(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended: December 31, 2014
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Or
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
(State or other jurisdiction of
incorporation or organization)
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04-3324394
(I.R.S. Employer
Identification No.)
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8 Sylvan Way
Parsippany, New Jersey
(Address of principal executive offices)
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07054
(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $.001 Par Value Per Share
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NASDAQ Global Select Market
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Page
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EX-2.3
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EX-10.33
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EX-10.34
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EX-21
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EX-23
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EX-31.1
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EX-31.2
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EX-32.1
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EX-32.2
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EX-101 INSTANCE DOCUMENT
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EX-101 SCHEMA DOCUMENT
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EX-101 CALCULATION LINKBASE DOCUMENT
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EX-101 LABELS LINKBASE DOCUMENT
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EX-101 PRESENTATION LINKBASE DOCUMENT
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EX-101 DEFINITION LINKBASE DOCUMENT
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Product or Product
in Development
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Development Stage
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Mechanism/Target
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Clinical Indication(s)/Therapeutic Areas
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Marketed Products
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Angiomax
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Marketed
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Direct thrombin inhibitor
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U.S. - for use as an anticoagulant in combination with aspirin in patients with unstable angina undergoing percutaneous transluminal coronary angioplasty, or PTCA, and for use in patients undergoing percutaneous coronary intervention, or PCI, including patients with or at risk of heparin induced thrombocytopenia and thrombosis syndrome, or HIT/HITTS
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Europe - for use as an anticoagulant in patients undergoing PCI, adult patients with acute coronary syndrome, or ACS, and for the treatment of patients with ST-segment elevation myocardial infarction, or STEMI, undergoing primary PCI
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Cleviprex
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Marketed in the United States, Australia, Germany, Spain and Switzerland
Approved in Austria, Belgium, Canada, France, Liechtenstein, Luxembourg, the Netherlands, New Zealand, Sweden and the United Kingdom
Marketing Authorization Application, or MAA submitted for other European Union countries
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Calcium channel blocker
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U.S. - Blood pressure reduction when oral therapy is not feasible or not desirable
Ex-U.S. - with various indications for blood pressure control in perioperative settings
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Minocin IV
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Marketed in the United States
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Tetracycline-class antibiotic
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Treatment of bacterial infections due to susceptible isolates of designated microorganisms, including Acinetobacter species.
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Orbactiv
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Marketed in the United States; MAA accepted for review in the European Union in the first quarter of 2014
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Antibiotic
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Treatment of adult patients with acute bacterial skin and skin structure infections, or ABSSSI, caused or suspected to be caused by susceptible isolates of the label-designated gram-positive microorganisms, including methicillin-resistant Staphylococcus aureus, or MRSA
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PreveLeak
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Approved in the United States; Marketed in the European Union
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Mechanical vascular and surgical sealant
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U.S. - for use as a vascular sealant Europe - for use in cardiac, vascular and soft tissue reconstructions to achieve adjunctive hemostasis by mechanically sealing areas of leakage
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Ready-to-use Argatroban
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Marketed in the United States
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Direct thrombin inhibitor
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For prophylaxis or treatment of thrombosis in adult patients with HIT and for use as an anticoagulant in adult patients with or at risk for HIT undergoing PCI
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Recothrom
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Marketed in the United States
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Recombinant human thrombin
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For use as an aid to hemostasis to help control oozing blood and mild bleeding during surgical procedures
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Acute care generic products:
Adenosine, Amiodarone, Esmolol and Milrinone
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Approved in the United States
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Various
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Acute cardiovascular
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Acute care generic products: Azithromycin and Clindamycin
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Approved in the United States
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Various
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Serious infectious disease
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Acute care generic products: Haloperidol, Midazolam, Ondansteron and Rocuronium
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Approved in the United States; Midazolam, Ondansetron and Rocuronium marketed in the United States
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Various
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Surgery and perioperative
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Registration Stage
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Cangrelor
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New Drug Application, or NDA, in the United States accepted for filing by the Food and Drug Administration, or FDA, in the third quarter of 2013; MAA accepted for review in the European Union in the fourth quarter of 2013
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Antiplatelet agent
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Prevention of platelet activation and aggregation when oral therapy is not feasible or not desirable
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IONSYS
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Supplemental New Drug Application, or sNDA, accepted for filing by the FDA in the third quarter of 2014; MAA accepted for review in European Union in the third quarter of 2014
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Patient-controlled analgesia system
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Short-term management of acute postoperative pain
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Raplixa
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Biologics License Application, or BLA, accepted for filing by the FDA in April 2014; MAA submission in the European Union accepted for review in the fourth quarter of 2013
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Dry powder topical formulation of fibrinogen and thrombin
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For use as an aid to stop bleeding during surgery
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RPX-602
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sNDA filed with the FDA in December 2014
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Improved formulation of Minocin IV
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Treatment of bacterial infections due to susceptible isolates of designated microorganisms, including Acinetobacter species.
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Research and Development Stage
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ABP-700
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Phase 1
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Analogue of etomidate, an intravenous imidazole agent used for induction of general anesthesia
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Sedative-hypnotic used to induce and maintain sedation for procedural care and general anesthesia for surgical care
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ALN-PCSsc
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Phase 1 being conducted by Alnylam
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PCSK-9 gene antagonist addressing low-density lipoprotein cholesterol disease modification
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Treatment of hypercholesterolemia
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Carbavance
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Phase 3 clinical trial commenced in the fourth quarter of 2014
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Combination of RPX-7009, a proprietary, novel beta-lactamase inhibitor, with meropenem, a carbapenem antibiotic
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Treatment of hospitalized patients with serious gram-negative bacterial infections
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MDCO-216
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Phase 1 completed
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Naturally occurring variant of a protein found in high-density lipoprotein
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Reversal cholesterol transport agent to reduce atherosclerotic plaque burden development and thereby reduce the risk of adverse thrombotic events
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bacteria are becoming non-susceptible or resistant to one or more of these existing antibiotics;
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some of these antibiotics, referred to as bacteriostatic drugs, inhibit the growth of pathogens and rely on the immune system to actually kill the bacteria. In contrast, bactericidal antibiotics, such as oritavancin kill bacteria independent of the immune system;
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many of the antibiotics used to treat ABSSSI are difficult or inconvenient to administer, as they must be administered intravenously more than once, and in some cases once or twice daily for seven or more days, and may require the insertion of a peripherally inserted central catheter (PICC line). As a result, patients receiving these antibiotics are typically either hospitalized or receive their antibiotics as an outpatient, either at an infusion center or at home, often once or twice a day; and
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therapeutic monitoring of blood levels is commonly utilized when the most frequently used intravenous antibiotic used for the treatment of ABSSSI due to MRSA is given to a patient.
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our Angiomax sales efforts in the United States on hospital systems, individual hospitals, and health care providers, including interventional cardiologists in cardiac catheterization laboratories;
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our Cleviprex sales efforts on hospital systems, individual hospitals, and health care providers, including neurology, cardiology, surgical care and emergency medicine departments;
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our Minocin IV sales efforts on hospital systems and individual hospitals, including infectious disease, emergency medicine and critical care physicians, microbiologists and pharmacists;
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our Orbactiv sales efforts in the United States on hospital systems, individual hospitals, hospital and physician owned infusion centers and health care providers, including infectious disease and emergency room physicians, hospitalists, infectious disease pharmacists and microbiologists;
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our Recothrom sales efforts on the top identified accounts where surgical procedures, including orthopedic, burn, trauma, plastic, vascular, cardiothoracic, neurosurgical and general surgery, are performed in the United States; and
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our ready-to-use Argatroban sales efforts on group purchasing organizations, hospital systems, including hospital pharmacies and the acute care generic products sales efforts on hospital systems, including hospital pharmacies.
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mechanical hemostats, such as absorbable gelatin sponge, collagen, cellulose, or polysaccharide-based hemostats applied as sponges, fleeces, bandages, or microspheres, which do not contain thrombin or any other active biologic compounds;
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active hemostats, which are thrombin products that may be derived from bovine or human pooled plasma purification or human recombinant manufacturing processes;
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flowable hemostats, which consist of a granular bovine or porcine gelatin component that is mixed with saline or reconstituted thrombin to form a semi-solid, flowable putty;
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fibrin sealants, which consist of thrombin and fibrinogen that can be sprayed or applied via patch directly to the bleeding surface; and
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surgical sealants, which can be composed of glutaraldehyde and bovine serum albumin, polyethylene glycol polymers, and cyanoacrolates.
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pre-clinical laboratory tests, animal studies and formulation studies;
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submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin;
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adequate and well-controlled clinical trials to establish the safety and efficacy of the drug for each indication;
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submission to the FDA of an NDA or BLA;
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satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current good manufacturing practices, or cGMP; and
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FDA review and approval of the NDA or BLA.
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evaluate dosage tolerance and appropriate dosage;
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identify possible adverse effects and safety risks; and
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evaluate preliminarily the efficacy of the drug for specific indications.
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the required patent information has not been filed;
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the listed patent has expired;
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the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or
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the listed patent is invalid, unenforceable, or will not be infringed by the new product.
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Decentralised procedure.
Using the decentralised procedure, an applicant may apply for simultaneous authorization in more than one European Union country of medicinal products that have not yet been authorized in any European Union country and that do not fall within the mandatory scope of the centralised procedure.
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Mutual recognition procedure.
In the mutual recognition procedure, a medicine is first authorized in one European Union member state, in accordance with the national procedures of that country. Following this, further marketing authorizations can be sought from other European Union countries in a procedure whereby the countries concerned agree to recognize the validity of the original, national marketing authorization.
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Item 1A.
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Risk Factors.
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our ability to maintain market exclusivity for Angiomax in the United States through the enforcement of the ‘727 patent and the ‘343 patent during the period following the expiration of the patent term of the ‘404 patent on December 15, 2014 and the six month pediatric exclusivity on June 15, 2015 through at least May 1, 2019, the date on which we agreed APP may sell a generic version of Angiomax. If we lose our appeal of the adverse court decision we received in our patent infringement litigation with Hospira or if Mylan prevails in its appeal of the court decision we received in our patent infringement litigation with Mylan, or if we receive an adverse decision in any other patent infringement litigation relating to the ‘727 patent or the ‘343 patent, Angiomax could be subject to generic competition prior to May 1, 2019, and possibly as early as June 15, 2015;
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the continued acceptance by regulators, physicians, patients and other key decision-makers of Angiomax as a safe, therapeutic and cost-effective alternative to heparin and other products used in current practice or currently being developed;
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our ability to further develop Angiomax and obtain marketing approval of Angiomax for use in additional patient populations and the clinical data we generate to support expansion of the product label;
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the overall number of PCI procedures performed;
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the ability of our third-party supply and manufacturing partners to provide us with sufficient quantities of Angiomax;
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the impact of competition from existing competitive products and from competitive products that may be approved in the future;
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the continued safety and efficacy of Angiomax;
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to what extent and in what amount government and third-party payers cover or reimburse for the costs of Angiomax; and
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our success and the success of our international distributors in selling and marketing Angiomax in Europe and in other countries outside the United States, particularly in light of the expiration of our principal patents covering Angiomax in Europe in 2015.
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make regulatory submissions and obtain regulatory approvals in the timeframes anticipated;
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train our existing sales force to market and sell the products that are to be sold by it;
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train, deploy and support a qualified sales force to market and sell Orbactiv, Minocin IV and other infectious disease products;
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secure formulary approvals at our hospital customers;
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have third parties manufacture the products in sufficient quantities;
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implement and maintain agreements with wholesalers, distributors and group purchasing organizations;
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receive adequate levels of coverage and reimbursement for these products from governments and third‑party payers;
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develop and execute marketing and sales strategies and programs for the products.
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$49.4 million
due to the former equityholders of Targanta and up to
$25.0 million
in additional payments to other third parties for the Targanta transaction;
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$189.3 million
due to the former equityholders of Incline and up to
$113.0 million
in additional payments to other third parties for the Incline transaction;
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$140.0 million
for the ProFibrix transaction;
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$315.7 million
for the Rempex transaction;
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$112.0 million
for the Tenaxis transaction;
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$170.0 million
for the license and collaboration agreement with Alnylam;
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$422.0 million
due to our licensing of MDCO‑216 from Pfizer; and
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$54.5 million
due to our licensing of cangrelor from AstraZeneca.
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the extent to which Angiomax is commercially successful globally;
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our ability to maintain market exclusivity for Angiomax in the United States through the enforcement of the ‘727 patent and the ‘343 patent during the period following the expiration of the patent term of the ‘404 patent on December 15, 2014 and the six month pediatric exclusivity on June 15, 2015 through at least May 1, 2019, the date on which we agreed APP may sell a generic version of Angiomax. If we lose our appeal of the adverse court decision we received in our patent infringement litigation with Hospira or if Mylan prevails in its appeal of the court decision we received in our patent infringement litigation with Mylan, or if we receive an adverse decision in any other patent infringement litigation relating to the ‘727 patent or the ‘343 patent, Angiomax could be subject to generic competition prior to May 1, 2019, and possibly as early as June 15, 2015;
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the extent to which our submissions and planned submissions for regulatory approval of products in development are approved on a timely basis, if at all;
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the extent to which our products other than Angiomax and our products in development are commercially successful in the United States;
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the extent to which we are successful in our efforts to commercialize our products and products in development if and when approved outside the United States;
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the consideration paid by us and to be paid by us in connection with acquisitions and licenses of development-stage compounds, clinical-stage product candidates, approved products, or businesses, and in connection with other strategic arrangements;
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the progress, level, timing and cost of our research and development activities related to our clinical trials and non-clinical studies with respect to Angiomax, Cleviprex, Orbactiv and our products in development;
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the cost and outcomes of regulatory submissions and reviews for approval of our approved products in additional countries and for additional indications, and of our products in development globally;
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whether we develop and commercialize our products in development on our own or through licenses and collaborations with third parties and the terms and timing of such arrangements, if any;
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the continuation or termination of third-party manufacturing, distribution and sales and marketing arrangements;
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the size, cost and effectiveness of our sales and marketing programs globally;
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the amounts of our payment obligations to third parties as to our products and products in development; and
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our ability to defend and enforce our intellectual property rights.
