for the reversal of the effects of other agents used for neuromuscular blocks. There are approximately 2,500 vials of neostigmine sold annually in the U.S.
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Vazculep (phenylephrine hydrochloride injection) - Vazculep was approved by the FDA in June 2014 and was launched in October 2014. Vazculep is indicated for the treatment of clinically important hypotension occurring in the setting of anesthesia. There are approximately 7,100 vials of Vazculep sold annually in the U.S.
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Akovaz (ephedrine sulfate injection). Akovaz, was approved by the FDA in April 2016 and was launched in August 2016. Akovaz was the first FDA approved formulation of ephedrine sulfate, 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. There are approximately 7,500 vials of Akovaz sold annually in the U.S.
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(a)
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up to $250,000 in aggregate of ordinary shares, nominal value US$0.01 per share (the “Ordinary Shares”), each of which may be represented by ADSs, preferred shares, nominal value US$0.01 per share (the “Preferred Shares”), debt securities (the “Debt Securities”), warrants to purchase Ordinary Shares, ADSs, Preferred Shares and/or Debt Securities (the “Warrants”), and/or units consisting of Ordinary Shares, ADSs, Preferred Shares, one or more Debt Securities or Warrants in one or more series, in any combination, pursuant to the terms of the 2020 Shelf Registration Statement, the base prospectus contained in the 2020 Shelf Registration Statement (the “Base Prospectus”), and any amendments or supplements thereto (together, the “Securities”); including
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(b)
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up to $50,000 of ADSs that may be issued and sold from time to time pursuant to the terms of an Open Market Sale AgreementSM (“the Sales Agreement”), entered into with Jefferies LLC on February 4, 2020 (the “Sales Agreement”), the 2020 Shelf Registration Statement, the Base Prospectus and the terms of the sales agreement prospectus contained in the 2020 Shelf Registration Statement.
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Micropump® Technology. Our Micropump allows for the development of modified and/or controlled release solid, oral dosage formulations of drugs. Micropump-carvedilol and Micropump-aspirin formulations have been approved in the U.S. Further, Micropump technology is being employed in our investigational FT218 product.
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LiquiTime®. Our LiquiTime technology allows for development of modified/controlled release oral products in a liquid suspension formulation, which may make such formulations particularly well suited for children and/or patients having issues swallowing tablets or capsules. Although we own this technology, we are currently not pursuing any commercial pharmaceutical drug development opportunities using it.
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Medusa™. Our Medusa technology allows for the development of extended-/modified-release injectable dosage formulations of drugs (e.g., peptides, polypeptides, proteins, and small molecules). Although we own this technology, we are currently not pursuing any commercial pharmaceutical drug development opportunities using it.
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FT218 Patents. We were awarded our first FT218-related U.S. patent on April 30, 2019, which is directed to modified release formulations of gamma-hydroxybutyrate (“GHB”), and which expires in 2037. We have a number of additional, FT218-related patent applications pending at the USPTO as well as at non-U.S. patent offices.
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Nouress Patents. We have two issued U.S. patents directed to cysteine solutions and methods of using cysteine solutions, both of which are listed in FDA’s Orange Book for Nouress, and both of which expire in 2039. Further, we have several Nouress-related patent applications pending at the USPTO.
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Drug Delivery Technology Patents. Our drug delivery technologies are the subject of certain patents, including: (i) for Micropump, patents relating to coating technologies that provide for delayed and sustained release of an active ingredient and that tend to allow for absorption in the upper part of the intestinal tract (expiring in 2025 in the U.S. and 2022 in non-U.S. jurisdictions); (ii) for LiquiTime, patents relating to film-coated microcapsules and a method comprising orally administering such microcapsules to a patient (expiring in 2023); and (iii) for Medusa, patents relating to an aqueous colloidal suspension of low viscosity based on submicronic particles of water-soluble biodegradable polymer PO (polyolefin) carrying hydrophobic groups (expiring in 2023).
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•
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the FDA, the European Medicines Agency (“EMA”), the competent authority of an EU Member State or an Institutional Review Board (“IRB”), or an Ethics Committee (EU equivalent to IRB), or our partners may delay or halt applicable clinical trials;
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we or our partners may face slower than expected rate of patient recruitment and enrollment in clinical trials, or may devote insufficient funding to the clinical trials;
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our drug delivery technologies and drug products may be found to be ineffective or to cause harmful side effects, or may fail during any stage of pre-clinical testing or clinical trials;
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we or our partners may find that certain products cannot be manufactured on a commercial scale and, therefore, may not be economical or feasible to produce;
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we or our partners may face delays in completing our clinical trials due to circumstances outside of our control, including natural disasters, labor or civil unrest, global health concerns or pandemics or acts of war or terrorism; or
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our products could fail to obtain regulatory approval or, if approved, could fail to achieve market acceptance, could fail to be included within the pricing and reimbursement schemes of the U.S. or EU Member States, or could be precluded from commercialization by proprietary rights of third parties.
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the scope of regulatory approvals, including limitations or warnings in a product’s regulatory-approved labeling; or other restrictions under a FDA Risk Evaluations and Mitigations Strategies (“REMS”), program;
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in the case of any new UMD product we may successfully pursue, whether and the extent to which the FDA removes competing products from the market;
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in the case of our product candidates that are controlled substances the U.S. Drug Enforcement Administration (“DEA”), scheduling classification;
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demonstration of the clinical safety and efficacy of the product or technology;
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the absence of evidence of undesirable side effects of the product or technology that delay or extend trials;
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the lack of regulatory delays or other regulatory actions;
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its cost-effectiveness and related access to payor coverage;
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its potential advantage over alternative treatment methods;
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the availability of third-party reimbursement; and
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the marketing and distribution support it receives.
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the jurisdictions in which profits are determined to be earned and taxed;
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changes in the valuation of our deferred tax assets and liabilities;
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the resolution of issues arising from tax audits with various tax authorities;
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changes in share-based compensation expense;
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changes in domestic or international tax laws or the interpretation of such tax laws;
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changes in available tax credits;
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increases in expenses not deductible for tax purposes, including increases in the fair value of related party payables, write-offs of acquired in-process R&D and impairment of goodwill in connection with acquisitions;
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adjustments to estimated taxes upon finalization of various tax returns;
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the tax effects of purchase accounting for acquisitions that may cause fluctuations between reporting periods.
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adverse drug experiences and other reporting requirements;
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product promotion and marketing;
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APIs and/or product manufacturing, including cGMP compliance;
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record keeping;
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distribution of drug samples;
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required clinical trials and/or post-marketing studies;
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authorization renewal procedures;
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authorization variation procedures;
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compliance with any required REMS;
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updating safety and efficacy information;
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processing of personal data;
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use of electronic records and signatures; and
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changes to product manufacturing or labeling.
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failure in obtaining regulatory approval to commence a trial;
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failure in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
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failure in obtaining institutional review board or ethics committee approval at each site;
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failure in recruiting suitable patients to participate in a trial;
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failure in having patients complete a trial or return for post-treatment follow-up;
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failure in clinical sites dropping out of a trial;
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failure in adding new sites; or
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failure in manufacturing sufficient quantities of medicine candidates for use in clinical trials.
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issue warning letters;
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impose fines;
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seize products or request or order recalls;
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issue injunctions to stop future sales of products;
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refuse to permit products to be imported into, or exported out of, the U.S. or the E.U.;
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suspend or limit our production;
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withdraw or vary approval of marketing applications;
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order the competent authorities of EU Member States to withdraw or vary national authorization; and
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initiate criminal prosecutions.
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warning letters or untitled letters;
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fines and civil penalties;
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delays in clearing or approving, or refusal to clear or approve, products;
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withdrawal, suspension or variation of approval of products; product recall or seizure;
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orders to the competent authorities of EU Member States to withdraw or vary national authorization;
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orders for physician notification or device repair, replacement or refund;
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interruption of production;
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operating restrictions;
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injunctions; and
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criminal prosecution.
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fluctuations in our operating results;
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announcements of technological partnerships, innovations or new products by us or our competitors;
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actions with respect to the acquisition of new or complementary businesses;
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governmental regulations;
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developments in patent or other proprietary rights owned by us or others;
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public concern as to the safety of drug delivery technologies developed by us or drugs developed by others using our platform;
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the results of pre-clinical testing and clinical studies or trials by us or our competitors;
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adverse events related to our products or products developed by pharmaceutical and biotechnology company partners that use our drug delivery technologies;
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lack of efficacy of our products;
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litigation;
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decisions by our pharmaceutical and biotechnology company partners relating to the products incorporating our technologies;
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the perception by the market of specialty pharma, biotechnology, and high technology companies generally;
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general market conditions, including the impact of the current financial environment; and
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the dilutive impact of any new equity or convertible debt securities we may issue or have issued.
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the demand for our drug delivery technologies and products;
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the level of product and price competition;
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our ability to develop new partnerships and additional commercial applications for our products;
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our ability to control our costs;
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our ability to broaden our customer base;
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the effectiveness of our marketing strategy;
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our effective tax rate;
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the effectiveness of our partners’ marketing strategy for products that use our technology; and
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general economic conditions.
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the development and acquisition of new products and drug delivery technologies;
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the progress of our research and product development programs; and
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the timing of, and amounts received from, future product sales, product development fees and licensing revenue and royalties.
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permit our board of directors to issue preferred shares with such rights and preferences as they may designate, subject to applicable law;
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impose advance notice requirements for shareholder proposals and director nominations to be considered at annual shareholder meetings; and
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require the approval of a supermajority of the voting power of our shares entitled to vote at a general meeting of shareholders to amend or repeal any provisions of our articles of association.
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effect service of process within the U.S. against us and our non-U.S. resident directors and officers;
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enforce U.S. court judgments based upon the civil liability provisions of the U.S. federal securities laws against us and our non-U.S. resident directors and officers in Ireland; or
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bring an original action in an Irish court to enforce liabilities based upon the U.S. federal securities laws against us and our non-U.S. resident directors and officers.
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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2019 Price Range
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2018 Price Range
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High
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Low
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High
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Low
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First quarter
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$
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3.29
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$
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1.44
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$
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11.70
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$
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6.76
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Second quarter
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3.19
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1.09
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7.78
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5.89
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Third quarter
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4.47
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1.92
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7.14
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4.08
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Fourth quarter
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7.70
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3.34
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|
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4.66
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|
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1.74
|
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Statement of (Loss) Income Data:
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2019
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2018
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2017
|
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2016
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2015
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||||||||||
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Total revenues
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$
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59,215
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$
|
103,269
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|
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$
|
173,245
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$
|
150,246
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|
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$
|
173,009
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|
Gross profit (a)
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|
47,090
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|
85,753
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|
|
156,944
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|
|
136,998
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|
161,599
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Operating (loss) income (b)
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(24,112
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)
|
|
(104,926
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)
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89,505
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(4,965
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)
|
|
70,758
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Net (loss) income
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|
(33,226
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)
|
|
(95,304
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)
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68,271
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(41,276
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)
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41,798
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Net (loss) income per share - basic
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$
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(0.89
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)
|
|
$
|
(2.55
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)
|
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$
|
1.69
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|
|
$
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(1.00
|
)
|
|
$
|
1.03
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Net (loss) income per share - diluted
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|
$
|
(0.89
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)
|
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$
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(2.55
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)
|
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$
|
1.63
|
|
|
$
|
(1.00
|
)
|
|
$
|
0.96
|
|
Balance Sheet Data:
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2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
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|||||
Cash and cash equivalents
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$
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9,774
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|
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$
|
9,325
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$
|
16,564
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|
|
$
|
39,215
|
|
|
$
|
65,064
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|
Marketable securities
|
|
54,384
|
|
|
90,590
|
|
|
77,511
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|
|
114,980
|
|
|
79,738
|
|
|||||
Goodwill
|
|
18,491
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|
|
18,491
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|
|
18,491
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|
|
18,491
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|
|
18,491
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|
|||||
Intangible assets, net
|
|
813
|
|
|
1,629
|
|
|
92,289
|
|
|
22,837
|
|
|
15,825
|
|
|||||
Total assets
|
|
151,436
|
|
|
190,300
|
|
|
253,277
|
|
|
245,482
|
|
|
215,081
|
|
|||||
Long-term debt (incl. current portion)
|
|
121,686
|
|
|
115,840
|
|
|
267
|
|
|
815
|
|
|
1,118
|
|
|||||
Long-term related party payable (incl. current portion)
|
|
17,327
|
|
|
28,840
|
|
|
98,925
|
|
|
169,347
|
|
|
122,693
|
|
2019:
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
$
|
16,437
|
|
|
$
|
17,554
|
|
|
$
|
14,229
|
|
|
$
|
10,995
|
|
Gross profit (a)
|
13,171
|
|
|
13,932
|
|
|
11,406
|
|
|
8,581
|
|
||||
Operating loss
|
(8,167
|
)
|
|
(4,451
|
)
|
|
(4,147
|
)
|
|
(7,347
|
)
|
||||
Net loss
|
(13,018
|
)
|
|
(8,605
|
)
|
|
(8,864
|
)
|
|
(2,739
|
)
|
||||
Net loss per share - basic
|
(0.35
|
)
|
|
(0.23
|
)
|
|
(0.24
|
)
|
|
(0.07
|
)
|
||||
Net loss per share - diluted
|
(0.35
|
)
|
|
(0.23
|
)
|
|
(0.24
|
)
|
|
(0.07
|
)
|
2018:
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
$
|
33,293
|
|
|
$
|
29,230
|
|
|
$
|
19,826
|
|
|
$
|
20,920
|
|
Gross profit (a)
|
26,701
|
|
|
25,718
|
|
|
16,706
|
|
|
16,628
|
|
||||
Operating loss (b)
|
(12,625
|
)
|
|
(2,785
|
)
|
|
(14,095
|
)
|
|
(75,421
|
)
|
||||
Net loss
|
(12,236
|
)
|
|
(3,438
|
)
|
|
(15,771
|
)
|
|
(63,859
|
)
|
||||
Net loss per share - basic
|
(0.32
|
)
|
|
(0.09
|
)
|
|
(0.43
|
)
|
|
(1.72
|
)
|
||||
Net loss per share - diluted
|
(0.32
|
)
|
|
(0.09
|
)
|
|
(0.43
|
)
|
|
(1.72
|
)
|
•
|
Bloxiverz (neostigmine methylsulfate injection) - Bloxiverz was approved by the FDA in May 2013 and was launched in July 2013. Bloxiverz is a drug used intravenously in the operating room to reverse the effects of non-depolarizing neuromuscular blocking agents after surgery. Bloxiverz was the first FDA-approved version of neostigmine methylsulfate. Today, neostigmine is one of the two most frequently used products for the reversal of the effects of other agents used for neuromuscular blocks.
|
•
|
Vazculep (phenylephrine hydrochloride injection) - Vazculep was approved by the FDA in June 2014 and was launched in October 2014. Vazculep is indicated for the treatment of clinically important hypotension occurring in the setting of anesthesia.
|
•
|
Akovaz (ephedrine sulfate injection). Akovaz, was approved by the FDA in April 2016 and was launched in August 2016. Akovaz was the first FDA approved formulation of ephedrine sulfate, 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.
|
•
|
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 us.
|
•
|
Possible Net Loss from Operations in 2020: In part because we expect sales of our hospital products to significantly decline from 2019 and we will incur substantial expenses to further the clinical development of FT218, we likely will incur a net loss in 2020.
|
(a)
|
up to $250,000 in aggregate of ordinary shares, nominal value US$0.01 per share (the “Ordinary Shares”), each of which may be represented by ADSs, preferred shares, nominal value US$0.01 per share (the “Preferred Shares”), debt securities (the “Debt Securities”), warrants to purchase Ordinary Shares, ADSs, Preferred Shares and/or Debt Securities (the “Warrants”), and/or units consisting of Ordinary Shares, ADSs, Preferred Shares, one or more Debt Securities or Warrants in one or more series, in any combination, pursuant to the terms of the 2020 Shelf Registration Statement, the base prospectus contained in the 2020 Shelf Registration Statement (the “Base Prospectus”), and any amendments or supplements thereto (together, the “Securities”); including
|
(b)
|
up to $50,000 of ADSs that may be issued and sold from time to time pursuant to the terms of an Open Market Sale AgreementSM (“the Sales Agreement”), entered into with Jefferies LLC on February 4, 2020 (the “Sales Agreement”), the 2020 Shelf Registration Statement, the Base Prospectus and the terms of the sales agreement prospectus contained in the 2020 Shelf Registration Statement.
|
•
|
Revenue was $59,215 for the year ended December 31, 2019 compared to $103,269 in the same period last year. 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 $24,112 for the year ended December 31, 2019 compared to an operating loss of $104,926 for the year ended December 31, 2018. The primary reasons for the decrease in operating loss was due to the 2018 impairment of the Noctiva intangible asset of $66,087 and lower SG&A and R&D expenses in the current period of $70,176 and $6,412, respectively, primarily driven by the exit of Noctiva. These decreases were partially offset by lower total revenues of $44,054 as discussed above and a decrease of $23,576 in the gain in fair value of related party contingent consideration recognized during the year ended December 31, 2018 of $22,731 compared to expense of $845 recognized during the current year.
|
•
|
Net loss was $33,226 for the year ended December 31, 2019 compared to net loss of $95,304 in the same period last year.
|
•
|
Diluted net loss per share was $0.89 for the year ended December 31, 2019 compared to diluted net loss per share of $2.55 in the same period last year.
|
•
|
Cash and marketable securities decreased $35,757 to $64,158 at December 31, 2019 from $99,915 at December 31, 2018. This decrease was largely driven from $38,325 use of cash in operations.
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Comparative Statements of (Loss) Income:
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Product sales
|
|
$
|
59,215
|
|
|
$
|
101,423
|
|
|
$
|
(42,208
|
)
|
|
(41.6
|
)%
|
License revenue
|
|
—
|
|
|
1,846
|
|
|
(1,846
|
)
|
|
(100.0
|
)%
|
|||
Total revenues
|
|
59,215
|
|
|
103,269
|
|
|
(44,054
|
)
|
|
(42.7
|
)%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of products
|
|
12,125
|
|
|
17,516
|
|
|
(5,391
|
)
|
|
(30.8
|
)%
|
|||
Research and development expenses
|
|
32,917
|
|
|
39,329
|
|
|
(6,412
|
)
|
|
(16.3
|
)%
|
|||
Selling, general and administrative expenses
|
|
30,183
|
|
|
100,359
|
|
|
(70,176
|
)
|
|
(69.9
|
)%
|
|||
Intangible asset amortization
|
|
816
|
|
|
6,619
|
|
|
(5,803
|
)
|
|
(87.7
|
)%
|
|||
Changes in fair value of related party contingent consideration
|
|
845
|
|
|
(22,731
|
)
|
|
23,576
|
|
|
103.7
|
%
|
|||
Impairment of intangible asset
|
|
—
|
|
|
66,087
|
|
|
(66,087
|
)
|
|
(100.0
|
)%
|
|||
Restructuring costs
|
|
6,441
|
|
|
1,016
|
|
|
5,425
|
|
|
534.0
|
%
|
|||
Total operating expenses
|
|
83,327
|
|
|
208,195
|
|
|
(124,868
|
)
|
|
(60.0
|
)%
|
|||
Operating (loss) income
|
|
(24,112
|
)
|
|
(104,926
|
)
|
|
80,814
|
|
|
77.0
|
%
|
|||
Investment and other income, net
|
|
1,069
|
|
|
452
|
|
|
617
|
|
|
136.5
|
%
|
|||
Interest expense
|
|
(12,483
|
)
|
|
(10,622
|
)
|
|
(1,861
|
)
|
|
(17.5
|
)%
|
|||
Loss on deconsolidation of subsidiary
|
|
(2,678
|
)
|
|
—
|
|
|
(2,678
|
)
|
|
(100.0
|
)%
|
|||
Other (expense) income - changes in fair value of related party payable
|
|
(378
|
)
|
|
1,899
|
|
|
(2,277
|
)
|
|
(119.9
|
)%
|
|||
(Loss) income before income taxes
|
|
(38,582
|
)
|
|
(113,197
|
)
|
|
74,615
|
|
|
65.9
|
%
|
|||
Income tax (benefit) provision
|
|
(5,356
|
)
|
|
(17,893
|
)
|
|
12,537
|
|
|
70.1
|
%
|
|||
Net (loss) income
|
|
$
|
(33,226
|
)
|
|
$
|
(95,304
|
)
|
|
$
|
62,078
|
|
|
65.1
|
%
|
Net (loss) income per share - diluted
|
|
$
|
(0.89
|
)
|
|
$
|
(2.55
|
)
|
|
$
|
1.66
|
|
|
65.1
|
%
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Revenues
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Bloxiverz
|
|
$
|
7,479
|
|
|
$
|
20,850
|
|
|
$
|
(13,371
|
)
|
|
(64.1
|
)%
|
Vazculep
|
|
33,152
|
|
|
42,916
|
|
|
(9,764
|
)
|
|
(22.8
|
)%
|
|||
Akovaz
|
|
18,642
|
|
|
33,759
|
|
|
(15,117
|
)
|
|
(44.8
|
)%
|
|||
Other
|
|
(58
|
)
|
|
3,898
|
|
|
(3,956
|
)
|
|
(101.5
|
)%
|
|||
Product sales
|
|
59,215
|
|
|
101,423
|
|
|
(42,208
|
)
|
|
(41.6
|
)%
|
|||
License revenue
|
|
—
|
|
|
1,846
|
|
|
(1,846
|
)
|
|
(100.0
|
)%
|
|||
Total revenues
|
|
$
|
59,215
|
|
|
$
|
103,269
|
|
|
$
|
(44,054
|
)
|
|
(42.7
|
)%
|
|
|
Years Ended December 31,
|
Increase / (Decrease)
|
||||||||||||
Cost of Products
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Cost of products
|
|
$
|
12,125
|
|
|
$
|
17,516
|
|
|
$
|
(5,391
|
)
|
|
(30.8
|
)%
|
Percentage of sales
|
|
20.5
|
%
|
|
17.0
|
%
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Research and Development Expenses
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Research and development expenses
|
|
$
|
32,917
|
|
|
$
|
39,329
|
|
|
$
|
(6,412
|
)
|
|
(16.3
|
)%
|
Percentage of sales
|
|
55.6
|
%
|
|
38.1
|
%
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Intangibles Asset Amortization
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Intangible asset amortization
|
|
$
|
816
|
|
|
$
|
6,619
|
|
|
$
|
(5,803
|
)
|
|
(87.7
|
)%
|
Percentage of sales
|
|
1.4
|
%
|
|
6.4
|
%
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Impairment of Intangible Asset
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Impairment of intangible asset
|
|
$
|
—
|
|
|
$
|
66,087
|
|
|
$
|
(66,087
|
)
|
|
(100.0
|
)%
|
Percentage of sales
|
|
—
|
%
|
|
64.0
|
%
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Restructuring Costs
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Restructuring costs
|
|
$
|
6,441
|
|
|
$
|
1,016
|
|
|
$
|
5,425
|
|
|
534.0
|
%
|
Percentage of sales
|
|
10.9
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Investment and Other Income, net
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Investment and other income, net
|
|
$
|
1,069
|
|
|
$
|
452
|
|
|
$
|
617
|
|
|
136.5
|
%
|
Percentage of sales
|
|
1.8
|
%
|
|
0.4
|
%
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Interest Expense
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
$
|
12,483
|
|
|
$
|
10,622
|
|
|
$
|
1,861
|
|
|
17.5
|
%
|
Percentage of sales
|
|
(21.1
|
)%
|
|
(10.3
|
)%
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Loss on Deconsolidation of Subsidiary
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Loss on deconsolidation of subsidiary
|
|
$
|
(2,678
|
)
|
|
$
|
—
|
|
|
$
|
(2,678
|
)
|
|
(100.0
|
)%
|
Percentage of sales
|
|
(4.5
|
)%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Other (Expense) Income - Changes in Fair Value of Related Party Payable
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Other (expense) income - changes in fair value of related party payable
|
|
$
|
(378
|
)
|
|
$
|
1,899
|
|
|
$
|
(2,277
|
)
|
|
(119.9
|
)%
|
Percentage of sales
|
|
(0.6
|
)%
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
Increase / (Decrease)
|
|||||||||||
Income Taxes
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Income tax (benefit) provision
|
|
$
|
(5,356
|
)
|
|
$
|
(17,893
|
)
|
|
$
|
12,537
|
|
|
70.1
|
%
|
Percentage of (loss) income before income taxes
|
|
13.9
|
%
|
|
15.8
|
%
|
|
|
|
|
|
|
Purchase Commitments:
|
|
Balance
|
||
|
|
|
||
2020
|
|
$
|
1,434
|
|
2021
|
|
1,430
|
|
|
2022
|
|
1,430
|
|
|
2023
|
|
1,430
|
|
|
2024
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
5,724
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations:
|
|
Total
|
|
Less than
1 Year |
|
1 to 3
Years |
|
3 to 5
Years |
|
More than
5 Years |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt and interest
|
|
$
|
166,391
|
|
|
$
|
6,469
|
|
|
$
|
12,938
|
|
|
$
|
146,984
|
|
|
$
|
—
|
|
Long-term related party payable
(undiscounted) |
|
29,847
|
|
|
5,554
|
|
|
5,181
|
|
|
4,262
|
|
|
14,850
|
|
|||||
Purchase commitments
|
|
5,724
|
|
|
1,434
|
|
|
2,860
|
|
|
1,430
|
|
|
—
|
|
|||||
Operating leases
|
|
3,368
|
|
|
779
|
|
|
1,167
|
|
|
1,216
|
|
|
206
|
|
|||||
Total contractual cash obligations
|
|
$
|
205,330
|
|
|
$
|
14,236
|
|
|
$
|
22,146
|
|
|
$
|
153,892
|
|
|
$
|
15,056
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|||
Product sales
|
|
$
|
59,215
|
|
|
$
|
101,423
|
|
|
$
|
172,841
|
|
License revenue
|
|
—
|
|
|
1,846
|
|
|
404
|
|
|||
Total revenues
|
|
59,215
|
|
|
103,269
|
|
|
173,245
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|||
Cost of products
|
|
12,125
|
|
|
17,516
|
|
|
16,301
|
|
|||
Research and development expenses
|
|
32,917
|
|
|
39,329
|
|
|
33,418
|
|
|||
Selling, general and administrative expenses
|
|
30,183
|
|
|
100,359
|
|
|
58,860
|
|
|||
Intangible asset amortization
|
|
816
|
|
|
6,619
|
|
|
3,659
|
|
|||
Changes in fair value of related party contingent consideration
|
|
845
|
|
|
(22,731
|
)
|
|
(31,040
|
)
|
|||
Impairment of intangible asset
|
|
—
|
|
|
66,087
|
|
|
—
|
|
|||
Restructuring costs
|
|
6,441
|
|
|
1,016
|
|
|
2,542
|
|
|||
Total operating expenses
|
|
83,327
|
|
|
208,195
|
|
|
83,740
|
|
|||
Operating (loss) income
|
|
(24,112
|
)
|
|
(104,926
|
)
|
|
89,505
|
|
|||
Investment and other income, net
|
|
1,069
|
|
|
452
|
|
|
2,136
|
|
|||
Interest expense
|
|
(12,483
|
)
|
|
(10,622
|
)
|
|
(1,052
|
)
|
|||
Loss on deconsolidation of subsidiary
|
|
(2,678
|
)
|
|
—
|
|
|
—
|
|
|||
Other (expense) income - changes in fair value of related party payable
|
|
(378
|
)
|
|
1,899
|
|
|
2,071
|
|
|||
(Loss) income before income taxes
|
|
(38,582
|
)
|
|
(113,197
|
)
|
|
92,660
|
|
|||
Income tax (benefit) provision
|
|
(5,356
|
)
|
|
(17,893
|
)
|
|
24,389
|
|
|||