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difficulty in integrating the operations, products or product candidates and personnel of an acquired company;
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entry into markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions;
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failure to successfully further develop the acquired or licensed business, product, compounds, programs or technology or to achieve strategic objectives, including commercializing and marketing successfully the development stage compounds and clinical stage candidates that we acquire or license;
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disruption of our ongoing business and distraction of our management and employees from other opportunities and challenges;
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inadequate or unfavorable clinical trial results from acquired or contracted for products in development;
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inability to retain personnel, key customers, distributors, vendors and other business partners of the acquired company, or acquired or licensed product or technology;
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potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges of an acquired company, or acquired or licensed product or technology, including but not limited to, problems, liabilities or other shortcomings or challenges with respect to intellectual property, product quality, revenue recognition or other accounting practices, employee, customer or partner disputes or issues and other legal and financial contingencies and known and unknown liabilities;
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liability for activities of the acquired company or licensor before the acquisition or license, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities;
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exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition or license, including but not limited to, claims from terminated employees, customers, former stockholders or other third-parties; and
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difficulties in the integration of the acquired company's departments, systems, including accounting, human resource and other administrative systems, technologies, books and records, and procedures, as well as in maintaining uniform standards, controls, including internal control over financial reporting required by the Sarbanes−Oxley Act of 2002 and related procedures and policies.
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requiring us to dedicate a substantial portion of cash flow from operations to the payment of interest on, and principal of, our debt, which will reduce the amounts available to fund working capital, capital expenditures, product development efforts and other general corporate purposes;
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increasing our vulnerability to general adverse economic, industry and market conditions;
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limiting our ability to obtain additional financing in the future;
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limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and
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placing us at a possible competitive disadvantage to less leveraged competitors and competitors that have less debt, better debt servicing options or better access to capital resources.
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mechanical hemostats, such as absorbable gelatin sponge, collagen, cellulose, or polysaccharide-based hemostats applied as sponges, fleeces, bandages, or microspheres, which do not contain thrombin or any other active biologic compounds;
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active hemostats, which are thrombin products that may be derived from bovine or human pooled plasma purification or human recombinant manufacturing processes;
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flowable hemostats, which consist of a granular bovine or porcine gelatin component that is mixed with saline or reconstituted thrombin to form a semi-solid, flowable putty;
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fibrin sealants, which consist of thrombin and fibrinogen that can be sprayed or applied via patch directly to the bleeding surface; and
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surgical sealants, which can be composed of glutaraldehyde and bovine serum albumin, polyethylene glycol polymers, and cyanoacrolates.
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continue to improve operating, administrative, and information systems;
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accurately predict future personnel and resource needs to meet contract commitments;
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track the progress of ongoing projects; and
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attract and retain qualified management, sales, professional, scientific and technical operating personnel.
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political and economic determinations that adversely impact pricing or reimbursement policies;
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our customers' ability to obtain reimbursement for procedures using our products in foreign markets;
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compliance with complex and changing foreign legal, tax, accounting and regulatory requirements;
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language barriers and other difficulties in providing long-range customer support and service;
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longer accounts receivable collection times;
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significant foreign currency fluctuations, which could result in increased operating expenses and reduced revenues;
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trade restrictions and restrictions on direct investment by foreign entities;
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reduced protection of intellectual property rights in some foreign countries; and
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the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
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unilaterally reduce or modify the government’s obligations under such contracts, including by imposing equitable price adjustments, without the consent of the other party;
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cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable;
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decline, in whole or in part, to exercise an option to renew the contract;
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claim rights to data, including intellectual property rights, developed under such contracts;
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audit contract-related costs and fees, including allocated indirect costs;
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suspend the contractor from receiving new contracts pending resolution of alleged violations of procurement laws or regulations in the event of wrongdoing by us;
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take actions that result in a longer development timeline than expected;
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direct the course of a development program in a manner not chosen by the government contractor;
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impose U.S. manufacturing requirements for products that embody inventions conceived or first reduced to practice under such contracts;
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suspend or debar the contractor from doing future business with the government or a specific government agency;
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pursue criminal or civil remedies under the False Claims Act, False Statements Act and similar remedy provisions specific to government agreements; and
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limit the government’s financial liability to amounts appropriated by the U.S. Congress on a fiscal-year basis, thereby leaving some uncertainty about the future availability of funding for a program even after it has been funded for an initial period.
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specialized accounting systems unique to government contracts;
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potential liability for price adjustments or recoupment of government funds after such funds have been spent;
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public disclosures of certain non-proprietary contract information, which may enable competitors to gain insights into our research program; and
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mandatory socioeconomic compliance requirements, including labor standards, non-discrimination and affirmative action programs and environmental compliance requirements.
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the Federal Acquisition Regulation, or FAR, and agency-specific regulations supplemental to the FAR, which comprehensively regulate the procurement, formation, administration and performance of government contracts;
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the business ethics and public integrity obligations, which govern conflicts of interest and the hiring of former government employees, restrict the granting of gratuities and funding of lobbying activities and incorporate other requirements such as the Anti-Kickback Act, the Procurement Integrity Act, the False Claims Act and the Foreign Corrupt Practices Act;
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export and import control laws and regulations; and
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laws, regulations and executive orders restricting the exportation of certain products and technical data.
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termination of any government contracts, including our BARDA contract;
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suspension of payments;
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fines; and
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suspension or prohibition from conducting business with the U.S. government.
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delay or otherwise adversely impact the manufacturing, development or commercialization of our products, our products in development or any additional products or product candidates that we may acquire or develop;
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require us to seek a new collaborator or undertake unforeseen additional responsibilities or devote unforeseen additional resources to the manufacturing, development or commercialization of our products; or
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result in the termination of the development or commercialization of our products.
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reliance on the third party for regulatory compliance and quality assurance;
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the possible breach of the manufacturing or supply agreement by the third party; and
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the possible termination or non-renewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.
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collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;
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collaborators may not pursue development and commercialization of our products in development or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’
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collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;
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collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products in development if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
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a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products;
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collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or otherwise expose us to potential litigation;
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collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;
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disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaborations;
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disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our products or products in development or that result in costly litigation or arbitration that diverts management attention and resources; and
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collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable products and products in development.
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delay or prevent the successful commercialization of any of the products or product candidates in the jurisdiction for which approval is sought;
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diminish our competitive advantage; and
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defer or decrease our receipt of revenue.
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our clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials which even if undertaken cannot ensure we will gain approval;
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data obtained from pre-clinical testing and clinical trials may be subject to varying interpretations, which could result in the FDA or other regulatory authorities deciding not to approve a product in a timely fashion, or at all;
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the cost of clinical trials may be greater than we currently anticipate;
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regulators, ethics committees or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site;
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•
|
we, or the FDA or other regulatory authorities, might suspend or terminate a clinical trial at any time on various grounds, including a finding that participating patients are being exposed to unacceptable health risks. For example, we have in the past voluntarily suspended enrollment in one of our clinical trials to review an interim analysis of safety data from the trial; and
|
•
|
the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.
|
•
|
delay in approving or refusal to approve a product;
|
•
|
product recall or seizure;
|
•
|
suspension or withdrawal of an approved product from the market;
|
•
|
delays in, suspension of or prohibition of commencing, clinical trials of products in development;
|
•
|
interruption of production;
|
•
|
operating restrictions;
|
•
|
untitled or warning letters;
|
•
|
injunctions;
|
•
|
fines and other monetary penalties;
|
•
|
the imposition of civil or criminal penalties;
|
•
|
disruption of importing and exporting activities; and
|
•
|
unanticipated expenditures.
|
•
|
the Federal Anti-Kickback Law, which prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual or furnishing or arranging for a good or service for which payment may be made under federal health care programs such as Medicare and Medicaid;
|
•
|
other Medicare laws and regulations that prescribe the requirements for coverage and payment for services performed by our customers, including the amount of such payment;
|
•
|
the Federal False Claims Act, which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government;
|
•
|
the Federal False Statements Act, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with delivery of or payment for health care benefits, items or services; and
|
•
|
various state laws that impose similar requirements and liability with respect to state healthcare reimbursement and other programs.
|
•
|
obtain and maintain U.S. and foreign patents, including defending those patents against adverse claims;
|
•
|
secure patent term extension for the patents covering our approved products;
|
•
|
protect trade secrets;
|
•
|
operate without infringing the proprietary rights of others; and
|
•
|
prevent others from infringing our proprietary rights.
|
•
|
approval or rejection of submissions for marketing approval for our products and products in development;
|
•
|
regulatory actions by the FDA or a foreign jurisdiction limiting or revoking the use of our products or products in development;
|
•
|
changes in securities analysts' estimates of our financial performance;
|
•
|
changes in valuations of similar companies;
|
•
|
variations in our operating results;
|
•
|
acquisitions and strategic partnerships;
|
•
|
announcements of technological innovations or new commercial products by us or our competitors or the filing of ANDAs, NDAs or BLAs for products competitive with ours;
|
•
|
announcements of results of clinical trials or nonclinical studies by us or third parties relating to our products, products in development or those of our competitors or of regulatory proceedings by us or our competitors;
|
•
|
the timing, amount and receipt of revenue from sales of our products and margins on sales of our products;
|
•
|
changes in governmental regulations;
|
•
|
developments in patent rights or other proprietary rights, particularly with respect to our U.S. Angiomax patents;
|
•
|
the extent to which Angiomax is commercially successful globally;
|
•
|
our ability to maintain market exclusivity for Angiomax in the United States through the enforcement of the '727 patent and the '343 patent during the period following the expiration of the patent term of the '404 patent on December 15, 2014 and the six month pediatric exclusivity on June 15, 2015 through at least May 1, 2019, the date on which we agreed APP may sell a generic version of Angiomax. If we lose our appeal of the adverse court decision we received in our patent infringement litigation with Hospira or if Mylan prevails in its appeal of the court decision we received in our patent infringement litigation with Mylan, or if we receive an adverse decision in any other patent infringement litigation relating to the ‘727 patent or the ‘343 patent, Angiomax could be subject to generic competition prior to May 1, 2019, and possibly as early as June 15, 2015;
|
•
|
developments in our ongoing litigation and significant new litigation;
|
•
|
developments or issues with our contract manufacturers;
|
•
|
changes in our management; and
|
•
|
general market conditions.
|
•
|
Section 203 of the Delaware General Corporation Law, which provides that we may not enter into a business combination with an interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in the manner prescribed in Section 203;
|
•
|
our board of directors has the authority to issue, without a vote or action of stockholders, up to 5,000,000 shares of a new series of preferred stock and to fix the price, rights, preferences and privileges of those shares, each of which could be superior to the rights of holders of our common stock;
|
•
|
our directors are elected to staggered terms, which prevents our entire board of directors from being replaced in any single year;
|
•
|
our directors may be removed only for cause and then only by the affirmative vote of the holders of at least 75% of the votes which all stockholders would be entitled to cast in any annual election of directors;
|
•
|
the size of our board of directors is determined by resolution of the board of directors;
|
•
|
any vacancy on our board of directors, however occurring, including a vacancy resulting from an enlargement of our board, may only be filled by vote of a majority of our directors then in office, even if less than a quorum;
|
•
|
only our board of directors, the chairman of the board or our president may call special meetings of stockholders;
|
•
|
our by-laws may be amended, altered or repealed by (i) the affirmative vote of a majority of our directors, subject to any limitations set forth in the by-laws, or (ii) the affirmative vote of the holders of at least 75% of the votes which all the stockholders would be entitled to cast in any annual election of directors;
|
•
|
stockholders must provide us with advance notice, and certain information specified in our by-laws, in connection with nominations or proposals by such stockholder for consideration at an annual meeting;
|
•
|
stockholders may not take any action by written consent in lieu of a meeting; and
|
•
|
our certificate of incorporation may only be amended or repealed by the affirmative vote of a majority of our directors and the affirmative vote of the holders of at least 75% of the votes which all the stockholders would be entitled to cast in any annual election of directors (and plus any separate class vote that might in the future be required pursuant to the terms of any series of preferred stock that might be outstanding at the time any of these amendments are submitted to stockholders).
|
•
|
responding to proxy contests and other actions by activist shareholders may be costly and time-consuming and may disrupt our operations and divert the attention of management and our employees;
|
•
|
perceived uncertainties as to our future direction may result in our inability to consummate potential acquisitions, collaborations or in-licensing opportunities and may make it more difficult to attract and retain qualified personnel and business partners; and
|
•
|
if individuals are elected to our board of directors with a specific agenda different from ours, it may adversely affect our ability to effectively and timely implement our strategic plan and create additional value for our stockholders.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders.
|
|
Common Stock
Price
|
||||||
|
High
|
|
Low
|
||||
Year Ended December 31, 2013
|
|
|
|
|
|
||
First Quarter
|
$
|
35.19
|
|
|
$
|
24.01
|
|
Second Quarter
|
$
|
37.40
|
|
|
$
|
28.63
|
|
Third Quarter
|
$
|
34.81
|
|
|
$
|
28.70
|
|
Fourth Quarter
|
$
|
39.40
|
|
|
$
|
30.60
|
|
Year Ended December 31, 2014
|
|
|
|
|
|
||
First Quarter
|
$
|
41.28
|
|
|
$
|
27.14
|
|
Second Quarter
|
$
|
29.75
|
|
|
$
|
23.53
|
|
Third Quarter
|
$
|
29.82
|
|
|
$
|
22.31
|
|
Fourth Quarter
|
$
|
28.03
|
|
|
$
|
19.92
|
|
|
|
|
|
12/09*
|
|
12/10*
|
|
12/11*
|
|
12/12*
|
|
12/13*
|
|
12/14*
|
The Medicines Company
|
100.00
|
|
169.42
|
|
223.50
|
|
287.41
|
|
463.07
|
|
331.77
|
NASDAQ Composite
|
100.00
|
|
117.61
|
|
118.70
|
|
139.00
|
|
196.83
|
|
223.74
|
NASDAQ Biotechnology
|
100.00
|
|
106.73
|
|
122.40
|
|
166.72
|
|
286.55
|
|
379.71
|
*
|
|
Fiscal year ended December 31.
|
Item 6.
|
Selected Financial Data.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||
|
(In thousands, except per share data)
|
|||||||||||||||||||
Statements of Operations Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
724,408
|
|
|
$
|
687,864
|
|
|
$
|
558,588
|
|
|
$
|
484,732
|
|
|
$
|
437,645
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of revenue
|
287,630
|
|
|
262,785
|
|
|
177,339
|
|
|
156,866
|
|
|
129,299
|
|
||||||
Research and development
|
159,181
|
|
|
146,930
|
|
|
126,423
|
|
|
110,180
|
|
|
85,241
|
|
||||||
Selling, general and administrative
|
342,164
|
|
|
264,958
|
|
|
171,753
|
|
|
159,617
|
|
|
158,690
|
|
||||||
Total operating expenses
|
788,975
|
|
|
674,673
|
|
|
475,515
|
|
|
426,663
|
|
|
373,230
|
|
||||||
Income (loss) from operations
|
(64,567
|
)
|
|
13,191
|
|
|
83,073
|
|
|
58,069
|
|
|
64,415
|
|
||||||
Settlement
|
25,736
|
|
|
—
|
|
|
—
|
|
|
17,984
|
|
|
—
|
|
||||||
Co-promotion and profit share income
|
24,236
|
|
|
17,383
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
||||||
Loss in equity investment
|
(1,711
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest expense
|
(15,701
|
)
|
|
(15,531
|
)
|
|
(8,005
|
)
|
|
—
|
|
|
—
|
|
||||||
Investment impairment
|
(7,500
|
)
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other income (expense)
|
322
|
|
|
1,577
|
|
|
1,140
|
|
|
1,790
|
|
|
(267
|
)
|
||||||
Income (loss) before income taxes
|
(39,185
|
)
|
|
16,620
|
|
|
86,208
|
|
|
77,843
|
|
|
64,148
|
|
||||||
(Provision for) benefit from income taxes
|
6,837
|
|
|
(1,360
|
)
|
|
(35,038
|
)
|
|
50,034
|
|
|
40,487
|
|
||||||
Net income (loss)
|
(32,348
|
)
|
|
15,260
|
|
|
51,170
|
|
|
127,877
|
|
|
104,635
|
|
||||||
Net loss attributable to non-controlling interest
|
138
|
|
|
252
|
|
|
84
|
|
|
—
|
|
|
—
|
|
||||||
Net income (loss) attributable to The Medicines Company
|
$
|
(32,210
|
)
|
|
$
|
15,512
|
|
|
$
|
51,254
|
|
|
$
|
127,877
|
|
|
$
|
104,635
|
|
|
Basic earnings per common share attributable to The Medicines Company
|
$
|
(0.50
|
)
|
|
$
|
0.27
|
|
|
$
|
0.96
|
|
|
$
|
2.39
|
|
|
$
|
1.98
|
|
|
Diluted earnings per common share attributable to The Medicines Company
|
$
|
(0.50
|
)
|
|
$
|
0.25
|
|
|
$
|
0.93
|
|
|
$
|
2.35
|
|
|
$
|
1.97
|
|
|
Shares used in computing basic earnings (loss) per common share
|
64,473
|
|
|
58,096
|
|
|
53,545
|
|
|
53,496
|
|
|
52,842
|
|
||||||
Shares used in computing diluted earnings (loss) per common share
|
64,473
|
|
|
62,652
|
|
|
55,346
|
|
|
54,407
|
|
|
53,184
|
|
|
As of December 31,
|
||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||
|
(In thousands)
|
||||||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents, available for sale securities and accrued interest receivable
|
$
|
370,741
|
|
|
376,727
|
|
|
570,669
|
|
|
$
|
340,886
|
|
|
$
|
247,923
|
|
Working capital
|
253,151
|
|
|
417,188
|
|
|
621,169
|
|
|
327,088
|
|
|
239,251
|
|
|||
Total assets
|
1,885,705
|
|
|
1,741,282
|
|
|
972,182
|
|
|
692,647
|
|
|
474,124
|
|
|||
Long-term liabilities
|
561,791
|
|
|
674,868
|
|
|
250,754
|
|
|
26,370
|
|
|
31,156
|
|
|||
Accumulated deficit
|
(77,109
|
)
|
|
(44,899
|
)
|
|
(60,411
|
)
|
|
(111,665
|
)
|
|
(239,542
|
)
|
|||
Total stockholders’ equity
|
920,091
|
|
|
892,161
|
|
|
586,222
|
|
|
511,642
|
|
|
357,598
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Year Ended December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|||||||||||||
Angiomax
|
$
|
635,703
|
|
|
$
|
608,572
|
|
|
$
|
27,131
|
|
|
4.5
|
%
|
Recothrom
|
64,448
|
|
|
63,256
|
|
|
1,192
|
|
|
1.9
|
%
|
|||
Other products
|
24,257
|
|
|
16,036
|
|
|
8,221
|
|
|
51.3
|
%
|
|||
Total net revenue
|
$
|
724,408
|
|
|
$
|
687,864
|
|
|
$
|
36,544
|
|
|
5.3
|
%
|
•
|
expenses in connection with the manufacture of our products sold;
|
•
|
royalty expenses under our agreements with Biogen and HRI related to Angiomax, our agreement with AstraZeneca related to Cleviprex, our agreement with Lilly related to Orbactiv and our agreement with Eagle related to ready-to-use Argatroban;
|
•
|
amortization of the costs of license agreements, product rights, developed product rights and other identifiable intangible assets, which result from product and business acquisitions and impairment charges related to product rights;
|
•
|
logistic costs related to Angiomax, Cleviprex, Orbactiv, Minocin IV, PreveLeak and ready-to-use Argatroban, including distribution, storage, and handling costs; and
|
•
|
expenses under our license agreement with BMS for Recothrom and expenses under our supply agreement for Recothrom with BMS including product cost and logistics as well as royalty expense and amortization of product license.
|
|
Year Ended December 31,
|
||||||||||||
|
2014
|
|
% of Total
Cost
|
|
2013
|
|
% of Total
Cost
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
Manufacturing/Logistics
|
$
|
98,199
|
|
|
34
|
%
|
|
$
|
84,725
|
|
|
32
|
%
|
Royalty
|
142,585
|
|
|
50
|
%
|
|
154,099
|
|
|
59
|
%
|
||
Amortization of acquired product rights and intangible assets
|
46,846
|
|
|
16
|
%
|
|
23,961
|
|
|
9
|
%
|
||
Total cost of revenue
|
$
|
287,630
|
|
|
100
|
%
|
|
$
|
262,785
|
|
|
100
|
%
|
|
Year Ended December 31,
|
||||||||||||
|
2014
|
|
% of Total R&D
|
|
2013
|
|
% of Total R&D
|
||||||
|
|
||||||||||||
Marketed products
|
$
|
35,109
|
|
|
22.1
|
%
|
|
$
|
56,639
|
|
|
38.5
|
%
|
Research and development candidates
|
45,638
|
|
|
28.7
|
%
|
|
44,361
|
|
|
30.2
|
%
|
||
Research and development product candidates
|
78,345
|
|
|
49.2
|
%
|
|
45,930
|
|
|
31.3
|
%
|
||
Total research and development expenses
|
$
|
159,092
|
|
|
100.0
|
%
|
|
$
|
146,930
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|
|
|||||||||
Selling, general and administrative expenses
|
$
|
342,164
|
|
|
$
|
264,958
|
|
|
$
|
77,206
|
|
|
29.1
|
%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||
|
(In thousands)
|
|
|
|
|
|||||||
Settlement
|
$
|
25,736
|
|
|
—
|
|
|
$
|
25,736
|
|
|
*
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|
|
|||||||||
Co-promotion and profit share income
|
$
|
24,236
|
|
|
$
|
17,383
|
|
|
$
|
6,853
|
|
|
39.4
|
%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
||||
|
(In thousands)
|
|
|
|
|
||||||
Loss in equity investment
|
(1,711
|
)
|
|
—
|
|
|
$
|
(1,711
|
)
|
|
*
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|
|
|||||||||
Interest expense
|
$
|
(15,701
|
)
|
|
$
|
(15,531
|
)
|
|
$
|
(170
|
)
|
|
(1.1
|
)%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||
|
(In thousands)
|
|
|
|
|
|||||||
Investment impairment
|
$
|
(7,500
|
)
|
|
—
|
|
|
$
|
(7,500
|
)
|
|
*
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|
|
|||||||||
Other income
|
$
|
322
|
|
|
$
|
1,577
|
|
|
$
|
(1,255
|
)
|
|
(79.6
|
)%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
||||||
|
(In thousands)
|
|
|
|
|
||||||||
Benefit (provision) for income tax
|
$
|
6,837
|
|
|
$
|
(1,360
|
)
|
|
$
|
8,197
|
|
|
*
|
|
Year Ended December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|||||||||||||
Angiomax
|
$
|
608,572
|
|
|
$
|
548,229
|
|
|
$
|
60,343
|
|
|
11.0
|
%
|
Recothrom
|
63,256
|
|
|
—
|
|
|
63,256
|
|
|
100.0
|
%
|
|||
Other products
|
16,036
|
|
|
10,359
|
|
|
5,677
|
|
|
54.8
|
%
|
|||
Total net revenue
|
$
|
687,864
|
|
|
$
|
558,588
|
|
|
$
|
129,276
|
|
|
23.1
|
%
|
•
|
expenses in connection with the manufacture of our products sold and logistics costs related to Angiomax, Cleviprex and ready-to-use Argatroban, including distribution, storage, and handling costs;
|
•
|
royalty expenses under our agreements with Biogen and HRI related to Angiomax, our agreement with AstraZeneca, related to Cleviprex and our agreement with Eagle related to ready-to-use Argatroban; and
|
•
|
amortization of the costs of license agreements, product rights and other identifiable intangible assets, which result from product and business acquisitions.
|
|
Year Ended December 31,
|
||||||||||||
|
2013
|
|
% of Total
Cost
|
|
2012
|
|
% of Total
Cost
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
Manufacturing/Logistics
|
$
|
84,725
|
|
|
32
|
%
|
|
$
|
50,506
|
|
|
28
|
%
|
Royalty
|
154,099
|
|
|
59
|
%
|
|
125,930
|
|
|
71
|
%
|
||
Amortization of product rights and intangible assets
|
23,961
|
|
|
9
|
%
|
|
903
|
|
|
1
|
%
|
||
Total cost of revenue
|
$
|
262,785
|
|
|
100
|
%
|
|
$
|
177,339
|
|
|
100
|
%
|
|
Year Ended December 31,
|
||||||||||||
|
2013
|
|
% of Total R&D
|
|
2012
|
|
% of Total R&D
|
||||||
|
|
||||||||||||
Marketed products
|
24,394
|
|
|
16.6
|
%
|
|
$
|
13,170
|
|
|
10.4
|
%
|
|
Research and development candidates
|
76,606
|
|
|
52.1
|
%
|
|
84,542
|
|
|
66.9
|
%
|
||
Research and development product candidates
|
45,930
|
|
|
31.3
|
%
|
|
28,711
|
|
|
22.7
|
%
|
||
Total research and development expenses
|
$
|
146,930
|
|
|
100.0
|
%
|
|
$
|
126,423
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|
|
|||||||||
Selling, general and administrative expenses
|
$
|
264,958
|
|
|
$
|
171,753
|
|
|
$
|
93,205
|
|
|
54.3
|
%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|
|
|||||||||
Co-promotion and profit share income
|
$
|
17,383
|
|
|
$
|
10,000
|
|
|
$
|
7,383
|
|
|
73.8
|
%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|
|
|||||||||
Interest expense
|
$
|
(15,531
|
)
|
|
$
|
(8,005
|
)
|
|
$
|
(7,526
|
)
|
|
(94.0
|
)%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|
|
|||||||||
Other income
|
$
|
1,577
|
|
|
$
|
1,140
|
|
|
$
|
437
|
|
|
38.3
|
%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|
|
|||||||||
(Provision) for income tax
|
$
|
(1,360
|
)
|
|
$
|
(35,038
|
)
|
|
$
|
33,678
|
|
|
96.1
|
%
|
•
|
$49.4 million
due to the former equityholders of Targanta and up to
$25.0 million
in additional payments to other third parties for the Targanta transaction;
|
•
|
$189.3 million
due to the former equityholders of Incline and up to
$113.0 million
in additional payments to other third parties for the Incline transaction
;
|
•
|
$140.0 million
for the ProFibrix transaction;
|
•
|
$315.7 million
for the Rempex transaction;
|
•
|
$112.0 million
for the Tenaxis transaction;
|
•
|
$170.0 million
for the license and collaboration agreement with Alnylam;
|
•
|
$422.0 million
due to our licensing of MDCO-216 from Pfizer; and
|
•
|
$54.5 million
due to our licensing of cangrelor from AstraZeneca.
|
•
|
the extent to which Angiomax is commercially successful globally;
|
•
|
our ability to maintain market exclusivity for Angiomax in the United States through the enforcement of the '727 patent and the '343 patent during the period following the expiration of the patent term of the '404 patent on December 15, 2014 and the six month pediatric exclusivity on June 15, 2015 through at least May 1, 2019, the date on which we agreed APP may sell a generic version of Angiomax. If we lose our appeal of the adverse court decision we received in our patent infringement litigation with Hospira or if Mylan prevails in its appeal of the court decision we received in our patent infringement litigation with Mylan, or if we receive an adverse decision in any other patent infringement litigation relating to the ‘727 patent or the ‘343 patent, Angiomax could be subject to generic competition prior to May 1, 2019, and possibly as early as June 15, 2015;
|
•
|
the extent to which our submissions and planned submissions for regulatory approval of products in development are approved on a timely basis, if at all;
|
•
|
the extent to which our products other than Angiomax and our products in development are commercially successful in the United States;
|
•
|
the extent to which we are successful in our efforts to commercialize our products and products in development, if and when approved, outside the United States;
|
•
|
the consideration paid by us and to be paid by us in connection with acquisitions and licenses of development-stage compounds, clinical-stage product candidates, approved products, or businesses, and in connection with other strategic arrangements;
|
•
|
the progress, level, timing and cost of our research and development activities related to our clinical trials and non-clinical studies with respect to Angiomax, Cleviprex, Orbactiv and our products in development;
|
•
|
the cost and outcomes of regulatory submissions and reviews for approval of our approved products in additional countries and for additional indications, and of our products in development globally;
|
•
|
whether we develop and commercialize our products in development on our own or through licenses and collaborations with third parties and the terms and timing of such arrangements, if any;
|
•
|
the continuation or termination of third-party manufacturing, distribution and sales and marketing arrangements;
|
•
|
the size, cost and effectiveness of our sales and marketing programs globally;
|
•
|
the amounts of our payment obligations to third parties as to our products and products in development; and
|
•
|
our ability to defend and enforce our intellectual property rights.