Net (loss) income
|
|
$
|
(33,226
|
)
|
|
$
|
(95,304
|
)
|
|
$
|
68,271
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income per share - basic
|
|
$
|
(0.89
|
)
|
|
$
|
(2.55
|
)
|
|
$
|
1.69
|
|
Net (loss) income per share - diluted
|
|
$
|
(0.89
|
)
|
|
$
|
(2.55
|
)
|
|
$
|
1.63
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of shares outstanding - basic
|
|
37,403
|
|
|
37,325
|
|
|
40,465
|
|
|||
Weighted average number of shares outstanding - diluted
|
|
37,403
|
|
|
37,325
|
|
|
41,765
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net (loss) income
|
|
$
|
(33,226
|
)
|
|
$
|
(95,304
|
)
|
|
$
|
68,271
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation (loss) gain
|
|
(117
|
)
|
|
(419
|
)
|
|
134
|
|
|||
Net other comprehensive income, net of ($43), ($18), $28 tax, respectively
|
|
727
|
|
|
269
|
|
|
165
|
|
|||
Total other comprehensive income (loss), net of tax
|
|
610
|
|
|
(150
|
)
|
|
299
|
|
|||
Total comprehensive (loss) income
|
|
$
|
(32,616
|
)
|
|
$
|
(95,454
|
)
|
|
$
|
68,570
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
9,774
|
|
|
$
|
9,325
|
|
Marketable securities
|
|
54,384
|
|
|
90,590
|
|
||
Accounts receivable
|
|
8,281
|
|
|
11,330
|
|
||
Inventories, net
|
|
3,570
|
|
|
4,770
|
|
||
Research and development tax credit receivable
|
|
2,107
|
|
|
283
|
|
||
Prepaid expenses and other current assets
|
|
4,264
|
|
|
8,553
|
|
||
Total current assets
|
|
82,380
|
|
|
124,851
|
|
||
Property and equipment, net
|
|
544
|
|
|
1,911
|
|
||
Operating lease right-of-use assets
|
|
3,612
|
|
|
—
|
|
||
Goodwill
|
|
18,491
|
|
|
18,491
|
|
||
Intangible assets, net
|
|
813
|
|
|
1,629
|
|
||
Research and development tax credit receivable
|
|
6,322
|
|
|
7,272
|
|
||
Other non-current assets
|
|
39,274
|
|
|
36,146
|
|
||
Total assets
|
|
$
|
151,436
|
|
|
$
|
190,300
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
106
|
|
Current portion of long-term related party payable
|
|
5,554
|
|
|
9,439
|
|
||
Current portion of operating lease liability
|
|
645
|
|
|
—
|
|
||
Accounts payable
|
|
6,100
|
|
|
3,503
|
|
||
Accrued expenses
|
|
19,810
|
|
|
21,695
|
|
||
Other current liabilities
|
|
3,875
|
|
|
3,640
|
|
||
Total current liabilities
|
|
35,984
|
|
|
38,383
|
|
||
Long-term debt, less current portion
|
|
121,686
|
|
|
115,734
|
|
||
Long-term related party payable, less current portion
|
|
11,773
|
|
|
19,401
|
|
||
Long-term operating lease liability
|
|
2,319
|
|
|
—
|
|
||
Other non-current liabilities
|
|
8,873
|
|
|
14,002
|
|
||
Total liabilities
|
|
180,635
|
|
|
187,520
|
|
||
|
|
|
|
|
||||
Shareholders’ (deficit) equity:
|
|
|
|
|
|
|
||
Preferred shares, nominal value of $0.01 per share; 50,000 shares authorized; none issued or outstanding at December 31, 2019 and December 31, 2018, respectively
|
|
—
|
|
|
—
|
|
||
Ordinary shares, nominal value of $0.01 per share; 500,000 shares authorized; 42,927 issued and 37,520 outstanding at December 31, 2019, and 42,720 issued and 37,313 outstanding at December 31, 2018
|
|
429
|
|
|
427
|
|
||
Treasury shares, at cost, 5,407 shares held at December 31, 2019 and December 31, 2018, respectively
|
|
(49,998
|
)
|
|
(49,998
|
)
|
||
Additional paid-in capital
|
|
434,391
|
|
|
433,756
|
|
||
Accumulated deficit
|
|
(391,215
|
)
|
|
(357,989
|
)
|
||
Accumulated other comprehensive loss
|
|
(22,806
|
)
|
|
(23,416
|
)
|
||
Total shareholders’ (deficit) equity
|
|
(29,199
|
)
|
|
2,780
|
|
||
Total liabilities and shareholders’ (deficit) equity
|
|
$
|
151,436
|
|
|
$
|
190,300
|
|
|
|
Ordinary shares
|
|
Additional
|
|
Accumulated
|
|
Accumulated
other
comprehensive
|
|
Treasury Shares
|
|
Total
shareholders’
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
paid-in capital
|
|
deficit
|
|
loss
|
|
Shares
|
|
Amount
|
|
(deficit) equity
|
||||||||||||||
Balance, December 31, 2016
|
|
41,371
|
|
|
$
|
414
|
|
|
$
|
385,020
|
|
|
$
|
(319,800
|
)
|
|
$
|
(23,565
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
42,069
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,271
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,271
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
299
|
|
|
—
|
|
|
—
|
|
|
299
|
|
||||||
Exercise of stock options
|
|
69
|
|
|
—
|
|
|
396
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
396
|
|
||||||
Vesting of restricted shares
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
8,062
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,062
|
|
||||||
Share repurchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,117
|
|
|
(22,361
|
)
|
|
(22,361
|
)
|
||||||
Adjustment to accumulated deficit (see
Note 13: Income Taxes)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,156
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,156
|
)
|
||||||
Balance, December 31, 2017
|
|
41,463
|
|
|
414
|
|
|
393,478
|
|
|
(262,685
|
)
|
|
(23,266
|
)
|
|
2,117
|
|
|
(22,361
|
)
|
|
85,580
|
|
||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(95,304
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(95,304
|
)
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
||||||
Exercise of stock options
|
|
82
|
|
|
1
|
|
|
534
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
535
|
|
||||||
Exercise of warrants
|
|
603
|
|
|
6
|
|
|
2,905
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,911
|
|
||||||
Expiration of warrants
|
|
—
|
|
|
—
|
|
|
2,167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,167
|
|
||||||
Vesting of restricted shares
|
|
547
|
|
|
6
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employee share purchase plan share issuance
|
|
25
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127
|
|
||||||
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
7,852
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,852
|
|
||||||
Equity component of 2023 Notes
|
|
—
|
|
|
—
|
|
|
26,699
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,699
|
|
||||||
Share repurchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,290
|
|
|
(27,637
|
)
|
|
(27,637
|
)
|
||||||
Balance, December 31, 2018
|
|
42,720
|
|
|
427
|
|
|
433,756
|
|
|
(357,989
|
)
|
|
(23,416
|
)
|
|
5,407
|
|
|
(49,998
|
)
|
|
2,780
|
|
||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,226
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,226
|
)
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
610
|
|
|
—
|
|
|
—
|
|
|
610
|
|
||||||
Vesting of restricted shares
|
|
153
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employee share purchase plan share issuance
|
|
54
|
|
|
—
|
|
|
118
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
||||||
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
519
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
519
|
|
||||||
Balance, December 31, 2019
|
|
42,927
|
|
|
$
|
429
|
|
|
$
|
434,391
|
|
|
$
|
(391,215
|
)
|
|
$
|
(22,806
|
)
|
|
5,407
|
|
|
$
|
(49,998
|
)
|
|
$
|
(29,199
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Net (loss) income
|
|
$
|
(33,226
|
)
|
|
$
|
(95,304
|
)
|
|
$
|
68,271
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
2,486
|
|
|
7,430
|
|
|
4,883
|
|
|||
Impairment of intangible asset
|
|
—
|
|
|
66,087
|
|
|
—
|
|
|||
Amortization of premiums on marketable securities
|
|
41
|
|
|
2,823
|
|
|
732
|
|
|||
Remeasurement of related party acquisition-related contingent consideration
|
|
845
|
|
|
(22,731
|
)
|
|
(31,040
|
)
|
|||
Remeasurement of related party financing-related contingent consideration
|
|
378
|
|
|
(1,899
|
)
|
|
(2,071
|
)
|
|||
Amortization of debt discount and debt issuance costs
|
|
5,995
|
|
|
4,830
|
|
|
—
|
|
|||
Changes in deferred tax
|
|
(6,334
|
)
|
|
(19,152
|
)
|
|
3,556
|
|
|||
Share-based compensation expense
|
|
519
|
|
|
7,852
|
|
|
8,072
|
|
|||
Loss on deconsolidation of subsidiary
|
|
1,750
|
|
|
—
|
|
|
—
|
|
|||
Other adjustments
|
|
(295
|
)
|
|
1,365
|
|
|
(968
|
)
|
|||
Net changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
|
2,471
|
|
|
3,452
|
|
|
3,054
|
|
|||
Inventories, net
|
|
1,155
|
|
|
711
|
|
|
(2,899
|
)
|
|||
Prepaid expenses and other current assets
|
|
(1,187
|
)
|
|
3,577
|
|
|
(3,741
|
)
|
|||
Research and development tax credit receivable
|
|
(1,014
|
)
|
|
(2,545
|
)
|
|
(3,141
|
)
|
|||
Accounts payable & other current liabilities
|
|
4,641
|
|
|
(2,032
|
)
|
|
595
|
|
|||
Deferred revenue
|
|
(114
|
)
|
|
(1,892
|
)
|
|
(216
|
)
|
|||
Accrued expenses
|
|
357
|
|
|
(10,640
|
)
|
|
13,187
|
|
|||
Accrued income taxes
|
|
(30
|
)
|
|
(341
|
)
|
|
(786
|
)
|
|||
Earn-out payments for related party contingent consideration in excess of acquisition-date fair value
|
|
(10,988
|
)
|
|
(19,468
|
)
|
|
(31,636
|
)
|
|||
Royalty payments for related party payable in excess of original fair value
|
|
(1,748
|
)
|
|
(2,838
|
)
|
|
(4,429
|
)
|
|||
Other assets and liabilities
|
|
(4,027
|
)
|
|
(2,001
|
)
|
|
(4,761
|
)
|
|||
Net cash (used in) provided by operating activities
|
|
(38,325
|
)
|
|
(82,716
|
)
|
|
16,662
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Purchases of property and equipment
|
|
(29
|
)
|
|
(178
|
)
|
|
(591
|
)
|
|||
Proceeds from disposal of property and equipment
|
|
154
|
|
|
—
|
|
|
—
|
|
|||
Purchase of intangible assets
|
|
—
|
|
|
(20,000
|
)
|
|
(53,111
|
)
|
|||
Proceeds from sales of marketable securities
|
|
63,246
|
|
|
359,507
|
|
|
189,009
|
|
|||
Purchases of marketable securities
|
|
(24,648
|
)
|
|
(376,310
|
)
|
|
(151,005
|
)
|
|||
Net cash provided by (used in) investing activities
|
|
38,723
|
|
|
(36,981
|
)
|
|
(15,698
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from debt issuance
|
|
—
|
|
|
143,750
|
|
|
—
|
|
|||
Payments for debt issuance costs
|
|
—
|
|
|
(6,190
|
)
|
|
—
|
|
|||
Earn-out payments for related party contingent consideration
|
|
—
|
|
|
(645
|
)
|
|
(1,246
|
)
|
|||
Exercise of warrants
|
|
—
|
|
|
2,911
|
|
|
—
|
|
|||
Proceeds from issuance of ordinary shares
|
|
118
|
|
|
577
|
|
|
404
|
|
|||
Share repurchases
|
|
—
|
|
|
(27,637
|
)
|
|
(22,361
|
)
|
|||
Other financing activities, net
|
|
(145
|
)
|
|
(107
|
)
|
|
(115
|
)
|
|||
Net cash (used in) provided by financing activities
|
|
(27
|
)
|
|
112,659
|
|
|
(23,318
|
)
|
|||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
|
78
|
|
|
(201
|
)
|
|
(297
|
)
|
|||
Net change in cash and cash equivalents
|
|
449
|
|
|
(7,239
|
)
|
|
(22,651
|
)
|
|||
Cash and cash equivalents at January 1
|
|
9,325
|
|
|
16,564
|
|
|
39,215
|
|
|||
Cash and cash equivalents at December 31
|
|
$
|
9,774
|
|
|
$
|
9,325
|
|
|
$
|
16,564
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|||
Income tax paid
|
|
$
|
140
|
|
|
$
|
776
|
|
|
$
|
19,143
|
|
Interest paid
|
|
6,469
|
|
|
3,359
|
|
|
1,050
|
|
•
|
Bloxiverz (neostigmine methylsulfate injection) - Bloxiverz was approved by the FDA in May 2013 and was launched in July 2013. Bloxiverz is a drug used intravenously in the operating room to reverse the effects of non-depolarizing neuromuscular blocking agents after surgery. Bloxiverz was the first FDA-approved version of neostigmine methylsulfate. Today, neostigmine is one of the two most frequently used products for the reversal of the effects of other agents used for neuromuscular blocks.