|
|
|
|
|
Less Than
|
|
|
|
|
|
More Than
|
||||||||||
Contractual Obligations (in thousands)
(1) (2) (3)
|
|
Total
|
|
1 Year
|
|
1 - 3 Years
|
|
4 - 5 Years
|
|
5 Years
|
||||||||||
Inventory related commitments
|
|
$
|
53,347
|
|
|
$
|
52,174
|
|
|
$
|
913
|
|
|
$
|
260
|
|
|
$
|
—
|
|
Long-term debt obligations, including interest
|
|
284,138
|
|
|
3,781
|
|
|
280,357
|
|
|
—
|
|
|
—
|
|
|||||
Research and development
|
|
77,833
|
|
|
72,617
|
|
|
5,162
|
|
|
54
|
|
|
—
|
|
|||||
Operating leases
|
|
87,059
|
|
|
8,221
|
|
|
15,791
|
|
|
14,507
|
|
|
48,540
|
|
|||||
Selling, general and administrative
|
|
3,830
|
|
|
2,589
|
|
|
1,241
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
506,207
|
|
|
139,382
|
|
|
$
|
303,464
|
|
|
$
|
14,821
|
|
|
$
|
48,540
|
|
(1)
|
This table does not include any milestone and royalty payments which may become payable to third parties for which the timing and likelihood of such payments are not known, as discussed below.
|
(2)
|
This table does not include $400.0 million aggregate principal amount of the 2022 notes issued by us in January 2015.
|
(3)
|
Also excluded from the above table is a liability for uncertain tax positions totaling
$8.8 million
. This liability has been excluded because we cannot currently make a reliable estimate of the period in which the liability will be payable, if ever.
|
•
|
In connection with our acquisition of Targanta, we are obligated to pay contingent cash payments up to
$49.4 million
to the former shareholders of Targanta and up to
$25.0 million
in additional payments to Eli Lilly and InterMune upon reaching specified milestones. As a result of the Targanta acquisition, we are a party to a license agreement with Eli Lilly through our Targanta subsidiary. We are required to make payments to Eli Lilly upon reaching specified regulatory and sales milestones. In addition, we are obligated to pay royalties to Eli Lilly based on net sales of products containing Orbactiv or the other compounds in any jurisdiction in which we hold license rights to a valid patent. We are required to make a cash payment to InterMune if and when we receive from the FDA all approvals necessary for the commercial launch of Orbactiv.
|
•
|
Under our license agreement with AstraZeneca related to cangrelor, we are obligated to make additional payments of up to
$54.5 million
in the aggregate upon reaching agreed upon regulatory and commercial milestones. We are obligated to pay royalties on a country-by-country basis on annual sales of cangrelor, and on any sublicense income earned, until the later of the duration of the licensed patent rights which are necessary to manufacture, use or sell cangrelor in a country ten years from our first commercial sale of cangrelor in such country.
|
•
|
Under our license agreement with Pfizer Inc. related to MDCO-216, we agreed to pay Pfizer up to an aggregate of $410.0 million upon achievement of specified clinical, regulatory and sales milestones. We also agreed to make royalty payments to Pfizer on the sale of MDCO-216, which are payable on a product-by-product and country-by-country basis, until the latest of the expiration of the last patent or patent application covering MDCO-216, the expiration of any market exclusivity and a specified period of time after the first commercial sale of MDCO-216. In addition to these obligations to Pfizer, in connection with the license, we also agreed to make payments to third parties of up to $12.0 million in the aggregate upon the achievement of specified development milestones and continuing payments on sales of MDCO-216.
|
•
|
Under the license agreement with Eagle related to the ready-to-use formulation of Argatroban, we are obligated to share equally with Eagle the gross profits, as defined in the license agreement, of our sales of ready-to-use Argatroban.
|
•
|
In connection with our acquisition of Incline, we agreed to pay contingent payments of up to
$189.3 million
, less certain expenses, upon achievement of specified regulatory and sales milestones with respect to IONSYS. We also agreed to make payments to third parties of up to
$113.0 million
upon achievement of specified development milestones.
|
•
|
Under the license agreement with Alnylam, we agreed to pay contingent payments of up to
$170.0 million
upon achievement of specified regulatory and sales milestones for the PCSK-9 products. We have also agreed to pay to Alnylam specified royalties on net sales of the PCSK-9 products. In addition to these obligations to Alnylam, in connection with the license, we also agreed to make payments to third parties on sales of the PCSK-9 products.
|
•
|
In connection with our acquisition of ProFibrix, we agreed to pay contingent payments of up to
$140.0 million
upon achievement of specified regulatory and sales milestones with respect to Raplixa.
|
•
|
In connection with our acquisition of Rempex, we agreed to pay contingent payments of up to
$315.7 million
, less certain expenses and employer taxes owing because of such payments, upon achievement of specified development, regulatory and sales milestones.
|
•
|
In connection with our acquisition of Tenaxis, we agreed to pay contingent payments of up to
$112.0 million
upon achievement of specified regulatory and sales milestones with respect to PreveLeak;
|
•
|
In connection with our acquisition of Annovation, we agreed to pay contingent payments of up to
$26.3 million
upon achievement of certain clinical and regulatory milestones and up to
$6.5 million
in additional payments to other third parties.
|
•
|
the nature of the estimate or assumption is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and
|
•
|
the impact of the estimates and assumptions on financial condition or operating performance is material.
|
•
|
Product returns.
Our customers have the right to return any unopened product during the 18-month period beginning six months prior to the labeled expiration date and ending 12 months after the labeled expiration date. As a result, in calculating the accrual for product returns, we must estimate the likelihood that product sold might not be used within
|
•
|
Chargebacks and rebates.
Although we primarily sell products to ICS in the United States, we typically enter into agreements with hospitals, either directly or through group purchasing organizations acting on behalf of their hospital members, in connection with the hospitals’ purchases of products.
|
•
|
Fees-for-service.
We offer discounts to certain wholesalers and ICS based on contractually determined rates for certain services. We estimate our fee-for-service accruals and allowances based on historical sales, wholesaler and distributor inventory levels and the applicable discount rate. Our discounts are accrued at the time of the sale and are typically settled with the wholesalers or ICS within 60 days after the end of each respective quarter. Our fee-for-service accruals and allowances were
$0.9 million
and
$3.1 million
at
December 31, 2014
and
December 31, 2013
, respectively. A 10% change in our fee-for-service accruals and allowances would have had an approximately
$0.1 million
effect on our net revenue for the year ended
December 31, 2014
.
|
|
Cash
Discounts
|
|
Returns
|
|
Chargebacks
|
|
Rebates
|
|
Fees-for-
Service
|
||||||||||
Balance at January 1, 2012
|
$
|
1,849
|
|
|
$
|
3,871
|
|
|
$
|
15,640
|
|
|
$
|
1,170
|
|
|
$
|
3,269
|
|
Allowances for sales during 2012
|
12,240
|
|
|
854
|
|
|
68,179
|
|
|
—
|
|
|
9,914
|
|
|||||
Allowances for prior year sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Actual credits issued for prior year’s sales
|
(1,849
|
)
|
|
(3,612
|
)
|
|
(9,673
|
)
|
|
(1,170
|
)
|
|
(2,885
|
)
|
|||||
Actual credits issued for sales during 2012
|
(10,230
|
)
|
|
—
|
|
|
(59,303
|
)
|
|
—
|
|
|
(6,721
|
)
|
|||||
Balance at December 31, 2012
|
2,010
|
|
|
1,113
|
|
|
14,843
|
|
|
—
|
|
|
3,577
|
|
|||||
Allowances for sales during 2013
|
15,943
|
|
|
2,524
|
|
|
130,374
|
|
|
—
|
|
|
12,059
|
|
|||||
Allowances for prior year sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Actual credits issued for prior year’s sales
|
(1,871
|
)
|
|
(1,204
|
)
|
|
(10,244
|
)
|
|
—
|
|
|
(3,049
|
)
|
|||||
Actual credits issued for sales during 2013
|
(13,420
|
)
|
|
—
|
|
|
(109,933
|
)
|
|
—
|
|
|
(9,460
|
)
|
|||||
Balance at December 31, 2013
|
2,662
|
|
|
2,433
|
|
|
25,040
|
|
|
—
|
|
|
3,127
|
|
|||||
Allowances for sales during 2014
|
18,299
|
|
|
5,836
|
|
|
175,001
|
|
|
—
|
|
|
12,453
|
|
|||||
Allowances for prior year sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Actual credits issued for prior year’s sales
|
(2,411
|
)
|
|
(1,724
|
)
|
|
(25,888
|
)
|
|
|
|
|
(3,246
|
)
|
|||||
Actual credits issued for sales during 2014
|
(14,408
|
)
|
|
(3,196
|
)
|
|
(129,754
|
)
|
|
—
|
|
|
(11,410
|
)
|
|||||
Balance at December 31, 2014
|
$
|
4,142
|
|
|
$
|
3,349
|
|
|
$
|
44,399
|
|
|
$
|
—
|
|
|
$
|
924
|
|
Item 7A.
|
Quantitative and Qualitative Disclosure About Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13.
|
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
By:
|
/s/ Clive A. Meanwell
|
|
Clive A. Meanwell
|
|
Chairman and Chief Executive Officer
|
Signature
|
|
Title(s)
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Clive A. Meanwell
|
|
Chief Executive Officer and Chairman of the
|
|
March 2, 2015
|
Clive A. Meanwell
|
|
Board of Directors (Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Glenn P. Sblendorio
|
|
President, Chief Financial Officer and
|
|
March 2, 2015
|
Glenn P. Sblendorio
|
|
Treasurer (Principal Financial and Accounting Officer); Director
|
|
|
|
|
|
|
|
/s/ William W. Crouse
|
|
Director
|
|
March 2, 2015
|
William W. Crouse
|
|
|
|
|
|
|
|
|
|
/s/ Robert J. Hugin
|
|
Director
|
|
March 2, 2015
|
Robert J. Hugin
|
|
|
|
|
|
|
|
|
|
/s/ John C. Kelly
|
|
Director
|
|
March 2, 2015
|
John C. Kelly
|
|
|
|
|
|
|
|
|
|
/s/ Armin M. Kessler
|
|
Director
|
|
March 2, 2015
|
Armin M. Kessler
|
|
|
|
|
|
|
|
|
|
/s/ Robert G. Savage
|
|
Director
|
|
March 2, 2015
|
Robert G. Savage
|
|
|
|
|
|
|
|
|
|
/s/ Hiroaki Shigeta
|
|
Director
|
|
March 2, 2015
|
Hiroaki Shigeta
|
|
|
|
|
|
|
|
|
|
/s/ Melvin K. Spigelman
|
|
Director
|
|
March 2, 2015
|
Melvin K. Spigelman
|
|
|
|
|
|
|
|
|
|
/s/ Elizabeth H.S. Wyatt
|
|
Director
|
|
March 2, 2015
|
Elizabeth H.S. Wyatt
|
|
|
|
|
|
Page
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of The Medicines Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of The Medicines Company are being made only in accordance with authorizations of management and directors of The Medicines Company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of The Medicines Company’s assets that could have a material effect on the financial statements.
|
/s/ Clive A. Meanwell
|
|
/s/ Glenn P. Sblendorio
|
Chairman and
Chief Executive Officer
|
|
President and
Chief Financial Officer
|
|
December 31,
|
||||||
(In thousands, except share and per share amounts)
|
2014
|
|
2013
|
||||
|
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
370,741
|
|
|
$
|
376,727
|
|
Accounts receivable, net of allowances of approximately $47.0 million and $28.6 million at December 31, 2014 and 2013
|
155,691
|
|
|
101,587
|
|
||
Inventory
|
81,450
|
|
|
87,105
|
|
||
Deferred tax assets
|
33,080
|
|
|
13,431
|
|
||
Prepaid expenses and other current assets
|
16,012
|
|
|
12,591
|
|
||
Total current assets
|
656,974
|
|
|
591,441
|
|
||
Fixed assets, net
|
40,060
|
|
|
39,268
|
|
||
Intangible assets, net
|
892,659
|
|
|
836,273
|
|
||
Goodwill
|
286,532
|
|
|
257,694
|
|
||
Restricted cash
|
1,446
|
|
|
1,574
|
|
||
Other assets
|
8,034
|
|
|
15,032
|
|
||
Total assets
|
$
|
1,885,705
|
|
|
$
|
1,741,282
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
19,799
|
|
|
$
|
26,911
|
|
Accrued expenses
|
159,252
|
|
|
142,290
|
|
||
Current portion of contingent purchase price
|
210,422
|
|
|
—
|
|
||
Deferred revenue
|
14,350
|
|
|
5,052
|
|
||
Total current liabilities
|
403,823
|
|
|
174,253
|
|
||
Contingent purchase price
|
140,712
|
|
|
302,363
|
|
||
Convertible senior notes (due 2017)
|
246,676
|
|
|
236,088
|
|
||
Deferred tax liability
|
164,459
|
|
|
128,677
|
|
||
Other liabilities
|
9,944
|
|
|
7,740
|
|
||
Total liabilities
|
965,614
|
|
|
849,121
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, $1.00 par value per share, 5,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.001 par value per share, 125,000,000 shares authorized; 67,667,468 issued and 65,474,486 outstanding at December 31, 2014 and 66,590,875 issued and 64,397,893 outstanding at December 31, 2013
|
68
|
|
|
66
|
|
||
Additional paid-in capital
|
1,045,078
|
|
|
991,982
|
|
||
Treasury stock, at cost; 2,192,982 at December 31, 2014 and December 31, 2013
|
(50,000
|
)
|
|
(50,000
|
)
|
||
Accumulated deficit
|
(77,109
|
)
|
|
(44,899
|
)
|
||
Accumulated other comprehensive income (loss)
|
2,528
|
|
|
(4,652
|
)
|
||
Total The Medicines Company stockholders’ equity
|
920,565
|
|
|
892,497
|
|
||
Non-controlling interest in joint venture
|
(474
|
)
|
|
(336
|
)
|
||
Total stockholders’ equity
|
920,091
|
|
|
892,161
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,885,705
|
|
|
$
|
1,741,282
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Net revenue
|
$
|
724,408
|
|
|
$
|
687,864
|
|
|
$
|
558,588
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of revenue
|
287,630
|
|
|
262,785
|
|
|
177,339
|
|
|||
Research and development
|
159,181
|
|
|
146,930
|
|
|
126,423
|
|
|||
Selling, general and administrative
|
342,164
|
|
|
264,958
|
|
|
171,753
|
|
|||
Total operating expenses
|
788,975
|
|
|
674,673
|
|
|
475,515
|
|
|||
(Loss) income from operations
|
(64,567
|
)
|
|
13,191
|
|
|
83,073
|
|
|||
Settlement
|
25,736
|
|
|
—
|
|
|
—
|
|
|||
Co-promotion and profit share income
|
24,236
|
|
|
17,383
|
|
|
10,000
|
|
|||
Loss in equity investment
|
(1,711
|
)
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
(15,701
|
)
|
|
(15,531
|
)
|
|
(8,005
|
)
|
|||
Investment impairment
|
(7,500
|
)
|
|
—
|
|
|
—
|
|
|||
Other income
|
322
|
|
|
1,577
|
|
|
1,140
|
|
|||
(Loss) income before income taxes
|
(39,185
|
)
|
|
16,620
|
|
|
86,208
|
|
|||
Benefit (provision) for income taxes
|
6,837
|
|
|
(1,360
|
)
|
|
(35,038
|
)
|
|||
(Loss) net income
|
(32,348
|
)
|
|
15,260
|
|
|
51,170
|
|
|||
Net loss attributable to non-controlling interest
|
138
|
|
|
252
|
|
|
84
|
|
|||
Net (loss) income attributable to The Medicines Company
|
$
|
(32,210
|
)
|
|
$
|
15,512
|
|
|
$
|
51,254
|
|
Earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.50
|
)
|
|
$
|
0.27
|
|
|
$
|
0.96
|
|
Diluted
|
$
|
(0.50
|
)
|
|
$
|
0.25
|
|
|
$
|
0.93
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|||
Basic
|
64,473
|
|
|
58,096
|
|
|
53,545
|
|
|||
Diluted
|
64,473
|
|
|
62,652
|
|
|
55,346
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net (loss) income
|
$
|
(32,348
|
)
|
|
$
|
15,260
|
|
|
$
|
51,170
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Unrealized (loss) gain on available for sale securities
|
|
|
|
(10
|
)
|
|
6
|
|
|||
Foreign currency translation adjustment
|
7,180
|
|
|
(3,876
|
)
|
|
(224
|
)
|
|||
Other comprehensive income (loss)
|
7,180
|
|
|
(3,886
|
)
|
|
(218
|
)
|
|||
Comprehensive (loss) income
|
$
|
(25,168
|
)
|
|
$
|
11,374
|
|
|
$
|
50,952
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
Accumulated
Comprehensive
|
|
Non-controlling
|
|
Total
|
||||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
Paid-in
|
|
Accumulated
|
|
(Loss)
|
|
Interest
|
|
Stockholders’
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Income
|
|
in JV
|
|
Equity
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||
Balance at January 1, 2012
|
54,312
|
|
|
$
|
54
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
623,801
|
|
|
$
|
(111,665
|
)
|
|
$
|
(548
|
)
|
|
$
|
—
|
|
|
$
|
511,642
|
|
Employee stock purchases
|
1,488
|
|
|
2
|
|
|
|
|
|
|
22,930
|
|
|
|
|
|
|
|
|
|
|
22,932
|
|
||||||||||
Issuance of restricted stock awards
|
352
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||
Non-cash stock compensation
|
|
|
|
|
|
|
|
|
|
|
14,981
|
|
|
|
|
|
|
|
|
|
|
14,981
|
|
||||||||||
Excess tax benefit from share-based compensation arrangements
|
|
|
|
|
|
|
|
|
|
|
1,558
|
|
|
|
|
|
|
|
|
|
|
1,558
|
|
||||||||||
Equity component of the convertible notes, issuance, net
|
|
|
|
|
|
|
|
|
55,685
|
|
|
|
|
|
|
|
|
55,685
|
|
||||||||||||||
Purchase of convertible note hedges
|
|
|
|
|
|
|
|
|
(58,223
|
)
|
|
|
|
|
|
|
|
(58,223
|
)
|
||||||||||||||
Sale of warrants
|
|
|
|
|
|
|
|
|
38,425
|
|
|
|
|
|
|
|
|
38,425
|
|
||||||||||||||
Purchase of treasury stock
|
|
|
|
|
(2,193
|
)
|
|
(50,000
|
)
|
|
|
|
|
|
|
|
|
|
(50,000
|
)
|
|||||||||||||
Debt issuance costs
|
|
|
|
|
|
|
|
|
(1,730
|
)
|
|
|
|
|
|
|
|
(1,730
|
)
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,254
|
|
|
|
|
|
(84
|
)
|
|
51,170
|
|
|||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(224
|
)
|
|
|
|
(224
|
)
|
||||||||||
Unrealized loss on available for sale securities (net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
6
|
|
||||||||||
Balance at December 31, 2012
|
56,152
|
|
|
$
|
56
|
|
|
(2,193
|
)
|
|
$
|
(50,000
|
)
|
|
$
|
697,427
|
|
|
$
|
(60,411
|
)
|
|
$
|
(766
|
)
|
|
$
|
(84
|
)
|
|
$
|
586,222
|
|
Employee stock purchases
|
3,547
|
|
|
4
|
|
|
|
|
|
|
74,209
|
|
|
|
|
|
|
|
|
|
|
74,213
|
|
||||||||||
Issuance of restricted stock awards
|
237
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||
Issuance of common stock
|
6,653
|
|
|
6
|
|
|
|
|
|
|
189,593
|
|
|
|
|
|
|
|
|
189,599
|
|
||||||||||||
Non-cash stock compensation
|
|
|
|
|
|
|
|
|
|
|
23,078
|
|
|
|
|
|
|
|
|
|
|
23,078
|
|
||||||||||
Excess tax benefit from share-based compensation arrangements
|
|
|
|
|
|
|
|
|
|
|
7,675
|
|
|
|
|
|
|
|
|
|
|
7,675
|
|
||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,512
|
|
|
|
|
|
(252
|
)
|
|
15,260
|
|
|||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,876
|
)
|
|
|
|
(3,876
|
)
|
||||||||||
Unrealized loss on available for sale securities (net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
(10
|
)
|
||||||||||
Balance at December 31, 2013
|
66,589
|
|
|
$
|
66
|
|
|
(2,193
|
)
|
|
$
|
(50,000
|
)
|
|
$
|
991,982
|
|
|
$
|
(44,899
|
)
|
|
$
|
(4,652
|
)
|
|
$
|
(336
|
)
|
|
$
|
892,161
|
|
Employee stock purchases
|
864
|
|
|
1
|
|
|
|
|
|
|
17,342
|
|
|
|
|
|
|
|
|
|
|
17,343
|
|
||||||||||
Issuance of restricted stock awards
|
214
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
||||||||||
Non-cash stock compensation
|
|
|
|
|
|
|
|
|
|
34,311
|
|
|
|
|
|
|
|
|
|
|
34,311
|
|
|||||||||||
Excess tax benefit from share-based compensation arrangements
|
|
|
|
|
|
|
|
|
|
|
1,443
|
|
|
|
|
|
|
|
|
|
|
1,443
|
|
||||||||||
Net (loss) income attributable to The Medicines Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(32,210
|
)
|
|
|
|
|
(138
|
)
|
|
(32,348
|
)
|
|||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,180
|
|
|
|
|
7,180
|
|
||||||||||
Balance at December 31, 2014
|
67,667
|
|
|
$
|
68
|
|
|
(2,193
|
)
|
|
$
|
(50,000
|
)
|
|
$
|
1,045,078
|
|
|
$
|
(77,109
|
)
|
|
$
|
2,528
|
|
|
$
|
(474
|
)
|
|
$
|
920,091
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net (loss) income attributable to The Medicines Company
|
$
|
(32,348
|
)
|
|
$
|
15,260
|
|
|
$
|
51,170
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
34,398
|
|
|
32,238
|
|
|
7,270
|
|
|||
Impairment charges
|
31,133
|
|
|
—
|
|
|
—
|
|
|||
Amortization of net premiums and discounts on available for sale securities
|
—
|
|
|
209
|
|
|
734
|
|
|||
Amortization of long term debt financing costs
|
1,332
|
|
|
1,179
|
|
|
598
|
|
|||
Amortization of debt discount
|
10,588
|
|
|
9,978
|
|
|
5,306
|
|
|||
Unrealized foreign currency transaction (gains) losses, net
|
(833
|
)
|
|
143
|
|
|
(573
|
)
|
|||
Non-cash stock compensation expense
|
34,311
|
|
|
23,078
|
|
|
14,981
|
|
|||
Loss on disposal of fixed assets
|
35
|
|
|
39
|
|
|
69
|
|
|||
Deferred tax provision (benefit)
|
(5,565
|
)
|
|
(10,272
|
)
|
|
30,376
|
|
|||
Excess tax benefit from share-based compensation arrangements
|
(1,443
|
)
|
|
(7,675
|
)
|
|
(1,558
|
)
|
|||
Change in contingent consideration obligation
|
20,823
|
|
|
16,942
|
|
|
(1,460
|
)
|
|||
Loss in equity method investment
|
1,711
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Accrued interest receivable
|
1
|
|
|
347
|
|
|
26
|
|
|||
Accounts receivable
|
(54,739
|
)
|
|
(15,017
|
)
|
|
(11,120
|
)
|
|||
Inventory
|
5,627
|
|
|
(10,130
|
)
|
|
(31,152
|
)
|
|||
Prepaid expenses and other current assets
|
(3,560
|
)
|
|
39
|
|
|
1,516
|
|
|||
Accounts payable
|
(6,866
|
)
|
|
(1,319
|
)
|
|
18,903
|
|
|||
Accrued expenses
|
24,058
|
|
|
31,192
|
|
|
(40,160
|
)
|
|||
Deferred revenue
|
5,257
|
|
|
3,854
|
|
|
1,685
|
|
|||
Other liabilities
|
3,394
|
|
|
1,335
|
|
|
(265
|
)
|
|||
Net cash provided by operating activities
|
67,314
|
|
|
91,420
|
|
|
46,346
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Purchases of available for sale securities
|
—
|
|
|
—
|
|
|
(65,354
|
)
|
|||
Proceeds from maturities and sales of available for sale securities
|
—
|
|
|
50,656
|
|
|
38,881
|
|
|||
Purchases of fixed assets
|
(7,289
|
)
|
|
(13,574
|
)
|
|
(1,005
|
)
|
|||
Payments for intangible assets
|
(15,000
|
)
|
|
—
|
|
|
(36,678
|
)
|
|||
Other investments
|
(3,625
|
)
|
|
1,125
|
|
|
(2,500
|
)
|
|||
Cash used for acquisitions, net
|
(58,934
|
)
|
|
(542,579
|
)
|
|
—
|
|
|||
Decrease in restricted cash
|
92
|
|
|
11
|
|
|
3,148
|
|
|||
Net cash used in investing activities
|
(84,756
|
)
|
|
(504,361
|
)
|
|
(63,508
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuances of common stock
|
17,343
|
|
|
74,212
|
|
|
22,935
|
|
|||
Proceeds from equity offering, net
|
—
|
|
|
189,600
|
|
|
—
|
|
|||
Milestone payments to Rempex shareholders
|
(9,953
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(50,000
|
)
|
|||
Proceeds from the issuance of convertible senior notes
|
—
|
|
|
—
|
|
|
275,000
|
|
|||
Proceeds from issuance of warrants
|
—
|
|
|
—
|
|
|
38,425
|
|
|||
Purchase of convertible note hedge
|
—
|
|
|
—
|
|
|
(58,223
|
)
|
|||
Debt issuance costs
|
—
|
|
|
—
|
|
|
(8,774
|
)
|
|||
Excess tax benefit from share-based compensation arrangements
|
1,443
|
|
|
7,675
|
|
|
1,558
|
|
|||
Net cash provided by financing activities
|
8,833
|
|
|
271,487
|
|
|
220,921
|
|
|||
Effect of exchange rate changes on cash
|
2,623
|
|
|
(1,265
|
)
|
|
305
|
|
|||
(Decrease) increase in cash and cash equivalents
|
(5,986
|
)
|
|
(142,719
|
)
|
|
204,064
|
|
|||
Cash and cash equivalents at beginning of period
|
376,727
|
|
|
519,446
|
|
|
315,382
|
|
|||
Cash and cash equivalents at end of period
|
$
|
370,741
|
|
|
$
|
376,727
|
|
|
$
|
519,446
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Taxes paid
|
$
|
1,371
|
|
|
$
|
9,137
|
|
|
$
|
1,709
|
|
Interest paid
|
$
|
3,782
|
|
|
$
|
4,374
|
|
|
$
|
1,786
|
|
•
|
Product returns.
The Company’s customers have the right to return any unopened product during the
18
-month period beginning
six
months prior to the labeled expiration date and ending
12
months after the labeled expiration date. As a result, in calculating the accrual for product returns, the Company must estimate the likelihood that product sold might not be used within
six
months of expiration and analyze the likelihood that such product will be returned within
12
months after expiration. The Company considers all of these factors and adjusts the accrual periodically throughout each quarter to reflect actual experience. When customers return product, they are generally given credit against amounts owed. The amount credited is charged to the Company’s product returns accrual.
|
•
|
Chargebacks and rebates.
Although the Company primarily sells products to ICS in the United States, the Company typically enters into agreements with hospitals, either directly or through group purchasing organizations acting on behalf of their hospital members, in connection with the hospitals’ purchases of products.
|
•
|
Fees-for-service.