|
•
|
Vazculep (phenylephrine hydrochloride injection) - Vazculep was approved by the FDA in June 2014 and was launched in October 2014. Vazculep is indicated for the treatment of clinically important hypotension occurring in the setting of anesthesia.
|
•
|
Akovaz (ephedrine sulfate injection). Akovaz, was approved by the FDA in April 2016 and was launched in August 2016. Akovaz was the first FDA approved formulation of ephedrine sulfate, 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.
|
Laboratory equipment
|
4-8 years
|
Software, office and computer equipment
|
3 years
|
Leasehold improvements, furniture, fixtures and fittings
|
5-10 years
|
•
|
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 December 31, 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
|
|
$
|
4,404
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,145
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds
|
|
38,799
|
|
|
—
|
|
|
—
|
|
|
52,996
|
|
|
—
|
|
|
—
|
|
||||||
Corporate bonds
|
|
—
|
|
|
4,098
|
|
|
—
|
|
|
—
|
|
|
6,339
|
|
|
—
|
|
||||||
Government securities - U.S.
|
|
—
|
|
|
5,446
|
|
|
—
|
|
|
—
|
|
|
12,701
|
|
|
—
|
|
||||||
Other fixed-income securities
|
|
—
|
|
|
1,637
|
|
|
—
|
|
|
—
|
|
|
9,409
|
|
|
—
|
|
||||||
Total assets
|
|
$
|
43,203
|
|
|
$
|
11,181
|
|
|
$
|
—
|
|
|
$
|
62,141
|
|
|
$
|
28,449
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Related party payable (see Note 12)
|
|
—
|
|
|
—
|
|
|
17,327
|
|
|
—
|
|
|
—
|
|
|
28,840
|
|
||||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,327
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,840
|
|
|
|
2019
|
||||||||||||||
Marketable Securities:
|
|
Adjusted Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
$
|
4,234
|
|
|
$
|
170
|
|
|
$
|
—
|
|
|
$
|
4,404
|
|
Money market funds
|
|
38,028
|
|
|
771
|
|
|
—
|
|
|
38,799
|
|
||||
Corporate bonds
|
|
4,021
|
|
|
77
|
|
|
—
|
|
|
4,098
|
|
||||
Government securities - U.S.
|
|
5,341
|
|
|
110
|
|
|
(5
|
)
|
|
5,446
|
|
||||
Other fixed-income securities
|
|
1,614
|
|
|
23
|
|
|
—
|
|
|
1,637
|
|
||||
Total
|
|
$
|
53,238
|
|
|
$
|
1,151
|
|
|
$
|
(5
|
)
|
|
$
|
54,384
|
|
|
|
2018
|
||||||||||||||
Marketable Securities:
|
|
Adjusted Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
|
$
|
10,101
|
|
|
$
|
—
|
|
|
$
|
(956
|
)
|
|
$
|
9,145
|
|
Money market 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
|
|
$
|
293
|
|
|
$
|
3,464
|
|
|
$
|
341
|
|
|
$
|
—
|
|
|
$
|
4,098
|
|
Government securities - U.S.
|
|
—
|
|
|
4,744
|
|
|
315
|
|
|
387
|
|
|
5,446
|
|
|||||
Other fixed-income securities
|
|
—
|
|
|
1,637
|
|
|
—
|
|
|
—
|
|
|
1,637
|
|
|||||
Total
|
|
$
|
293
|
|
|
$
|
9,845
|
|
|
$
|
656
|
|
|
$
|
387
|
|
|
$
|
11,181
|
|
Inventory:
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Finished goods
|
|
$
|
3,020
|
|
|
$
|
4,270
|
|
Raw materials
|
|
550
|
|
|
500
|
|
||
Total
|
|
$
|
3,570
|
|
|
$
|
4,770
|
|
Property and Equipment, net:
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Laboratory equipment
|
|
$
|
—
|
|
|
$
|
8,864
|
|
Software, office and computer equipment
|
|
1,258
|
|
|
2,487
|
|
||
Furniture, fixtures and fittings
|
|
300
|
|
|
3,715
|
|
||
Less - accumulated depreciation
|
|
(1,014
|
)
|
|
(13,155
|
)
|
||
Total
|
|
$
|
544
|
|
|
$
|
1,911
|
|
|
|
2019
|
|
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
|
|
1,629
|
|
|
(816
|
)
|
|
813
|
|
|
12,061
|
|
|
(10,432
|
)
|
|
—
|
|
|
1,629
|
|
|||||||
Total amortizable intangible assets
|
|
$
|
1,629
|
|
|
$
|
(816
|
)
|
|
$
|
813
|
|
|
$
|
85,172
|
|
|
$
|
(17,456
|
)
|
|
$
|
(66,087
|
)
|
|
$
|
1,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Unamortizable intangible assets - Goodwill
|
|
$
|
18,491
|
|
|
$
|
—
|
|
|
$
|
18,491
|
|
|
$
|
18,491
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,491
|
|
Lease cost:
|
|
2019
|
||
|
|
|
||
Operating lease costs (1)
|
|
$
|
1,515
|
|
Sublease income (2)
|
|
(276
|
)
|
|
Total lease cost
|
|
$
|
1,239
|
|
Maturities:
|
|
Operating Leases
|
||
|
|
|
||
2020
|
|
$
|
779
|
|
2021
|
|
578
|
|
|
2022
|
|
590
|
|
|
2023
|
|
602
|
|
|
2024
|
|
614
|
|
|
Thereafter
|
|
201
|
|
|
Total lease payments
|
|
3,364
|
|
|
Less: interest
|
|
400
|
|
|
Present value of lease liabilities
|
|
$
|
2,964
|
|
Lease Commitment:
|
|
Operating Leases
|
||
|
|
|
||
2020
|
|
$
|
779
|
|
2021
|
|
578
|
|
|
2022
|
|
590
|
|
|
2023
|
|
602
|
|
|
2024
|
|
614
|
|
|
Thereafter
|
|
201
|
|
|
Total minimum lease payments
|
|
$
|
3,364
|
|
|
|
December 31, 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
|
|
(22,064
|
)
|
|
(28,059
|
)
|
||
Net carrying amount of liability component
|
|
121,686
|
|
|
115,691
|
|
||
Other debt
|
|
—
|
|
|
149
|
|
||
Subtotal
|
|
121,686
|
|
|
115,840
|
|
||
Less: current maturities
|
|
—
|
|
|
(106
|
)
|
||
Long-term debt
|
|
$
|
121,686
|
|
|
$
|
115,734
|
|
|
|
|
|
|
||||
Equity component:
|
|
|
|
|
||||
Equity component of exchangeable notes, net of issuance costs
|
|
$
|
(26,699
|
)
|
|
$
|
(26,699
|
)
|
•
|
Prior to the close of business on the business day immediately preceding August 1, 2022, a holder of the 2023 Notes may surrender all or any portion of its 2023 Notes for exchange at any time during the five business day period immediately after any five consecutive trading day period (the “Measurement Period”) in which the trading price per $1 principal amount of 2023 Notes, as determined following a request by a holder of the 2023 Notes, for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the ADSs and the exchange rate on each such trading day.
|
•
|
If a transaction or event that constitutes a fundamental change or a make-whole fundamental change occurs prior to the close of business on the business day immediately preceding August 1, 2022, regardless of whether a holder of the 2023 Notes has the right to require the Company to repurchase the 2023 Notes, or if Avadel is a party to a merger event that
|
•
|
Prior to the close of business on the business day immediately preceding August 1, 2022, a holder of the 2023 Notes may surrender all or any portion of its 2023 Notes for exchange at any time during any calendar quarter commencing after the calendar quarter ending on June 30, 2018 (and only during such calendar quarter), if the last reported sale price of the ADSs for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price on each applicable trading day.
|
•
|
If the Company calls the 2023 Notes for redemption pursuant to Article 16 to the Indenture prior to the close of business on the business day immediately preceding August 1, 2022, then a holder of the 2023 Notes may surrender all or any portion of its 2023 Notes for exchange at any time prior to the close of business on the second business day prior to the redemption date, even if the 2023 Notes are not otherwise exchangeable at such time. After that time, the right to exchange shall expire, unless the Company defaults in the payment of the redemption price, in which case a holder of the 2023 Notes may exchange its 2023 Notes until the redemption price has been paid or duly provided for.
|
|
|
|
|
Activity during the Twelve Months Ended December 31, 2019
|
|
|
||||||||||||||
|
|
|
|
|
|
Changes in Fair Value of
Related Party Payable
|
|
|
||||||||||||
|
|
Balance,
December 31, 2018
|
|
Payments to
Related Parties
|
|
Operating Expense
|
|
Other
Expense
|
|
Balance,
December 31, 2019 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition-related contingent consideration:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earn-out payments - Éclat Pharmaceuticals (a)
|
|
$
|
25,615
|
|
|
$
|
(10,988
|
)
|
|
$
|
845
|
|
|
$
|
—
|
|
|
$
|
15,472
|
|
Financing-related:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Royalty agreement - Deerfield (b)
|
|
2,184
|
|
|
(1,183
|
)
|
|
—
|
|
|
250
|
|
|
1,251
|
|
|||||
Royalty agreement - Broadfin (c)
|
|
1,041
|
|
|
(565
|
)
|
|
—
|
|
|
128
|
|
|
604
|
|
|||||
Total related party payable
|
|
28,840
|
|
|
$
|
(12,736
|
)
|
|
$
|
845
|
|
|
$
|
378
|
|
|
17,327
|
|
||
Less: Current portion
|
|
(9,439
|
)
|
|
|
|
|
|
|
|
|
|
|
(5,554
|
)
|
|||||
Total long-term related party payable
|
|
$
|
19,401
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11,773
|
|
(a)
|
In March 2012, the Company acquired all of the membership interests of Éclat from Breaking Stick Holdings, L.L.C. (“Breaking Stick”, formerly Éclat Holdings), an affiliate of Deerfield. Breaking Stick is majority owned by Deerfield, with a minority interest owned by certain current and former employees. As part of the consideration, the Company committed to provide quarterly earn-out payments equal to 20% of any gross profit generated by certain Éclat products. These payments will continue in perpetuity, to the extent gross profit of the related products also continue in perpetuity.