The Company offers discounts to certain wholesalers and ICS based on contractually determined rates for certain services. The Company estimates its fee-for-service accruals and allowances based on historical sales, wholesaler and distributor inventory levels and the applicable discount rate. The Company’s discounts are accrued at the time of the sale and are typically settled with the wholesalers or ICS within
60
days after the end of each respective quarter. The Company’s fee-for-service accruals and allowances were
$0.9 million
and
$3.1 million
at
December 31, 2014
and
December 31, 2013
, respectively.
|
|
Cash
Discounts
|
|
Returns
|
|
Chargebacks
|
|
Rebates
|
|
Fees-for-
Service
|
||||||||||
Balance at January 1, 2012
|
$
|
1,849
|
|
|
$
|
3,871
|
|
|
$
|
15,640
|
|
|
$
|
1,170
|
|
|
$
|
3,269
|
|
Allowances for sales during 2012
|
12,240
|
|
|
854
|
|
|
68,179
|
|
|
—
|
|
|
9,914
|
|
|||||
Allowances for prior year sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Actual credits issued for prior year’s sales
|
(1,849
|
)
|
|
(3,612
|
)
|
|
(9,673
|
)
|
|
(1,170
|
)
|
|
(2,885
|
)
|
|||||
Actual credits issued for sales during 2012
|
(10,230
|
)
|
|
—
|
|
|
(59,303
|
)
|
|
—
|
|
|
(6,721
|
)
|
|||||
Balance at December 31, 2012
|
2,010
|
|
|
1,113
|
|
|
14,843
|
|
|
—
|
|
|
3,577
|
|
|||||
Allowances for sales during 2013
|
15,943
|
|
|
2,524
|
|
|
130,374
|
|
|
—
|
|
|
12,059
|
|
|||||
Allowances for prior year sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Actual credits issued for prior year’s sales
|
(1,871
|
)
|
|
(1,204
|
)
|
|
(10,244
|
)
|
|
—
|
|
|
(3,049
|
)
|
|||||
Actual credits issued for sales during 2013
|
(13,420
|
)
|
|
—
|
|
|
(109,933
|
)
|
|
—
|
|
|
(9,460
|
)
|
|||||
Balance at December 31, 2013
|
2,662
|
|
|
2,433
|
|
|
25,040
|
|
|
—
|
|
|
3,127
|
|
|||||
Allowances for sales during 2014
|
18,299
|
|
|
5,836
|
|
|
175,001
|
|
|
—
|
|
|
12,453
|
|
|||||
Allowances for prior year sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Actual credits issued for prior year’s sales
|
(2,411
|
)
|
|
(1,724
|
)
|
|
(25,888
|
)
|
|
|
|
|
(3,246
|
)
|
|||||
Actual credits issued for sales during 2014
|
(14,408
|
)
|
|
(3,196
|
)
|
|
(129,754
|
)
|
|
—
|
|
|
(11,410
|
)
|
|||||
Balance at December 31, 2014
|
$
|
4,142
|
|
|
$
|
3,349
|
|
|
$
|
44,399
|
|
|
$
|
—
|
|
|
$
|
924
|
|
Inventory
|
|
2014
|
|
2013
|
||||
|
|
(In thousands)
|
||||||
Raw materials
|
|
$
|
40,533
|
|
|
$
|
42,402
|
|
Work-in-progress
|
|
34,095
|
|
|
27,911
|
|
||
Finished goods
|
|
6,822
|
|
|
16,792
|
|
||
Total
|
|
$
|
81,450
|
|
|
$
|
87,105
|
|
|
Estimated
|
|
December 31,
|
||||||
|
Life (Years)
|
|
2014
|
|
2013
|
||||
|
|
|
(In thousands)
|
||||||
Furniture, fixtures and equipment
|
3-7
|
|
$
|
26,895
|
|
|
$
|
23,267
|
|
Computer software
|
3
|
|
3,777
|
|
|
2,237
|
|
||
Computer hardware
|
3
|
|
4,798
|
|
|
3,469
|
|
||
Leasehold improvements
|
5-15
|
|
31,426
|
|
|
31,735
|
|
||
|
|
|
66,896
|
|
|
60,708
|
|
||
Less: Accumulated depreciation
|
|
|
(26,836
|
)
|
|
(21,440
|
)
|
||
|
|
|
$
|
40,060
|
|
|
$
|
39,268
|
|
5.
|
Cash, Cash Equivalents and Restricted Cash
|
6.
|
Non Marketable Investments
|
7.
|
Acquisitions
|
|
|
|
||
Assets Acquired:
|
|
(in thousands)
|
||
Cash and cash equivalents
|
|
$
|
1,563
|
|
Prepaid expenses and other current assets
|
|
624
|
|
|
Fixed assets, net
|
|
12,577
|
|
|
In-process research and development
|
|
250,000
|
|
|
Goodwill
|
|
102,613
|
|
|
Other assets
|
|
34
|
|
|
Total Assets
|
|
$
|
367,411
|
|
Liabilities Assumed:
|
|
|
||
Accrued expenses
|
|
$
|
1,413
|
|
Contingent purchase price
|
|
87,200
|
|
|
Deferred tax liabilities
|
|
92,099
|
|
|
Total Liabilities
|
|
$
|
180,712
|
|
|
|
|
||
Total cash price paid upon acquisition
|
|
$
|
186,699
|
|
•
|
a multiple of average net sales over each of the
two
12
-month periods preceding the closing of the purchase (unless the purchase closing occurs less than
24
months after February 8, 2013, in which case the measurement period would be the
12
-month period preceding the purchase closing); or
|
•
|
if BMS has delivered a valid notice terminating the collaboration term early as a result of a material breach by the Company under the master transaction agreement, the amount described above plus an amount intended to give BMS the economic benefit of having received royalty fees for a
24
-month collaboration term.
|
|
|
|
||
Assets Acquired:
|
|
(in thousands)
|
||
Product license
|
|
$
|
32,000
|
|
Option
|
|
62,000
|
|
|
Goodwill
|
|
21,000
|
|
|
Total Assets
|
|
$
|
115,000
|
|
Total cash price paid upon acquisition
|
|
$
|
115,000
|
|
|
|
|
|
|
|
||
Assets Acquired:
|
|
(in thousands)
|
||
Cash
|
|
$
|
7,880
|
|
Prepaid assets
|
|
528
|
|
|
Fixed assets, net
|
|
124
|
|
|
In-process research and development
|
|
176,000
|
|
|
Goodwill
|
|
52,037
|
|
|
Total Assets
|
|
$
|
236,569
|
|
Liabilities Assumed:
|
|
|
||
Accounts payable
|
|
$
|
1,074
|
|
Accrued expenses
|
|
3,544
|
|
|
Contingent purchase price
|
|
82,550
|
|
|
Deferred tax liabilities
|
|
44,006
|
|
|
Total Liabilities
|
|
$
|
131,174
|
|
|
|
|
||
Total cash price paid upon acquisition
|
|
$
|
105,395
|
|
|
|
|
||
Assets Acquired:
|
|
(In thousands)
|
||
Cash and cash equivalents
|
|
$
|
4,218
|
|
Accounts receivable, net
|
|
399
|
|
|
Inventory
|
|
566
|
|
|
Prepaid expenses and other current assets
|
|
2,465
|
|
|
Fixed assets, net
|
|
331
|
|
|
Intangible assets
|
|
530
|
|
|
In-process research and development
|
|
224,680
|
|
|
Goodwill
|
|
68,632
|
|
|
Total Assets
|
|
301,821
|
|
|
Liabilities Assumed:
|
|
|
||
Accounts payable
|
|
1,413
|
|
|
Accrued expenses
|
|
5,867
|
|
|
Deferred tax liabilities
|
|
57,590
|
|
|
Total Liabilities
|
|
64,870
|
|
|
|
|
|
||
Total purchase price
|
|
$
|
236,951
|
|
|
|
|
Assets Acquired:
|
|
|
(In thousands)
|
||
|
|
|
|
||
Cash and cash equivalents
|
|
|
$
|
914
|
|
Inventory
|
|
|
307
|
|
|
Developed product rights
|
|
|
93,900
|
|
|
Goodwill
|
|
|
25,063
|
|
|
Other assets
|
|
|
131
|
|
|
Total assets
|
|
|
$
|
120,315
|
|
|
|
|
|
||
Liabilities assumed:
|
|
|
|
||
|
|
|
|
||
Accounts payable
|
|
|
161
|
|
|
Contingent purchase price
|
|
|
37,900
|
|
|
Deferred tax liability
|
|
|
23,160
|
|
|
Other liabilities
|
|
|
223
|
|
|
Total liabilities
|
|
|
$
|
61,444
|
|
|
|
|
|
||
Total cash price paid upon acquisition
|
|
|
$
|
58,871
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Year Ended December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(in thousands, except per share amounts)
|
||||||
Net revenue
|
|
$
|
724,599
|
|
|
$
|
695,473
|
|
Net loss
|
|
$
|
(35,023
|
)
|
|
$
|
(32,743
|
)
|
Basic loss per common share
|
|
$
|
(0.54
|
)
|
|
$
|
(0.56
|
)
|
Diluted loss per common share
|
|
$
|
(0.54
|
)
|
|
$
|
(0.56
|
)
|
8.
|
Intangible Assets and Goodwill
|
|
|
|
As of December 31, 2014
|
|
As of December 31, 2013
|
|||||||||||||||||||||
|
Weighted
Average Remaining
Useful Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization and other charges
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||||
Amortizable intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Customer relationships
(1)
|
—
|
|
|
$
|
7,457
|
|
|
$
|
(7,457
|
)
|
|
$
|
—
|
|
|
$
|
7,457
|
|
|
$
|
(5,631
|
)
|
|
$
|
1,826
|
|
Selling rights agreements
(1)
|
0.1
|
|
|
9,125
|
|
|
(8,961
|
)
|
|
164
|
|
|
9,125
|
|
|
(5,870
|
)
|
|
3,255
|
|
||||||
Trademarks
(1)
|
—
|
|
|
3,024
|
|
|
(3,024
|
)
|
|
—
|
|
|
3,024
|
|
|
(2,284
|
)
|
|
740
|
|
||||||
Product licenses
(2)
|
0.5
|
|
|
71,000
|
|
|
(65,602
|
)
|
|
5,398
|
|
|
71,530
|
|
|
(25,067
|
)
|
|
46,463
|
|
||||||
Developed product rights
(3)
|
11.9
|
|
|
180,930
|
|
|
(6,513
|
)
|
|
174,417
|
|
|
2,000
|
|
|
(191
|
)
|
|
1,809
|
|
||||||
Total
|
12.5
|
|
|
$
|
271,536
|
|
|
$
|
(91,557
|
)
|
|
$
|
179,979
|
|
|
$
|
93,136
|
|
|
$
|
(39,043
|
)
|
|
$
|
54,093
|
|
(1)
|
The Company amortizes intangible assets related to Angiox through the end of its patent life.
|
(2)
|
The Company amortizes intangible assets related to the product licenses over their expected useful lives.
|
(3)
|
The Company amortizes intangible assets related to developed product rights over the remaining life of the patents.
|
|
As of December 31, 2014
|
|
As of December 31, 2013
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Adjustments
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Adjustments
|
|
Net
Carrying
Amount
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
In-process research and development
|
$
|
650,680
|
|
|
$
|
—
|
|
|
$
|
650,680
|
|
|
720,180
|
|
|
$
|
—
|
|
|
$
|
720,180
|
|
|
Recothrom option
|
62,000
|
|
|
—
|
|
|
62,000
|
|
|
62,000
|
|
|
—
|
|
|
62,000
|
|
||||||
Total
|
$
|
712,680
|
|
|
$
|
—
|
|
|
$
|
712,680
|
|
|
$
|
782,180
|
|
|
$
|
—
|
|
|
$
|
782,180
|
|
|
December 31,
2014 |
|
December 31,
2013 |
||||
|
(In thousands)
|
||||||
Balance at beginning of period
|
$
|
257,694
|
|
|
$
|
14,671
|
|
Goodwill resulting from the acquisition of Tenaxis
|
25,063
|
|
|
—
|
|
||
Goodwill resulting from the acquisition of Incline
|
—
|
|
|
102,613
|
|
||
Goodwill resulting from the acquisition of Recothrom
|
—
|
|
|
21,000
|
|
||
Goodwill resulting from the acquisition of ProFibrix
|
—
|
|
|
52,037
|
|
||
Goodwill resulting from the acquisition of Rempex
|
—
|
|
|
68,632
|
|
||
Translation adjustments
|
3,775
|
|
|
(1,259
|
)
|
||
Balance at end of period
|
$
|
286,532
|
|
|
$
|
257,694
|
|
9.
|
Accrued Expenses
|
|
2014
|
|
2013
|
||||
|
(In thousands)
|
||||||
Royalties
|
$
|
26,821
|
|
|
$
|
44,260
|
|
Research and development services
|
29,726
|
|
|
14,846
|
|
||
Compensation related
|
43,992
|
|
|
35,492
|
|
||
Product returns, rebates and other fees
|
6,495
|
|
|
5,699
|
|
||
Legal, accounting and other
|
14,045
|
|
|
14,487
|
|
||
Manufacturing, logistics and related fees
|
30,919
|
|
|
23,722
|
|
||
Sales and marketing
|
6,939
|
|
|
3,469
|
|
||
Interest
|
315
|
|
|
315
|
|
||
|
$
|
159,252
|
|
|
$
|
142,290
|
|
10.
|
Convertible Senior Notes
|
•
|
during any calendar quarter commencing on or after
September 1, 2012
(and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price (described below) on each applicable trading day;
|
•
|
during the five business day period after any
five
consecutive trading day period (the Measurement Period) in which the trading price (as defined in the Indenture) per
$1,000
principal amount of Notes for each trading day of the Measurement Period was less than
98%
of the product of the last reported sale price of the Company's common stock and the conversion rate on each such trading day; or
|
•
|
upon the occurrence of specified corporate events, including a merger or a sale of all or substantially all of the Company's assets.
|
Liability component
|
|
December 31,
2014 |
|
December 31,
2013 |
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
275,000
|
|
|
$
|
275,000
|
|
Less: Debt discount, net
(1)
|
|
(28,324
|
)
|
|
(38,912
|
)
|
||
Net carrying amount
|
|
$
|
246,676
|
|
|
$
|
236,088
|
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(in thousands)
|
||||||||||
Contractual interest expense
|
$
|
3,781
|
|
|
$
|
3,781
|
|
|
$
|
2,101
|
|
Amortization of debt issuance costs
|
1,332
|
|
|
1,179
|
|
|
598
|
|
|||
Amortization of debt discount
|
10,588
|
|
|
9,978
|
|
|
5,306
|
|
|||
|
$
|
15,701
|
|
|
$
|
14,938
|
|
|
$
|
8,005
|
|
|
|
|
|
|
|
||||||
Effective interest rate of the liability component
|
6.02
|
%
|
|
6.02
|
%
|
|
6.02
|
%
|
11.
|
Stockholders’ Equity
|
12.
|
Share-Based Compensation
|
•
|
the 2013 Stock Incentive Plan (the 2013 Plan),
|
•
|
the 2009 Equity Inducement Plan (the 2009 Plan),
|
•
|
the 2007 Equity Inducement Plan (the 2007 Plan),
|
•
|
the 2004 Stock Incentive Plan (the 2004 Plan),
|
•
|
the 2001 Non-Officer, Non-Director Stock Incentive Plan (the 2001 Plan),
|
•
|
the 2000 Outside Director Stock Option Plan (the 2000 Director Plan), and
|
•
|
the 1998 Stock Incentive Plan (the 1998 Plan).
|
•
|
$320 thousand
value of options on the date of his or her initial election to the Board of Directors (the Initial Options); and
|
•
|
$215 thousand
equity value split equally between stock options and restricted shares on the date of each annual meeting of the Company’s stockholders (the Annual Options), except if such non-employee director was initially elected to the Board of Directors at such annual meeting. The lead director will be granted an additional option to purchase
5,000
shares of the common stock on the date of each annual meeting of the Company’s stockholders.