|
(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 Éclat Pharmaceuticals 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:
|
|
Balance
|
||
|
|
|
||
Balance at December 31, 2016
|
|
$
|
169,347
|
|
Payments of related party payable
|
|
(37,311
|
)
|
|
Fair value adjustments (1)
|
|
(33,111
|
)
|
|
Balance at December 31, 2017
|
|
98,925
|
|
|
Payments of related party payable
|
|
(22,951
|
)
|
|
Fair value adjustments (1)
|
|
(24,630
|
)
|
|
Expiration of warrants
|
|
(2,167
|
)
|
|
Disposition of the pediatrics assets
|
|
(20,337
|
)
|
|
Balance at December 31, 2018
|
|
28,840
|
|
|
Payments of related party payable
|
|
(12,736
|
)
|
|
Fair value adjustments (1)
|
|
1,223
|
|
|
Balance at December 31, 2019
|
|
$
|
17,327
|
|
(Loss) Income Before Income Taxes:
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Ireland
|
|
$
|
(50,134
|
)
|
|
$
|
(42,604
|
)
|
|
$
|
(3,123
|
)
|
U.S.
|
|
10,401
|
|
|
(70,340
|
)
|
|
92,754
|
|
|||
France
|
|
1,151
|
|
|
(253
|
)
|
|
3,029
|
|
|||
Total (loss) income before income taxes
|
|
$
|
(38,582
|
)
|
|
$
|
(113,197
|
)
|
|
$
|
92,660
|
|
Income Tax (Benefit) Provision:
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|
|||
U.S. - Federal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,064
|
|
U.S. - State
|
|
97
|
|
|
330
|
|
|
331
|
|
|||
France
|
|
—
|
|
|
—
|
|
|
265
|
|
|||
Total current
|
|
97
|
|
|
330
|
|
|
18,660
|
|
|||
|
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
|
|
|
|
|||
Ireland
|
|
(1,256
|
)
|
|
—
|
|
|
—
|
|
|||
U.S. - Federal
|
|
(4,093
|
)
|
|
(19,503
|
)
|
|
4,686
|
|
|||
U.S. - State
|
|
(104
|
)
|
|
1,280
|
|
|
1,043
|
|
|||
Total deferred
|
|
(5,453
|
)
|
|
(18,223
|
)
|
|
5,729
|
|
|||
|
|
|
|
|
|
|
||||||
Income tax (benefit) provision
|
|
$
|
(5,356
|
)
|
|
$
|
(17,893
|
)
|
|
$
|
24,389
|
|
Reconciliation to Effective Income Tax Rate:
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Statutory tax rate
|
|
12.5
|
%
|
|
12.5
|
%
|
|
12.5
|
%
|
|||
Differences in international tax rates
|
|
3.2
|
%
|
|
8.0
|
%
|
|
22.2
|
%
|
|||
Nondeductible changes in fair value of contingent consideration
|
|
(0.3
|
)%
|
|
4.0
|
%
|
|
(11.6
|
)%
|
|||
Intercompany asset transfer
|
|
21.2
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Change in valuation allowances
|
|
(19.1
|
)%
|
|
(5.3
|
)%
|
|
(0.7
|
)%
|
|||
Nondeductible stock-based compensation
|
|
(2.7
|
)%
|
|
(1.3
|
)%
|
|
(0.4
|
)%
|
|||
Cross border merger
|
|
—
|
%
|
|
—
|
%
|
|
0.3
|
%
|
|||
Unrealized tax benefits
|
|
0.7
|
%
|
|
(1.3
|
)%
|
|
1.4
|
%
|
|||
State and local taxes (net of federal)
|
|
—
|
%
|
|
(0.3
|
)%
|
|
0.3
|
%
|
|||
Change in U.S. tax law
|
|
—
|
%
|
|
(0.2
|
)%
|
|
3.8
|
%
|
|||
Nondeductible interest expense
|
|
(2.5
|
)%
|
|
(1.1
|
)%
|
|
—
|
%
|
|||
Other
|
|
0.9
|
%
|
|
0.7
|
%
|
|
(1.5
|
)%
|
|||
Effective income tax rate
|
|
13.9
|
%
|
|
15.7
|
%
|
|
26.3
|
%
|
|||
|
|
|
|
|
|
|
||||||
Income tax (benefit) provision - at statutory tax rate
|
|
$
|
(4,823
|
)
|
|
$
|
(14,149
|
)
|
|
$
|
11,582
|
|
Differences in international tax rates
|
|
(1,218
|
)
|
|
(9,039
|
)
|
|
20,557
|
|
|||
Nondeductible changes in fair value of contingent consideration
|
|
121
|
|
|
(4,559
|
)
|
|
(10,779
|
)
|
|||
Intercompany asset transfer
|
|
(8,190
|
)
|
|
—
|
|
|
—
|
|
|||
Change in valuation allowances
|
|
7,379
|
|
|
5,998
|
|
|
(610
|
)
|
|||
Nondeductible stock-based compensation
|
|
1,039
|
|
|
1,499
|
|
|
(375
|
)
|
|||
Cross-border merger
|
|
—
|
|
|
—
|
|
|
265
|
|
|||
Unrecognized tax benefits
|
|
(261
|
)
|
|
1,440
|
|
|
1,296
|
|
|||
State and local taxes (net of federal)
|
|
(7
|
)
|
|
299
|
|
|
252
|
|
|||
Change in U.S. tax law
|
|
—
|
|
|
274
|
|
|
3,513
|
|
|||
Nondeductible interest expense
|
|
982
|
|
|
1,269
|
|
|
—
|
|
|||
Other
|
|
(378
|
)
|
|
(925
|
)
|
|
(1,312
|
)
|
|||
Income tax (benefit) provision - at effective income tax rate
|
|
$
|
(5,356
|
)
|
|
$
|
(17,893
|
)
|
|
$
|
24,389
|
|
Unrecognized Tax Benefit Activity
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Balance at January 1:
|
|
$
|
5,315
|
|
|
$
|
3,954
|
|
|
$
|
1,686
|
|
Additions based on tax positions related to the current year
|
|
—
|
|
|
1,087
|
|
|
2,268
|
|
|||
Increases (decreases) for tax positions of prior years
|
|
2,416
|
|
|
274
|
|
|
—
|
|
|||
Statute of limitations expiration
|
|
(1,266
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at December 31:
|
|
$
|
6,465
|
|
|
$
|
5,315
|
|
|
$
|
3,954
|
|
Net Deferred Tax Assets and Liabilities:
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
|
|
|
||
Net operating loss carryforwards
|
|
$
|
30,275
|
|
|
$
|
19,510
|
|
Amortization
|
|
11,602
|
|
|
6,830
|
|
||
Stock based compensation
|
|
3,577
|
|
|
4,587
|
|
||
Accounts receivable
|
|
53
|
|
|
—
|
|
||
Fair value contingent consideration
|
|
264
|
|
|
384
|
|
||
Restructuring costs (Noctiva)
|
|
—
|
|
|
13,812
|
|
||
Other
|
|
901
|
|
|
479
|
|
||
Gross deferred tax assets
|
|
46,672
|
|
|
45,602
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Amortization
|
|
(172
|
)
|
|
(308
|
)
|
||
Accounts receivable
|
|
—
|
|
|
(661
|
)
|
||
Prepaid expenses
|
|
(35
|
)
|
|
(405
|
)
|
||
Gross deferred tax liabilities
|
|
(207
|
)
|
|
(1,374
|
)
|
||
|
|
|
|
|
||||
Less: valuation allowances
|
|
(17,038
|
)
|
|
(21,199
|
)
|
||
|
|
|
|
|
||||
Net deferred tax assets
|
|
$
|
29,427
|
|
|
$
|
23,029
|
|
Retirement Benefit Obligation Assumptions:
|
|
2018
|
|
2017
|
||
|
|
|
|
|
||
Compensation rate increase
|
|
2.75
|
%
|
|
3.00
|
%
|
Discount rate
|
|
1.50
|
%
|
|
1.25
|
%
|
Employee turn-over
|
|
Actuarial standard and average of the last 5 years
|
||||
Average age of retirement
|
|
60 to 65 years actuarial standard based on age and professional status
|
Retirement Benefit Obligation Activity:
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Retirement indemnity benefit obligation, beginning of year
|
|
$
|
1,024
|
|
|
$
|
1,303
|
|
Service cost
|
|
—
|
|
|
93
|
|
||
Interest cost
|
|
—
|
|
|
17
|
|
||
Plan amendment
|
|
—
|
|
|
—
|
|
||
Benefits paid
|
|
—
|
|
|
(12
|
)
|
||
Curtailment gain
|
|
(1,000
|
)
|
|
(148
|
)
|
||
Actuarial loss
|
|
—
|
|
|
(178
|
)
|
||
Exchange rate changes
|
|
(24
|
)
|
|
(51
|
)
|
||
Retirement indemnity benefit obligation, end of year
|
|
$
|
—
|
|
|
$
|
1,024
|
|
Prepaid Expenses and Other Current Assets:
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
|
|
||
Valued-added tax recoverable
|
|
$
|
1,051
|
|
|
$
|
1,378
|
|
Prepaid and other expenses
|
|
2,116
|
|
|
2,145
|
|
||
Guarantee from Armistice (see Note 17)
|
|
454
|
|
|
534
|
|
||
Income tax receivable
|
|
536
|
|
|
921
|
|
||
Short-term deposit
|
|
—
|
|
|
3,350
|
|
||
Other
|
|
107
|
|
|
225
|
|
||
Total
|
|
$
|
4,264
|
|
|
$
|
8,553
|
|
Other Non-Current Assets:
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Deferred tax assets
|
|
$
|
29,427
|
|
|
$
|
23,029
|
|
Long-term deposits
|
|
1,477
|
|
|
1,477
|
|
||
Guarantee from Armistice (see Note 17)
|
|
1,367
|
|
|
5,697
|
|
||
Right of use assets at contract manufacturing organizations
|
|
6,428
|
|
|
5,894
|
|
||
Other
|
|
575
|
|
|
49
|
|
||
Total
|
|
$
|
39,274
|
|
|
$
|
36,146
|
|
Accrued Expenses:
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
|
|
||
Accrued compensation
|
|
$
|
3,944
|
|
|
$
|
3,971
|
|
Accrued social charges
|
|
592
|
|
|
1,009
|
|
||
Accrued restructuring (see Note 18)
|
|
2,949
|
|
|
879
|
|
||
Customer allowances
|
|
6,470
|
|
|
6,541
|
|
||
Accrued contract research organization charges
|
|
2,098
|
|
|
1,000
|
|
||
Accrued contract manufacturing organization costs
|
|
735
|
|
|
2,028
|
|
||
Accrued contract sales organization and marketing costs
|
|
—
|
|
|
3,469
|
|
||
Other
|
|
3,022
|
|
|
2,798
|
|
||
Total
|
|
$
|
19,810
|
|
|
$
|
21,695
|
|
Other Non-Current Liabilities:
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
|
|||
Provision for retirement indemnity
|
|
$
|
—
|
|
|
$
|
1,024
|
|
Customer allowances
|
|
981
|
|
|
1,352
|
|
||
Unrecognized tax benefits
|
|
6,465
|
|
|
5,315
|
|
||
Guarantee to Deerfield (see Note 17)
|
|
1,372
|
|
|
5,717
|
|
||
Other
|
|
55
|
|
|
594
|
|
||
Total
|
|
$
|
8,873
|
|
|
$
|
14,002
|
|
Purchase Commitments:
|
|
Balance
|
||
|
|
|
||
2020
|
|
$
|
1,434
|
|
2021
|
|
1,430
|
|
|
2022
|
|
1,430
|
|
|
2023
|
|
1,430
|
|
|
2024
|
|
—
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
5,724
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations:
|
|
Total
|
|
Less than
1 Year |
|
1 to 3
Years |
|
3 to 5
Years |
|
More than
5 Years |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt and interest
|
|
$
|
166,391
|
|
|
$
|
6,469
|
|
|
$
|
12,938
|
|
|
$
|
146,984
|
|
|
$
|
—
|
|
Long-term related party payable
(undiscounted) |
|
29,847
|
|
|
5,554
|
|
|
5,181
|
|
|
4,262
|
|
|
14,850
|
|
|||||
Purchase commitments
|
|
5,724
|
|
|
1,434
|
|
|
2,860
|
|
|
1,430
|
|
|
—
|
|
|||||
Operating leases
|
|
3,368
|
|
|
779
|
|
|
1,167
|
|
|
1,216
|
|
|
206
|
|
|||||
Total contractual cash obligations
|
|
$
|
205,330
|
|
|
$
|
14,236
|
|
|
$
|
22,146
|
|
|
$
|
153,892
|
|
|
$
|
15,056
|
|
•
|
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
|
|
4,339
|
|
|
Payments
|
|
(2,441
|
)
|
|
Foreign currency impact
|
|
24
|
|
|
Balance of restructuring accrual at December 31,
|
|
$
|
1,922
|
|
2019 Corporate Restructuring Obligation:
|
|
2019
|
||
|
|
|
||
Balance of restructuring accrual at January 1,
|
|
$
|
—
|
|
Charges for employee severance, benefits and other costs
|
|
3,406
|
|
|
Payments
|
|
(2,326
|
)
|
|
Balance of restructuring accrual at December 31,
|
|
$
|
1,080
|
|
2017 French Restructuring Obligation:
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
Balance of restructuring accrual at January 1,
|
|
$
|
879
|
|
|
$
|
1,000
|
|
Charges for employee severance, benefits and other
|
|
(169
|
)
|
|
1,164
|
|
||
Payments
|
|
(673
|
)
|
|
(1,261
|
)
|
||
Foreign currency impact
|
|
(9
|
)
|
|
(24
|
)
|
||
Balance of restructuring accrual at December 31,
|
|
$
|
28
|
|
|
$
|
879
|
|
Share-based Compensation Expense:
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Research and development
|
|
$
|
429
|
|
|
$
|
880
|
|
|
$
|
672
|
|