|
|
Number of Shares
|
|
Weighted-Average
Exercise Price
Per Share
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic Value
|
|||||
Outstanding, January 1, 2012
|
9,136,677
|
|
|
18.51
|
|
|
|
|
|
|
||
Granted
|
1,619,702
|
|
|
17.04
|
|
|
|
|
|
|
||
Exercised
|
(1,342,739
|
)
|
|
11.04
|
|
|
|
|
|
|
||
Forfeited and expired
|
(301,608
|
)
|
|
17.3
|
|
|
|
|
|
|
||
Outstanding, December 31, 2012
|
9,112,032
|
|
|
18.61
|
|
|
|
|
|
|
||
Granted
|
2,263,649
|
|
|
32.2
|
|
|
|
|
|
|
||
Exercised
|
(3,425,586
|
)
|
|
20.79
|
|
|
|
|
|
|
||
Forfeited and expired
|
(333,691
|
)
|
|
23.29
|
|
|
|
|
|
|
||
Outstanding, December 31, 2013
|
7,616,404
|
|
|
$
|
22.83
|
|
|
|
|
|
|
|
Granted
|
2,825,451
|
|
|
27.8
|
|
|
|
|
|
|
||
Exercised
|
(708,590
|
)
|
|
19.25
|
|
|
|
|
|
|
||
Forfeited and expired
|
(748,502
|
)
|
|
30.12
|
|
|
|
|
|
|
||
Outstanding, December 31, 2014
|
8,984,763
|
|
|
$
|
24.07
|
|
|
6.48
|
|
$
|
45,251,635
|
|
Vested and expected to vest, December 31, 2014
|
8,670,134
|
|
|
$
|
23.92
|
|
|
6.39
|
|
$
|
44,766,760
|
|
Exercisable, December 31, 2014
|
5,207,526
|
|
|
$
|
21.15
|
|
|
4.84
|
|
$
|
38,634,832
|
|
Available for future grant at December 31, 2014
|
2,656,366
|
|
|
|
|
|
|
|
|
|
|
Years Ended
December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected stock price volatility
|
50.25
|
%
|
|
48.3
|
%
|
|
46.5
|
%
|
Risk-free interest rate
|
1.543
|
%
|
|
1.079
|
%
|
|
0.825
|
%
|
Expected option term (years)
|
4.96
|
|
|
5.07
|
|
|
4.95
|
|
|
Years Ended
December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected stock price volatility
|
38.97
|
%
|
|
32.46
|
%
|
|
36.25
|
%
|
Risk-free interest rate
|
0.07
|
%
|
|
0.09
|
%
|
|
14
|
%
|
Expected option term (years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
Number of
Shares
|
|
Weighted Average
Grant-Date
Fair Value
|
|||
Outstanding, January 1, 2012
|
449,261
|
|
|
$
|
14.70
|
|
Awarded
|
369,158
|
|
|
21.89
|
|
|
Vested
|
(188,541
|
)
|
|
15.03
|
|
|
Forfeited
|
(16,767
|
)
|
|
14.49
|
|
|
Outstanding, December 31, 2012
|
613,111
|
|
|
18.93
|
|
|
Awarded
|
266,388
|
|
|
31.80
|
|
|
Vested
|
(247,945
|
)
|
|
17.61
|
|
|
Forfeited
|
(28,975
|
)
|
|
22.88
|
|
|
Outstanding, December 31, 2013
|
602,579
|
|
|
24.97
|
|
|
Awarded
|
306,161
|
|
|
29.84
|
|
|
Vested
|
(238,028
|
)
|
|
23.69
|
|
|
Forfeited
|
(94,025
|
)
|
|
28.59
|
|
|
Outstanding, December 31, 2014
|
576,687
|
|
|
$
|
27.50
|
|
13.
|
Earnings per Share
|
|
Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Basic and diluted
|
|
|
|
|
|
|
|
|
|||
Net income attributable to The Medicines Company
|
$
|
(32,210
|
)
|
|
$
|
15,512
|
|
|
$
|
51,254
|
|
|
|
|
|
|
|
||||||
Net weighted average common shares outstanding, basic
|
64,473
|
|
|
58,096
|
|
|
53,545
|
|
|||
Plus: net effect of dilutive stock options, warrants, restricted common shares and shares issuable upon conversion of Notes
|
—
|
|
|
4,556
|
|
|
1,801
|
|
|||
Weighted average common shares outstanding, diluted
|
64,473
|
|
|
62,652
|
|
|
55,346
|
|
|||
Income per common share attributable to The Medicines Company, basic
|
$
|
(0.50
|
)
|
|
$
|
0.27
|
|
|
$
|
0.96
|
|
Income per common share attributable to The Medicines Company, diluted
|
$
|
(0.50
|
)
|
|
$
|
0.25
|
|
|
$
|
0.93
|
|
14.
|
Income Taxes
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Current:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
1,388
|
|
|
$
|
(8,889
|
)
|
|
$
|
(2,492
|
)
|
State
|
(160
|
)
|
|
(287
|
)
|
|
(1,309
|
)
|
|||
Foreign
|
44
|
|
|
(2,456
|
)
|
|
(863
|
)
|
|||
|
1,272
|
|
|
(11,632
|
)
|
|
(4,664
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
5,357
|
|
|
(10,726
|
)
|
|
(26,388
|
)
|
|||
State
|
208
|
|
|
20,999
|
|
|
(3,920
|
)
|
|||
Foreign
|
—
|
|
|
(1
|
)
|
|
(66
|
)
|
|||
|
5,565
|
|
|
10,272
|
|
|
(30,374
|
)
|
|||
Total benefit from (provision for) income taxes
|
$
|
6,837
|
|
|
$
|
(1,360
|
)
|
|
$
|
(35,038
|
)
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Domestic
|
$
|
(19,730
|
)
|
|
$
|
17,516
|
|
|
$
|
92,998
|
|
International
|
(19,318
|
)
|
|
(644
|
)
|
|
(6,790
|
)
|
|||
Total
|
$
|
(39,048
|
)
|
|
$
|
16,872
|
|
|
$
|
86,208
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(In thousands)
|
||||||||||
Statutory rate applied to pre-tax income
|
$
|
(13,667
|
)
|
|
$
|
5,905
|
|
|
$
|
30,202
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|||
State income taxes, net of federal benefit
|
(31
|
)
|
|
(13,463
|
)
|
|
3,399
|
|
|||
Foreign
|
6,946
|
|
|
1,854
|
|
|
2,136
|
|
|||
Revaluation of contingent purchase price
|
3,742
|
|
|
5,930
|
|
|
(511
|
)
|
|||
Tax credits
|
(2,598
|
)
|
|
(6,052
|
)
|
|
(1,712
|
)
|
|||
Lobbying costs
|
60
|
|
|
—
|
|
|
171
|
|
|||
Acquisition costs
|
198
|
|
|
3,024
|
|
|
—
|
|
|||
Meals and entertainment
|
502
|
|
|
468
|
|
|
386
|
|
|||
Uncertain tax positions
|
(101
|
)
|
|
2,574
|
|
|
542
|
|
|||
Other
|
1,461
|
|
|
1,120
|
|
|
425
|
|
|||
Deferred Tax Asset Adjustment
|
(3,349
|
)
|
|
—
|
|
|
—
|
|
|||
Income tax provision (benefit)
|
$
|
(6,837
|
)
|
|
$
|
1,360
|
|
|
$
|
35,038
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(In thousands)
|
||||||
Deferred tax assets:
|
|
|
|
|
|
||
Net operating loss carryforwards
|
$
|
81,603
|
|
|
$
|
49,451
|
|
Tax credits
|
17,451
|
|
|
13,279
|
|
||
Intangible assets
|
7,828
|
|
|
29,370
|
|
||
Stock based compensation
|
22,427
|
|
|
16,371
|
|
||
Other
|
20,103
|
|
|
16,174
|
|
||
Total deferred tax assets
|
149,412
|
|
|
124,645
|
|
||
Valuation allowance
|
(43,874
|
)
|
|
(4,186
|
)
|
||
Total deferred tax assets net of valuation allowance
|
105,538
|
|
|
120,459
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Fixed assets
|
$
|
(5,099
|
)
|
|
$
|
(4,044
|
)
|
Indefinite lived intangible assets
|
(231,818
|
)
|
|
(231,662
|
)
|
||
Total deferred tax liabilities
|
(236,917
|
)
|
|
(235,706
|
)
|
||
Net deferred tax liabilities
|
$
|
(131,379
|
)
|
|
$
|
(115,247
|
)
|
|
|
Federal Net
Operating Loss
|
|
Federal Research
and Development
Tax Credit
|
||||
Year of Expiration
|
|
Carryforwards
|
|
Carryforwards
|
||||
|
|
(In thousands)
|
||||||
2018-2024
|
|
$
|
—
|
|
|
$
|
—
|
|
2027
|
|
6,256
|
|
|
840
|
|
||
2028
|
|
40,193
|
|
|
2,108
|
|
||
2029
|
|
9,742
|
|
|
1,148
|
|
||
2030
|
|
5,281
|
|
|
1,162
|
|
||
2031
|
|
3,292
|
|
|
3,097
|
|
||
2032
|
|
2,917
|
|
|
3,622
|
|
||
2033
|
|
38,155
|
|
|
3,239
|
|
||
2034
|
|
4,449
|
|
|
3,000
|
|
||
|
|
$
|
110,285
|
|
|
$
|
18,216
|
|
|
Gross
|
||
|
Unrecognized
|
||
|
Tax Benefits
|
||
|
(In thousands)
|
||
Balance at January 1, 2013
|
$
|
2,433
|
|
Additions related to current year tax positions
|
600
|
|
|
Additions for prior year tax positions
|
5,090
|
|
|
Balance at December 31, 2013
|
8,123
|
|
|
Additions related to current year tax positions
|
519
|
|
|
Additions for prior year tax positions
|
818
|
|
|
Reductions for prior year tax positions
|
(621
|
)
|
|
Balance at December 31, 2014
|
$
|
8,839
|
|
15.
|
Fair Value Measurements
|
Level 1
|
|
Quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets and liabilities consist of money market investments and U.S. treasury notes.
|
Level 2
|
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company’s Level 2 assets and liabilities consist of U.S. government agency notes and corporate debt securities. Fair values are determined by utilizing quoted prices for similar assets and liabilities in active markets or other market observable inputs such as interest rates and yield curves.
|
Level 3
|
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s Level 3 assets and liabilities consist of the contingent purchase price associated with the Company's business combinations. The fair value of the certain development or regulatory milestone based contingent purchase prices were determined in a discounted cash flow framework by probability weighting the future contractual payment with management's assessment of the likelihood of achieving these milestones and present valuing them using a risk adjusted discount rate. Certain sales milestone based payments were determined in a discounted cash flow framework where risk-adjusted revenue scenarios were estimated using Monte Carlo simulation models to compute contractual payments which were present valued using a risk adjusted discount rate.
|
|
|
As of December 31, 2014
|
|
As of December 31, 2013
|
||||||||||||||||||||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
|
Balance at
December 31,
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
|
Balance at
December 31,
|
||||||||||||||||
Assets and Liabilities
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
2014
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
2013
|
||||||||||||||||
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market
|
|
$
|
6,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,030
|
|
|
$
|
45,950
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,950
|
|
Total assets at fair value
|
|
$
|
6,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,030
|
|
|
$
|
45,950
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,950
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Contingent purchase price
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
351,134
|
|
|
$
|
351,134
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
302,363
|
|
|
$
|
302,363
|
|
Total liabilities at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
351,134
|
|
|
$
|
351,134
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
302,363
|
|
|
$
|
302,363
|
|
|
|
Fair Value as of
|
|
|
|
|
|
|
||
|
|
December 31, 2014
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
(Weighted Average)
|
||
|
|
(in thousands)
|
|
|
|
|
|
|
||
Targanta:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
6,334
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of success
|
|
20%
|
|
|
|
|
|
|
Periods in which milestones are expected to be achieved
|
|
2019
|
||
|
|
|
|
|
|
Discount rate
|
|
11%
|
||
Incline:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
123,800
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of success
|
|
64% - 100% (83%)
|
|
|
|
|
|
|
Periods in which milestones are expected to be achieved
|
|
2015-2018
|
||
|
|
|
|
|
|
Discount Rate
|
|
18%
|
||
ProFibrix:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
88,600
|
|
|
Probability-adjusted discounted cash flow
|
|
Probability of success
|
|
5% - 95% (92%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2015 - 2017
|
||
|
|
|
|
|
|
Discount rate
|
|
2.5% - 24.1%
|
||
Rempex:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price: commercial milestone
|
|
$
|
80,800
|
|
|
Probability-adjusted discounted cash flow
|
|
Probability of success
|
|
11% -95% (63%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2015 - 2019
|
||
|
|
|
|
|
|
Discount rate
|
|
1.5% - 3.7%
|
||
Contingent purchase price: sales milestone
|
|
$
|
10,900
|
|
|
Risk adjusted revenue simulation
|
|
Probability of success
|
|
9% - 49% (17%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2016 - 2022
|
||
|
|
|
|
|
|
Discount rate
|
|
1.5% - 4.5%
|
||
|
|
|
|
|
|
|
|
|
||
Tenaxis:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
40,700
|
|
|
Probability-adjusted discounted cash flow
|
|
Probability of success
|
|
5% - 100% (84%)
|
|
|
|
|
|
|
Periods in which milestones are expected to be achieved
|
|
2015 - 2026
|
||
|
|
|
|
|
|
Discount rate
|
|
1% - 20%
|
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
Fair Value as of
|
|
|
|
|
|
|
||
|
|
December 31, 2013
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
(Weighted Average)
|
||
|
|
(in thousands)
|
|
|
|
|
|
|
||
Targanta:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
5,573
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of success
|
|
20%
|
|
|
|
|
|
|
Periods in which milestones are expected to be achieved
|
|
2019
|
||
|
|
|
|
|
|
Discount rate
|
|
11%
|
||
Incline:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
115,890
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of success
|
|
60% - 85% (79%)
|
|
|
|
|
|
|
Periods in which milestones are expected to be achieved
|
|
2013-2017
|
||
|
|
|
|
|
|
Discount Rate
|
|
18%
|
||
ProFibrix:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
84,000
|
|
|
Probability-adjusted discounted cash flow
|
|
Probability of success
|
|
5% - 95% (91%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2015 - 2017
|
||
|
|
|
|
|
|
Discount rate
|
|
4.9% - 17.5%
|
||
Rempex:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price: commercial milestone
|
|
$
|
87,900
|
|
|
Probability-adjusted discounted cash flow
|
|
Probability of success
|
|
11% -95% (63%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2014 - 2019
|
||
|
|
|
|
|
|
Discount rate
|
|
1.5% - 4.38%
|
||
Contingent purchase price: sales milestone
|
|
$
|
9,000
|
|
|
Risk adjusted revenue simulation
|
|
Probability of success
|
|
9% - 49% (18%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2016 - 2022
|
||
|
|
|
|
|
|
Discount rate
|
|
2% - 5.4%
|
||
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(in thousands)
|
||||||
Balance at beginning of period
|
$
|
302,363
|
|
|
$
|
18,971
|
|
Fair value of contingent purchase price with respect to Incline as of January 4, 2013
|
—
|
|
|
87,200
|
|
||
Fair value of contingent purchase price with respect to ProFibrix as of August 5, 2013
|
—
|
|
|
82,550
|
|
||
Fair value of contingent purchase price with respect to Rempex as of December 3, 2013
|
—
|
|
|
96,700
|
|
||
Fair value of contingent purchase price with respect to Tenaxis as of May1, 2014
|
37,900
|
|
|
—
|
|
||
Fair value adjustment to contingent purchase price included in net income (loss)
|
10,871
|
|
|
16,942
|
|
||
Balance at end of period
|
$
|
351,134
|
|
|
$
|
302,363
|
|
16.