Selling, general and administrative
|
|
2,154
|
|
|
6,972
|
|
|
7,400
|
|
|||
Restructuring costs
|
|
(2,064
|
)
|
|
—
|
|
|
—
|
|
|||
Total share-based compensation expense
|
|
$
|
519
|
|
|
$
|
7,852
|
|
|
$
|
8,072
|
|
Stock Option Assumptions:
|
|
2019
|
|
2018
|
|
2017
|
|||
|
|
|
|
|
|
|
|||
Stock option grants:
|
|
|
|
|
|
|
|
|
|
Expected term (years)
|
|
6.25
|
|
|
6.25
|
|
|
6.25
|
|
Expected volatility
|
|
56.48
|
%
|
|
56.59
|
%
|
|
58.82
|
%
|
Risk-free interest rate
|
|
2.52
|
%
|
|
2.68
|
%
|
|
2.20
|
%
|
Expected dividend yield
|
|
—
|
|
|
—
|
|
|
—
|
|
Stock Option Activity and Other Data:
|
|
Number of Stock
Options
|
|
Weighted Average
Exercise Price per Share
|
|
Weighted Average
Remaining
Contractual Life
|
|
Aggregate
Intrinsic Value
|
|||||
|
|
|
|
|
|
|
|
|
|||||
Stock options outstanding, January 1, 2019
|
|
4,601
|
|
|
$
|
11.39
|
|
|
|
|
|
|
|
Granted
|
|
2,631
|
|
|
2.24
|
|
|
|
|
|
|
||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Forfeited
|
|
(1,333
|
)
|
|
7.37
|
|
|
|
|
|
|
||
Expired
|
|
(778
|
)
|
|
12.91
|
|
|
|
|
|
|||
Stock options outstanding, December 31, 2019
|
|
5,121
|
|
|
$
|
7.51
|
|
|
7.43 years
|
|
$
|
12,119
|
|
Stock options exercisable, December 31, 2019
|
|
2,636
|
|
|
$
|
11.63
|
|
|
5.73 years
|
|
$
|
572
|
|
Warrant Activity and Other Data:
|
|
Number of
Warrants
|
|
Weighted Average Exercise Price per Share
|
|
Weighted Average Remaining
Contractual Life
|
|
Aggregate Intrinsic
Value
|
|||||
|
|
|
|
|
|
|
|
|
|||||
Warrants outstanding, January 1, 2019
|
|
596
|
|
|
$
|
17.72
|
|
|
|
|
|
|
|
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Forfeited
|
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Expired
|
|
(305
|
)
|
|
21.67
|
|
|
|
|
|
|||
Warrants outstanding, December 31, 2019
|
|
291
|
|
|
$
|
13.59
|
|
|
0.61 years
|
|
$
|
—
|
|
Warrants exercisable, December 31, 2019
|
|
291
|
|
|
$
|
13.59
|
|
|
0.61 years
|
|
$
|
—
|
|
Restricted Share Activity and Other Data:
|
|
Number of Restricted Share Awards
|
|
Weighted Average Grant Date
Fair Value
|
|||
|
|
|
|
|
|||
Non-vested restricted share awards outstanding, January 1, 2019
|
|
491
|
|
|
$
|
7.20
|
|
Granted
|
|
251
|
|
|
2.47
|
|
|
Vested
|
|
(153
|
)
|
|
7.50
|
|
|
Forfeited
|
|
(242
|
)
|
|
5.65
|
|
|
Non-vested restricted share awards outstanding, December 31, 2019
|
|
347
|
|
|
$
|
4.73
|
|
Net (Loss) Income Per Share:
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Net (loss) income
|
|
$
|
(33,226
|
)
|
|
$
|
(95,304
|
)
|
|
$
|
68,271
|
|
|
|
|
|
|
|
|
||||||
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|||
Basic shares
|
|
37,403
|
|
|
37,325
|
|
|
40,465
|
|
|||
Effect of dilutive securities—employee and director equity awards outstanding and 2023 Notes
|
|
—
|
|
|
—
|
|
|
1,300
|
|
|||
Diluted shares
|
|
37,403
|
|
|
37,325
|
|
|
41,765
|
|
|||
|
|
|
|
|
|
|
||||||
Net (loss) income per share - basic
|
|
$
|
(0.89
|
)
|
|
$
|
(2.55
|
)
|
|
$
|
1.69
|
|
Net (loss) income per share - diluted
|
|
$
|
(0.89
|
)
|
|
$
|
(2.55
|
)
|
|
$
|
1.63
|
|
Accumulated Other Comprehensive (Loss) Income:
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment:
|
|
|
|
|
|
|
|
|
||||
Beginning balance
|
|
$
|
(23,621
|
)
|
|
$
|
(23,202
|
)
|
|
$
|
(23,336
|
)
|
Net other comprehensive (loss) income
|
|
(117
|
)
|
|
(419
|
)
|
|
134
|
|
|||
Balance at December 31,
|
|
(23,738
|
)
|
|
(23,621
|
)
|
|
(23,202
|
)
|
|||
|
|
|
|
|
|
|
||||||
Unrealized gain (loss) on marketable securities, net
|
|
|
|
|
|
|
|
|
||||
Beginning balance
|
|
205
|
|
|
(64
|
)
|
|
(229
|
)
|
|||
Net other comprehensive income, net of ($43), ($18), $28, tax, respectively
|
|
727
|
|
|
269
|
|
|
165
|
|
|||
Balance at December 31,
|
|
932
|
|
|
205
|
|
|
(64
|
)
|
|||
Accumulated other comprehensive loss at December 31,
|
|
$
|
(22,806
|
)
|
|
$
|
(23,416
|
)
|
|
$
|
(23,266
|
)
|
Revenue by Product:
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Bloxiverz
|
|
$
|
7,479
|
|
|
$
|
20,850
|
|
|
$
|
45,596
|
|
Vazculep
|
|
33,152
|
|
|
42,916
|
|
|
38,187
|
|
|||
Akovaz
|
|
18,642
|
|
|
33,759
|
|
|
80,617
|
|
|||
Other
|
|
(58
|
)
|
|
3,898
|
|
|
8,441
|
|
|||
Product sales
|
|
59,215
|
|
|
101,423
|
|
|
172,841
|
|
|||
License revenue
|
|
—
|
|
|
1,846
|
|
|
404
|
|
|||
Total revenues
|
|
$
|
59,215
|
|
|
$
|
103,269
|
|
|
$
|
173,245
|
|
Revenue by Significant Customer:
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Cardinal Health
|
|
$
|
15,088
|
|
|
$
|
25,413
|
|
|
$
|
37,965
|
|
McKesson Corporation
|
|
14,900
|
|
|
26,794
|
|
|
44,762
|
|
|||
AmerisourceBergen
|
|
12,059
|
|
|
18,620
|
|
|
25,691
|
|
|||
Others
|
|
17,168
|
|
|
30,596
|
|
|
64,423
|
|
|||
Product sales
|
|
59,215
|
|
|
101,423
|
|
|
172,841
|
|
|||
License revenue
|
|
—
|
|
|
1,846
|
|
|
404
|
|
|||
Total revenues
|
|
$
|
59,215
|
|
|
$
|
103,269
|
|
|
$
|
173,245
|
|
Revenue by Geographic Region:
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
U.S.
|
|
$
|
59,215
|
|
|
$
|
101,423
|
|
|
$
|
172,841
|
|
Ireland
|
|
—
|
|
|
1,846
|
|
|
404
|
|
|||
Total revenues
|
|
$
|
59,215
|
|
|
$
|
103,269
|
|
|
$
|
173,245
|
|
Long-lived Assets by Geographic Region:
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
U.S.
|
|
$
|
22,254
|
|
|
$
|
27,761
|
|
|
$
|
116,536
|
|
France
|
|
196
|
|
|
1,365
|
|
|
2,257
|
|
|||
Ireland
|
|
7,244
|
|
|
6,028
|
|
|
1,360
|
|
|||
Total
|
|
$
|
29,694
|
|
|
$
|
35,154
|
|
|
$
|
120,153
|
|
(a)
|
up to $250,000 in aggregate of ordinary shares, nominal value US$0.01 per share (the “Ordinary Shares”), each of which may be represented by ADSs, preferred shares, nominal value US$0.01 per share (the “Preferred Shares”), debt securities (the “Debt Securities”), warrants to purchase Ordinary Shares, ADSs, Preferred Shares and/or Debt Securities (the “Warrants”), and/or units consisting of Ordinary Shares, ADSs, Preferred Shares, one or more Debt Securities or Warrants in one or more series, in any combination, pursuant to the terms of the 2020 Shelf Registration Statement, the base prospectus contained in the 2020 Shelf Registration Statement (the “Base Prospectus”), and any amendments or supplements thereto (together, the “Securities”); including
|
(b)
|
up to $50,000 of ADSs that may be issued and sold from time to time pursuant to the terms of an Open Market Sale AgreementSM (“the Sales Agreement”), entered into with Jefferies LLC on February 4, 2020 (the “Sales Agreement”), the 2020 Shelf Registration Statement, the Base Prospectus and the terms of the sales agreement prospectus contained in the 2020 Shelf Registration Statement.
|
(a)
|
Documents filed as part of this report:
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedules
|
Deferred Tax Asset Valuation Allowance:
|
|
Balance,
Beginning of Period
|
|
Additions
(a)
|
|
Deductions
(b)
|
|
Other Changes
(c)
|
|
Balance,
End of Period
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
|
$
|
21,199
|
|
|
$
|
6,496
|
|
|
$
|
(4,762
|
)
|
|
$
|
(5,896
|
)
|
|
$
|
17,037
|
|
2018
|
|
$
|
15,354
|
|
|
$
|
6,089
|
|
|
$
|
(75
|
)
|
|
$
|
(169
|
)
|
|
$
|
21,199
|
|
2017
|
|
$
|
7,599
|
|
|
$
|
391
|
|
|
$
|
(664
|
)
|
|
$
|
8,028
|
|
|
$
|
15,354
|
|
a.
|
Additions to the deferred tax asset valuation allowance relate to movements on certain French, Irish and U.S. deferred tax assets where we continue to maintain a valuation allowance until sufficient positive evidence exists to support reversal.
|
b.
|
Deductions to the deferred tax asset valuation allowance include movements relating to utilization of net operating losses and tax credit carryforwards, release in valuation allowance and other movements including adjustments following finalization of tax returns.
|
c.
|
Other changes to the deferred tax asset valuation allowance including currency translation adjustments recorded directly in equity, account method changes and the impact of corporate restructuring.
|
Exhibit Number
|
|
Exhibit Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
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‡
|
|
|
|
|
|
10.28*
|
|
|
|
|
|
10.29*
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32*
|
|
|
|
|
|
10.33*
|
|
|
|
|
|
10.34*
|
|
|
|
|
|
10.35*
|
|
|
|
|
|
10.36
|
|
|
|
|
|
10.37‡
|
|
|
|
|
|
10.38
|
|
|
|
|
|
10.39#
|
|
|
|
|
|
10.40
|
|
|
|
|
|
14.1
|
|
|
|
|
|
14.2
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instant 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
|
|
|
Avadel Pharmaceuticals plc
|
|
|
|
Dated: March 16, 2020
|
By:
|
/s/ Gregory J. Divis
|
|
|
Name: Gregory J. Divis
|
|
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Title: Chief Executive Officer
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Signature
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Title
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Date
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/s/ Gregory J. Divis
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Director, Chief Executive Officer and Principal Executive Officer
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March 16, 2020
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Gregory J. Divis
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/s/ Thomas S. McHugh
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Chief Financial Officer and Principal Financial and Accounting Officer
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March 16, 2020
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Thomas S. McHugh
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/s/ Geoffrey M. Glass
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Non-Executive Chairman of the Board and Director
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March 16, 2020
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Geoffrey M. Glass
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/s/ Dr. Eric J. Ende
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Director
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March 16, 2020
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Dr. Eric J. Ende
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/s/ Mark A. McCamish, MD, Ph.D.
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Director
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March 16, 2020
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Mark A. McCamish, MD, Ph.D.
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/s/ Linda S. Palczuk
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Director
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March 16, 2020
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Linda S. Palczuk
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/s/ Peter Thornton
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Director
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March 16, 2020
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Peter Thornton
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our Board of Directors approved the transaction which resulted in the shareholder becoming an interested shareholder;
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upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the shareholder owned at least 85% of the voting shares outstanding at the time of commencement of such transaction, excluding for purposes of determining the number of voting shares outstanding (but not the outstanding voting shares owned by the interested shareholder), voting shares owned by persons who are directors and also officers and by certain employee share plans; or
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the business combination is approved by our Board of Directors and authorized at an annual or extraordinary general meeting of shareholders by the affirmative vote of the holders of at least 75% of the outstanding voting shares that are not owned by the interested shareholder.
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in the event of an offer, all holders of securities of the target company must be afforded equivalent treatment and, if a person acquires control of a company, the other holders of securities must be protected;
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the holders of securities in the target company must have sufficient time and information to enable them to reach a properly informed decision on the offer; where it advises the holders of securities, the Board of Directors of the target company must give its views on the effects of the implementation of the offer on employment, employment conditions and the locations of the target company’s place of business;
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a target company’s Board of Directors must act in the interests of that company as a whole and must not deny the holders of securities the opportunity to decide on the merits of the offer;
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false markets must not be created in the securities of the target company, the bidder or any other company concerned by the offer in such a way that the rise or fall of the prices of the securities becomes artificial and the normal functioning of the markets is distorted;
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a bidder can only announce an offer after ensuring that he or she can fulfill in full the consideration offered, if such is offered, and after taking all reasonable measures to secure the implementation of any other type of consideration;
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a target company may not be hindered in the conduct of its affairs longer than is reasonable by an offer for its securities; and
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a “substantial acquisition” of securities, whether such acquisition is to be effected by one transaction or a series of transactions, shall take place only at an acceptable speed and shall be subject to adequate and timely disclosure.
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any transfer of those shares or, in the case of unissued shares, any transfer of the right to be issued with shares and any issue of shares, shall be void;
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no voting rights shall be exercisable in respect of those shares;
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no further shares shall be issued in right of those shares or in pursuance of any offer made to the holder of those shares; and
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no payment shall be made of any sums due from us on those shares, whether in respect of capital or otherwise.
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Ireland
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Delaware
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Number of Directors
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The Irish Companies Act provides for a minimum of two directors. The Avadel Constitution provides for a minimum of two directors and a maximum of 13. Our shareholders may from time to time increase or reduce the maximum number, or increase the minimum number, of directors by ordinary resolution. Our Board of Directors determines the number of directors within the range of two to 13.
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Under Delaware law, a corporation must have at least one director and the number of directors shall be fixed by or in the manner provided in the bylaws.
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Removal of Directors
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Under the Irish Companies Act, the shareholders may, by ordinary
resolution, remove a director from office before the expiration of his or her term, at a meeting held no less than 28 days’ notice and at which the director is entitled to be heard. Because of this provision of
the Irish Companies Act, a director may be so removed before the expiration of his or her period of office.
The power of removal is without prejudice to any claim for damages for breach of contract (e.g., employment contract) that the director may have against the Company in respect of his or her removal.
The Avadel Constitution also provides that the office of a director will also be vacated if the director is restricted or disqualified to act as a director under the Irish Companies Act; resigns his or her office by notice in writing to us or in writing offers to resign and the directors resolve to accept such offer; or is requested to resign in writing by not less than 75% of the other directors.
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Under Delaware law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except (i) unless the certificate of incorporation provides otherwise, in the case of a corporation whose board of directors is classified, stockholders may effect such removal only for cause, or (ii) in the case of a corporation having cumulative voting, if less than the entire board of directors is to be removed, no director may be removed without cause if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which he is a part.
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Vacancies on the Board of Directors
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Any vacancy on our Board of Directors, including a vacancy resulting from an increase in the number of directors or from the death, resignation, retirement, disqualification or removal of a director, shall be deemed a casual vacancy. Subject to the terms of any one or more classes or series of preferred shares, any casual vacancy shall only be filled by the decision of a majority of our Board of Directors then in office, provided that a quorum is present and provided that the appointment does not cause the number of directors to exceed any number fixed by or in accordance with the Avadel Constitution as the maximum number of directors.
Any director of a class of directors elected to fill a vacancy resulting from an increase in the number of directors of such class shall hold office for the remaining term of that class. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. A director retiring at a meeting shall retain office until the close or adjournment of the meeting.
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Under Delaware law, vacancies and newly created directorships may be filled by a majority of the directors then in office (even though less than a quorum) or by a sole remaining director unless (i) otherwise provided in the certificate of incorporation or bylaws of the corporation or (ii) the certificate of incorporation directs that a particular class of stock is to elect such director, in which case a majority of the other directors elected by such class, or a sole remaining director elected by such class, will fill such vacancy.
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Annual General Meeting
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We are required to hold annual general meetings at intervals of no more than fifteen months after the previous annual general meeting, provided that an annual general meeting is held in each calendar year following our first annual general meeting, no more than nine months after our fiscal year-end.
The only matters which must, as a matter of Irish company law, be transacted at an annual general meeting are the consideration of the Irish statutory financial statements, the report of the directors, the report of the auditors on those statements and that report and a review by the members of our affairs. If no resolution is made in respect of the reappointment of an auditor at an annual general meeting, the previous auditor will be deemed to have continued in office.
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Under Delaware law, the annual meeting of stockholders shall be held at such place, on such date and at such time as may be designated from time to time by the board of directors or as provided in the certificate of incorporation or by the bylaws.
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General Meeting
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Our extraordinary general meetings may be convened by (i) our Board of Directors, (ii) on requisition of shareholders holding not less than 10% of our paid up share capital carrying voting rights or (iii) on requisition of our auditors. Extraordinary general meetings are generally held for the purposes of approving shareholder resolutions as may be required from time to time.
If our directors become aware that our net assets are half or less of the amount of our called-up share capital, our directors must convene an extraordinary general meeting of our shareholders not later than 28 days from the date that they learn of this fact. This meeting must be convened for the purposes of considering whether any, and if so what, measures should be taken to address the situation.
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Under Delaware law, special meetings of the stockholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.
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Notice of General Meetings
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Notice of a general meeting must be given to all our shareholders and to our auditors. The Avadel Constitution provides that the maximum notice period is 60 days. The minimum notice periods are 21 days’ notice in writing for an annual general meeting or an extraordinary general meeting to approve a special resolution and 14 days’ notice in writing for any other extraordinary general meeting. General meetings may be called by shorter notice, but only with the consent of our auditors and all of our shareholders entitled to attend and vote thereat. Because of the 21-day and 14-day requirements described in this paragraph, the Avadel Constitution includes provisions reflecting these requirements of Irish law.
In the case of an extraordinary general meeting convened by our shareholders, the proposed purpose of the meeting must be set out in the requisition notice. Upon receipt of this requisition notice, our Board of Directors has 21 days to convene a meeting of our shareholders to vote on the matters set out in the requisition notice. This meeting must be held within two months of the receipt of the requisition notice. If our Board of Directors does not convene the meeting within such 21-day period, the requisitioning shareholders, or any of them representing more than one half of the total voting rights of all of them, may themselves convene a meeting, which meeting must be held within three months of the receipt of the requisition notice.
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Under Delaware law, unless otherwise provided in the certificate of incorporation or bylaws, written notice of any meeting of the stockholders must be given to each stockholder entitled to vote at the meeting not less than ten nor more than 60 days before the date of the meeting and shall specify the place, date, hour and purpose or purposes of the meeting.
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Quorum
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The presence, in person or by proxy, of five or more persons holding or representing by proxy at least a majority in nominal value of the class or, at any adjourned meeting of such holders, one holder holding or representing by proxy at least a majority in nominal value of the issued shares of the class constitutes a quorum for the conduct of business. No business may take place at a general meeting if a quorum is not present in person or by proxy. Our Board of Directors has no authority to waive quorum requirements stipulated in the Avadel Constitution. Abstentions and broker non-votes will be counted as present for purposes of determining whether there is a quorum in respect of the proposals.
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The certificate of incorporation or bylaws may specify the number of shares, the holders of which shall be present or represented by proxy at any meeting in order to constitute a quorum, but in no event shall a quorum consist of less than one third of the shares entitled to vote at the meeting. In the absence of such specification in the certificate of incorporation or bylaws, a majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at a meeting of stockholders.
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Proxy
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Under Irish law, a shareholder may designate another person to attend, speak and vote at a general meeting of the company on their behalf by proxy, which proxy need not be a shareholder.
Where interests in shares are held by a nominee trust company, this company may exercise the rights of the beneficial holders on their behalf as their proxy.
Voting rights may be exercised by shareholders registered in the share register as of the record date for the meeting or by a duly appointed proxy of such a registered shareholder, which proxy need not be a shareholder. Where interests in shares are held by a nominee trust company, this company may exercise the rights of the beneficial holders on their behalf as their proxy. All proxies must be appointed in accordance with the Avadel Constitution. The Avadel Constitution permits the appointment of proxies by our shareholders to be notified to us electronically, when permitted by our directors.
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Under Delaware law, at any meeting of stockholders, a stockholder may designate another person to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A director of a Delaware corporation may not issue a proxy representing the director's voting rights as a director.
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Issue of New Shares
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Under the Avadel Constitution, we may issue shares subject to the maximum authorized share capital contained in the Avadel Constitution. The authorized share capital may be increased or reduced by a resolution approved by a simple majority of the votes cast at a general meeting of our shareholders, referred to under Irish law as an “ordinary resolution.” As a matter of Irish law, the directors of a company may issue new ordinary or preferred shares without shareholder approval once authorized to do so by its constitution or by an ordinary resolution adopted by our shareholders at a general meeting. The authorization may be granted for a maximum period of five years, at which point it may be renewed by shareholders by an ordinary resolution. Accordingly, the Avadel Constitution authorizes our Board of Directors to issue new ordinary or preferred shares without shareholder approval for a period of five years from the date of the adoption of the Avadel Constitution. The authority to issue preferred shares provides us with the flexibility to consider and respond to future business needs and opportunities as they arise from time to time, including in connection with capital raising, financing and acquisition transactions or opportunities.
Under the Avadel Constitution, our Board of Directors will be authorized to issue preferred shares on a non-pre-emptive basis, with discretion as to the terms attaching to the preferred shares, including as to voting, dividend and conversion rights and priority relative to other classes of shares with respect to dividends and upon a liquidation. As described in the preceding paragraph, this authority extends until five years from the date of the adoption of the Avadel Constitution, at which time it will expire unless renewed by our shareholders.
Notwithstanding this authority, under the Irish Takeover Rules our Board of Directors would not be permitted to issue any of our shares, including preferred shares, during a period when an offer has been made for us or is believed to be imminent unless the issue is (i) approved by our shareholders at a general meeting; (ii) consented to by the Irish Takeover Panel on the basis it would not constitute action frustrating the offer;
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Under Delaware law, if the company's certificate of incorporation so provides, the directors have the power to authorize the issuance of additional stock. The directors may authorize capital stock to be issued for consideration consisting of cash, any tangible or intangible property or any benefit to the company or any combination thereof.
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(iii) consented to by the Irish Takeover Panel and approved by the holders of more than 50% of our shares carrying voting rights; (iv) consented to by the Irish Takeover Panel in circumstances where a contract for the issue of the shares had been entered into prior to that period; or (v) consented to by the Irish Takeover Panel in circumstances where the issue of the shares was decided by our directors prior to that period and either action has been taken to implement the issuance (whether in part or in full) prior to such period or the issuance was otherwise in the ordinary course of business.
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Preemptive Rights
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Under Irish law, unless otherwise authorized, when an Irish public limited company issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing shareholders of the company on a pro rata basis, commonly referred to as the statutory preemption right. However, we have opted out of these preemption rights in the Avadel Constitution as permitted under Irish law. Because Irish law permits this opt-out to last for a maximum of five years, the Avadel Constitution provides that this opt-out will lapse five years after the adoption of the Avadel Constitution. Such opt-out may be renewed by a special resolution of the shareholders. A special resolution requires not less than 75% of the votes cast at a general meeting of our shareholders. If the opt-out is not renewed, shares issued for cash must be offered to pre-existing shareholders of Avadel plc pro rata to their existing shareholding before the shares can be issued to any new shareholders. The statutory preemption rights do not apply where shares are issued for non-cash consideration and do not apply to the issue of non-equity shares (that is, shares that have the right to participate only up to a specified amount in any income or capital distribution).
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Under Delaware law, shareholders have no preemptive rights to subscribe to additional issues of stock or to any security convertible into such stock unless, and except to the extent that, such rights are expressly provided for in the certificate of incorporation.
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Authority to Allot
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Under the Avadel Constitution, we may issue shares subject to the maximum authorized share capital contained in the Avadel Constitution. The authorized share capital may be increased or reduced by a resolution approved by a simple majority of the votes cast at a general meeting of our shareholders, referred to under Irish law as an “ordinary resolution.” Our authorized share capital may be divided into shares of such nominal value as the resolution shall prescribe. As a matter of Irish law, the directors of a company may issue new ordinary or preferred shares without shareholder approval once authorized to do so by its constitution or by an ordinary resolution adopted by our shareholders at a general meeting. The authorization may be granted for a maximum period of five years, at which point it may be renewed by shareholders by an ordinary resolution. Accordingly, the Avadel Constitution authorizes our Board of Directors to issue new ordinary or preferred shares without shareholder approval for a period of five years from the date of the adoption of the Avadel Constitution. The authority to issue preferred shares provides us with the flexibility to consider and respond to future business needs and opportunities as they arise from time to time, including in connection with capital raising, financing and acquisition transactions or opportunities.
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Under Delaware law, if the corporation's charter or certificate of incorporation so provides, the board of directors has the power to authorize the issuance of stock. The board may authorize capital stock to be issued for consideration consisting of cash, any tangible or intangible property or any benefit to the corporation or any combination thereof. It may determine the amount of such consideration by approving a formula. In the absence of actual fraud in the transaction, the judgment of the directors as to the value of such consideration is conclusive.
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Liability of Directors and Officers
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To the fullest extent permitted by Irish law, the Avadel Constitution contains indemnification for the benefit of our directors, company secretary and executive officers. However, as to our directors and company secretary, this indemnity is limited by the Irish Companies Act, which prescribes that an advance commitment to indemnify only permits a company to pay the costs or discharge the liability of a director or company secretary where judgment is given in favor of the director or company secretary in any civil or criminal action in respect of such costs or liability, or where an Irish court grants relief because the director or company secretary acted honestly and reasonably and ought fairly to be excused. Any provision whereby an Irish company seeks to commit in advance to indemnify its directors or company secretary over and above the limitations imposed by the Irish Companies Act will be void, whether contained in its articles of association or any contract between the company and the director or company secretary. This restriction does not apply to our executive officers who are not directors, our company secretary or other persons who would be considered “officers” within the meaning of the Irish Companies Act.
We are permitted under the Avadel Constitution and the Irish Companies Act to take out directors' and officers’ liability insurance, as well as other types of insurance, for our directors, officers, employees and agents. In order to attract and retain qualified directors and officers, we expect to purchase and maintain customary directors' and officers’ liability insurance and other types of comparable insurance.
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Under Delaware law, a corporation's certificate of incorporation may include a provision eliminating or limiting the personal liability of a director to the corporation and its stockholders for damages arising from a breach of fiduciary duty as a director. However, no provision can limit the liability of a director for:
any breach of the director's duty of loyalty to the corporation or its stockholders;
acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
intentional or negligent payment of unlawful dividends or stock purchases or redemptions; or
any transaction from which the director derives an improper personal benefit.
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Voting Rights
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Under the Avadel Constitution, each holder of our ordinary shares is entitled to one vote for each ordinary share that he or she holds as of the record date for the meeting. The holder of our deferred ordinary shares is not entitled to a vote. We may not exercise any voting rights in respect of any shares held as treasury shares. Any shares held by our subsidiaries will count as treasury shares for this purpose, and such subsidiaries cannot therefore exercise any voting rights in respect of those shares.
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Delaware law provides that, unless otherwise provided in the certificate of incorporation, each stockholder is entitled to one vote for each share of capital stock held by such stockholder.
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Standard of Conduct for Directors
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The directors of the Company have certain statutory and fiduciary duties as a matter of Irish law. All of the directors have equal and overall responsibility for the management of the Company (although directors who also serve as employees may have additional responsibilities and duties arising under their employment agreements (if applicable), and it is likely that more will be expected of them in compliance with their duties than non-executive directors). The Irish Companies Act provides specifically for certain fiduciary duties of the directors of Irish companies, including duties:
to act in good faith and in the best interests of the company;
to act honestly and responsibly in relation to the company’s affairs;
to act in accordance with the company’s constitution and to exercise powers only for lawful purposes;
not to misuse the company’s property, information and/or opportunity;
not to fetter their independent judgment;
to avoid conflicts of interest;
to exercise care, skill and diligence; and
to have regard for the interests of the company’s shareholders.
Other statutory duties of directors include ensuring the maintenance of proper books of account, having annual accounts prepared, having an annual audit performed, maintaining certain registers, making certain filings and disclosing personal interests. Directors of public limited companies such as Avadel will have a specific duty to ensure that the company secretary is a person with the requisite knowledge and experience to discharge the role. Directors may rely on information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by
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Delaware law does not contain specific provisions setting forth the standard of conduct of a director. The scope of the fiduciary duties of directors is generally determined by the courts of the State of Delaware. In general, directors have a duty to act without self-interest, on a well-informed basis and in a manner they reasonably believe to be in the best interest of the stockholders.
Directors of a Delaware corporation owe fiduciary duties of care and loyalty to the corporation and to its shareholders. The duty of care generally requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. In general, but subject to certain exceptions, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Delaware courts have also imposed a heightened standard of conduct upon directors of a Delaware corporation who take any action designed to defeat a threatened change in control of the corporation.
In addition, under Delaware law, when the board of directors of a Delaware corporation approves the sale or break-up of a corporation, the board of directors may, in certain circumstances, have a duty to obtain the highest value reasonably available to the shareholders.
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(1) other directors, officers or employees of the company whom the director reasonably believes to be reliable and competent in the matters prepared or presented, (2) legal counsel, public accountants or other persons as to matters the director reasonably believes to be within their professional or expert competence, or (3) a committee of the board of which the director does not serve as to matters within its designated authority, which committee the director reasonably believed to merit confidence.
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Shareholder Suits
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In Ireland, the decision to institute proceedings is generally taken by a company’s board of directors,
who will usually be empowered to manage the company’s business. In certain limited circumstances, a shareholder may be entitled to
bring a derivative action on behalf of the company.
The central question at issue in deciding whether a minority shareholder may be permitted to bring a derivative action is whether, unless the action is
brought, a wrong committed against the company would otherwise go un-redressed.
The principal case law in Ireland indicates that to bring a derivative action a person must first establish a prima facie case (i) that the company is entitled to the relief claimed and (ii) that the action
falls within one of the five exceptions derived from case law, as follows:
(1) where an ultra vires or illegal act is perpetrated;
(2) where more than a bare majority is required to ratify the “wrong” complained of;
(3) where the shareholders’ personal rights are infringed;
(4) where a fraud has been perpetrated upon a minority by those in control; or
(5) where the justice of the case requires a minority to be permitted to institute proceedings.
Shareholders may also bring proceedings against the company where the affairs of the company are being conducted, or the powers of the directors are being exercised, in a manner oppressive to the
shareholders or in disregard of their interests. Oppression connotes conduct that is burdensome, harsh or wrong.
Conduct must relate to the internal
management of the company. This is an Irish statutory remedy and the court can grant any order it sees fit, usually providing for the purchase or transfer of the shares of any shareholder.
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Under Delaware law, a stockholder may initiate a derivative action to enforce a right of a corporation if the corporation fails to enforce the right itself. The complaint must:
state that the plaintiff was a stockholder at the time of the transaction of which the plaintiff complains or that the plaintiffs shares thereafter devolved on the plaintiff by operation of law; and
allege with particularity the efforts made by the plaintiff to obtain the action the plaintiff desires from the directors and the reasons for the plaintiff's failure to obtain the action; or
state the reasons for not making the effort.
Additionally, the plaintiff must remain a stockholder through the duration of the derivative suit. The action will not be dismissed or compromised without the approval of the Delaware Court of Chancery.
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we do not wish to receive a discretionary proxy;
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there is substantial shareholder opposition to the particular question; or
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the particular question would have an adverse impact on our shareholders.
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Persons depositing or withdrawing shares or ADS holders must pay:
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$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
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Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
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$.05 (or less) per ADS
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Any cash distribution to ADS holders
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A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs
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Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders
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$.05 (or less) per ADS per calendar year
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Depositary services
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Registration or transfer fees
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Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares
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Expenses of the depositary
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Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement)
converting foreign currency to U.S. dollars
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Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes
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As necessary
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Any charges incurred by the depositary or its agents for servicing the deposited securities
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As necessary
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60 days have passed since the depositary told us it wants to resign but a successor depositary has not been appointed and accepted its appointment;
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we delist the ADSs from an exchange on which they were listed and do not list the ADSs on another exchange;
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we appear to be insolvent or enter insolvency proceedings
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all or substantially all the value of the deposited securities has been distributed either in cash or in the form of securities;
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there are no deposited securities underlying the ADSs or the underlying deposited securities have become apparently worthless; or
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there has been a replacement of deposited securities.
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are only obligated to take the actions specifically set forth in the deposit agreement without negligence or bad faith;
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are not liable if we are or it is prevented or delayed by law or circumstances beyond our or its control from performing our or its obligations under the deposit agreement;
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are not liable if we or it exercises discretion permitted under the deposit agreement;
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are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the deposit agreement, or for any special, consequential or punitive damages for any breach of the terms of the deposit agreement;
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have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the deposit agreement on the ADS holder’s behalf or on behalf of any other person;
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the depositary has no duty to make any determination or provide any information as to our tax status, or any liability for any tax consequences that may be incurred by ADS holders as a result of owning or holding ADSs;
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are not liable for the acts or omissions of any securities depository, clearing agency or settlement system; and
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may rely upon any documents we believe or it believes in good faith to be genuine and to have been signed or presented by the proper person.
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payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any shares or other deposited securities;
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satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and
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compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.
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when temporary delays arise because: (i) the depositary has closed its transfer books or we have closed our transfer books; (ii) the transfer of shares is blocked to permit voting at a shareholders' meeting; or (iii) we are paying a dividend on our shares;
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when the ADS holder owes money to pay fees, taxes and similar charges; or
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when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of shares or other deposited securities.
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
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an exchange distribution in accordance with the rules of the applicable exchange;
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privately negotiated transactions;
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settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;
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broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
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through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise;
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a combination of any such methods of sale; and
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•
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any other method permitted pursuant to applicable law.
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1.
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Name.
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Telephone:
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Fax:
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Contact Person:
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E-mail address of Contact Person:________________________________________________
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Note:
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If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
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Name
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Jurisdiction
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Avadel Pharmaceuticals plc (the Registrant):
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Ireland
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1) Avadel US Holdings, Inc. (f/k/a Flamel US Holdings, Inc.)
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United States (Delaware)
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A. FSC Holding Company, LLC
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United States (Delaware)
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i. Avadel Pharmaceuticals (USA), Inc. (f/k/a FSC Laboratories, Inc.)
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United States (Delaware)
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1. Avadel Pediatrics, Inc. (f/k/a FSC Pediatrics, Inc.)
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United States (Delaware)
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ii. FSC Therapeutics, LLC
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United States (Delaware)
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B. Avadel Legacy Pharmaceuticals, LLC (f/k/a Éclat Pharmaceuticals LLC)
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United States (Delaware)
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i. Avadel Generics, LLC (f/k/a Talec Pharma, Inc.)
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United States (Delaware)
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C. Avadel Management Corporation
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United States (Delaware)
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D. Avadel Operations Company, Inc.
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United States (Delaware)
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E. Avadel Specialty Pharmaceuticals
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United States (Delaware)
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F. Avadel CNS Pharmaceuticals, LLC
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United States (Delaware)
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2) Avadel Ireland Ltd. (f/k/a Flamel Ireland Ltd.)
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Ireland
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3) Avadel Investment Company, Ltd.
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Cayman Islands
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4) Avadel France Holding SAS
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France
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A. Avadel Research SAS
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France
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5) Avadel Finance Ireland Designated Activity Company
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Ireland
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A. Avadel Finance Cayman Ltd.
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Cayman Islands
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/s/ Gregory J. Divis
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Gregory J. Divis
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Chief Executive Officer
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/s/ Thomas S. McHugh
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Thomas S. McHugh
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Senior Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Gregory J. Divis
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Gregory J. Divis
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Chief Executive Officer
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Avadel Pharmaceuticals plc
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March 16, 2020
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Thomas S. McHugh
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Thomas S. McHugh
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Senior Vice President and Chief Financial Officer
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Avadel Pharmaceuticals plc
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March 16, 2020
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