|
Restructuring Costs and Other, Net
|
|
Balance as
of January 1,
2014
|
|
Expenses,
Net
|
|
Cash
|
|
Noncash
|
|
Balance as of
December 31,
2014
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Employee severance and other personnel benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2014 European workforce reduction
|
$
|
—
|
|
|
$
|
8,660
|
|
|
$
|
(632
|
)
|
|
$
|
(334
|
)
|
|
$
|
7,694
|
|
2013 workforce reduction
|
370
|
|
|
—
|
|
|
—
|
|
|
(370
|
)
|
|
—
|
|
|||||
2014 European leases and equipment write-off
|
—
|
|
|
347
|
|
|
—
|
|
|
(147
|
)
|
|
200
|
|
|||||
Total
|
$
|
370
|
|
|
$
|
9,007
|
|
|
$
|
(632
|
)
|
|
$
|
(851
|
)
|
|
$
|
7,894
|
|
|
Balance as
of January 1,
2013
|
|
Expenses,
Net
|
|
Cash
|
|
Noncash
|
|
Balance as of
December 31,
2013
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Employee severance and other personnel benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2011 Leipzig closure and other associated costs
|
$
|
1,009
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,009
|
)
|
|
$
|
—
|
|
2013 workforce reduction
|
—
|
|
|
6,358
|
|
|
(5,699
|
)
|
|
(289
|
)
|
|
370
|
|
|||||
Total
|
$
|
1,009
|
|
|
$
|
6,358
|
|
|
$
|
(5,699
|
)
|
|
$
|
(1,298
|
)
|
|
$
|
370
|
|
17.
|
Commitments and Contingencies
|
Contractual Obligations
(1) (2)
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Later Years
|
|
Total
|
||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||
Inventory related commitments
|
|
$
|
52,174
|
|
|
$
|
783
|
|
|
$
|
130
|
|
|
$
|
130
|
|
|
$
|
130
|
|
|
$
|
—
|
|
|
$
|
53,347
|
|
Long-term debt obligations
|
|
3,781
|
|
|
3,781
|
|
|
276,576
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
284,138
|
|
|||||||
Research and development
|
|
72,617
|
|
|
1,952
|
|
|
3,210
|
|
|
44
|
|
|
10
|
|
|
—
|
|
|
77,833
|
|
|||||||
Operating leases
|
|
8,221
|
|
|
7,556
|
|
|
8,235
|
|
|
7,230
|
|
|
7,277
|
|
|
48,540
|
|
|
87,059
|
|
|||||||
Selling, general and administrative
|
|
2,589
|
|
|
1,167
|
|
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,830
|
|
|||||||
Total contractual obligations
|
|
$
|
139,382
|
|
|
$
|
15,239
|
|
|
$
|
288,225
|
|
|
$
|
7,404
|
|
|
$
|
7,417
|
|
|
$
|
48,540
|
|
|
$
|
506,207
|
|
(1)
|
This table does not include any milestone and royalty payments which may become payable to third parties for which the timing and likelihood of such payments are not known, as discussed below.
|
(2)
|
This table does not include
$400.0 million
aggregate principal amount of the convertible senior notes due 2022 issued by us in January 2015 (see Footnote No. 22).
|
•
|
$49.4 million
due to the former shareholders of Targanta and up to
$25.0 million
in additional payments to other third parties;
|
•
|
up to
$189.3 million
due to the former shareholders of Incline and up to
$113.0 million
in additional payments to other third parties;
|
•
|
up to
$140.0 million
due to the former shareholders of ProFibrix;
|
•
|
up to
$315.7 million
due to the former shareholders of Rempex;
|
•
|
up to
$112.0 million
due to the former shareholders of Tenaxis;
|
•
|
up to
$170.0 million
due to the Alnylam license and collaboration agreement;
|
•
|
up to
$422.0 million
due to the Company's license agreement with Pfizer Inc. related to MDCO-216; and
|
•
|
up to
$54.5 million
due to the Company's license agreement with AstraZeneca related to cangrelor.
|
18.
|
Employee Benefit Plan
|
19.
|
Segment and Geographic Information
|
|
Years Ended December 31,
|
|
|
|||||||||||||||||
|
2014
|
|
|
|
2013
|
|
|
|
2012
|
|
|
|||||||||
|
(In thousands)
|
|
|
|||||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
687,830
|
|
|
95.0
|
%
|
|
$
|
629,459
|
|
|
91.5
|
%
|
|
$
|
512,044
|
|
|
91.7
|
%
|
Europe
|
32,859
|
|
|
4.5
|
%
|
|
50,419
|
|
|
7.3
|
%
|
|
38,517
|
|
|
6.9
|
%
|
|||
Other
|
3,719
|
|
|
0.5
|
%
|
|
7,986
|
|
|
1.2
|
%
|
|
8,027
|
|
|
1.4
|
%
|
|||
Total net revenue
|
$
|
724,408
|
|
|
|
|
|
$
|
687,864
|
|
|
|
|
|
$
|
558,588
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||||
|
2014
|
|
|
|
2013
|
|
|
||||||
|
(In thousands)
|
|
|
||||||||||
Long-lived assets:
|
|
|
|
|
|
|
|
|
|
|
|
||
United States
|
$
|
1,218,370
|
|
|
99.3
|
%
|
|
$
|
1,139,210
|
|
|
99.2
|
%
|
Europe
|
8,899
|
|
|
0.7
|
%
|
|
9,035
|
|
|
0.8
|
%
|
||
Other
|
15
|
|
|
—
|
%
|
|
22
|
|
|
—
|
%
|
||
Total long-lived assets
|
$
|
1,227,284
|
|
|
|
|
|
$
|
1,148,267
|
|
|
|
|
|
|
|
||||||||||
|
|
Foreign currency translation adjustment
|
|
Unrealized (gain) loss on available for sale securities
|
|
Total
|
||||||
|
|
(in thousands)
|
||||||||||
Balance at December 31, 2012
|
|
$
|
(825
|
)
|
|
$
|
59
|
|
|
$
|
(766
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
(3,876
|
)
|
|
(10
|
)
|
|
(3,886
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income*
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total other comprehensive (loss) income
|
|
(3,876
|
)
|
|
(10
|
)
|
|
(3,886
|
)
|
|||
Balance at December 31, 2013
|
|
$
|
(4,701
|
)
|
|
$
|
49
|
|
|
$
|
(4,652
|
)
|
Other comprehensive loss before reclassifications
|
|
7,180
|
|
|
—
|
|
|
7,180
|
|
|||
Amounts reclassified from accumulated other comprehensive income*
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total other comprehensive loss
|
|
7,180
|
|
|
—
|
|
|
7,180
|
|
|||
Balance at December 31, 2014
|
|
$
|
2,479
|
|
|
$
|
49
|
|
|
$
|
2,528
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
Mar. 31,
2014 |
|
June 30,
2014 |
|
Sept. 30,
2014 |
|
Dec. 31,
2014 |
|
Mar. 31,
2013 |
|
June 30,
2013 |
|
Sept. 30,
2013 |
|
Dec. 31,
2013 |
||||||||||||||||
|
|
|
(4)
|
|
|
|
(3) (4)
|
|
(1)
|
|
|
|
|
|
(2)
|
||||||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||||||||||||
Net revenue
|
$
|
177,235
|
|
|
$
|
183,774
|
|
|
$
|
172,401
|
|
|
$
|
190,998
|
|
|
$
|
155,753
|
|
|
$
|
172,826
|
|
|
$
|
174,282
|
|
|
$
|
185,003
|
|
Cost of revenue
|
66,867
|
|
|
85,687
|
|
|
69,076
|
|
|
66,000
|
|
|
56,714
|
|
|
63,938
|
|
|
65,794
|
|
|
76,339
|
|
||||||||
Total operating expenses
|
162,484
|
|
|
215,660
|
|
|
185,052
|
|
|
225,779
|
|
|
178,392
|
|
|
143,907
|
|
|
151,509
|
|
|
200,865
|
|
||||||||
Net income (loss) attributable to The Medicines Company
|
(4,996
|
)
|
|
(5,157
|
)
|
|
(16,736
|
)
|
|
(5,323
|
)
|
|
(11,573
|
)
|
|
18,094
|
|
|
7,793
|
|
|
1,198
|
|
||||||||
Basic net income per common share attributable to The Medicines Company
|
$
|
(0.08
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
0.33
|
|
|
$
|
0.13
|
|
|
$
|
0.02
|
|
Diluted net income per common share attributable to The Medicines Company
|
$
|
(0.08
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
0.30
|
|
|
$
|
0.12
|
|
|
$
|
0.02
|
|
(1)
|
Net loss for the first quarter of 2013
includes licensing costs of
$25.0 million
for a transaction with Alnylam on the PCSK9 RNAi hypercholesterolemia program.
|
(2)
|
Net income for the fourth quarter of 2013 includes a
$10.9 million
increase related to the progression in development work for IONSYS related to the Company’s Incline acquisition and a tax benefit of
$13.6 million
from reducing the Company’s deferred tax liabilities associated with the Incline acquisition.
|
(3)
|
In December 2014, the Company entered into a settlement and amendment to the merger agreement with Incline Therapeutics, Inc., which resulted in revisions to certain milestone triggers, a reduction in total milestone payments and the release of the escrow funds to the Company. As a result, net loss for the fourth quarter of 2014 includes
$25.7 million
in one-time income in connection with the settlement with the former equityholders of Incline related to the representations and warranties included in the merger agreement.
|
(4)
|
Net loss for the second and fourth quarters of 2014 includes impairment charges on product licenses in the amount of
$15.1 million
and
$6.4 million
, respectively to cost of sales, as a result of reductions in estimated future cash flows expected to be generated by the acute care generic products as determined by an updated discounted cash flow analysis (Level 3).
|
Number
|
|
Description
|
|
|
|
|
|
|
2.1
|
|
Agreement and Plan of Merger among the registrant, Boxford Subsidiary Corporation, and Targanta Therapeutics Corporation, dated as of January 12, 2009 (incorporated by reference to Exhibit 2.1 to the registrant’s current report on Form 8-K, filed on January 14, 2009).
|
|
2.2#†
|
|
Agreement and Plan of Merger, dated December 11, 2012, by and among the registrant, Incline Therapeutics, Inc., Silver Surfer Acquisition Corp. and Fortis Advisors LLC (incorporated by reference to Exhibit 2.1 to the registrant's current report on Form 8-K, filed January 10, 2013).
|
|
2.3†
|
|
Settlement and Amendment to Agreement and Plan of Merger, dated as of December 8, 2014, by and between the registrant and Fortis Advisors LLC. (filed herewith)
|
|
2.4#†
|
|
Master Transaction Agreement, dated December 11, 2012, by and between the registrant and Bristol-Myers Squibb Company (incorporated by reference to Exhibit 2.1 to the registrant's current report on Form 8-K, filed February 8, 2013).
|
|
2.5#†
|
|
Share Purchase Agreement, dated June 4, 2013, by and among the registrant, ProFibrix B.V., the equityholders of ProFibrix, certain members of the management team of ProFibrix in their capacities as warrantors of certain information in the Share Purchase Agreement, the holders of options to acquire equity interests in ProFibrix and the representative (incorporated by reference to Exhibit 2.1 to the registrant's current report on Form 8-K, filed August 7, 2013).
|
|
2.6#†
|
|
Agreement and Plan of Merger, dated December 3, 2013, by and among the registrant, Rempex Pharmaceuticals, Inc., Ravioli Acquisition Corp. and Fortis Advisors LLC (incorporated by reference to Exhibit 2.1 to the registrant’s current report on Form 8- K filed December 6, 2013).
|
|
2.7#†
|
|
Agreement and Plan of Merger, dated April 21, 2014, by and among the Company, Tenaxis, Napa Acquisition Corp. and Fortis Advisors LLC (incorporated by reference to Exhibit 2.1 to the registrant’s current report on Form 8- K filed May 7, 2014).
|
|
3.1
|
|
Third Amended and Restated Certificate of Incorporation of the registrant, as amended (filed as Exhibit 4.1 to the Amendment No. 1 to the registrant’s registration statement on Form 8-A/A, filed July 14, 2005).
|
|
3.2
|
|
Amended and Restated By-laws of the registrant, as amended (filed as Exhibit 3.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2012).
|
|
4.1
|
|
Indenture (including Form of Notes), dated as of June 11, 2012, by and between The Medicines Company and Wells Fargo Bank, National Association, a national banking association, as trustee (filed as Exhibit 4.1 to the registrant's current report on Form 8-K, filed June 14, 2012).
|
|
4.2
|
|
Indenture (including Form of Notes), dated as of January 13, 2015, by and between The Medicines Company and Wells Fargo Bank, National Association, a national banking association, as trustee (filed as Exhibit 4.1 to the registrant's current report on Form 8-K, filed January 13, 2015).
|
|
10.1†
|
|
License Agreement, dated as of June 6, 1990, by and between Biogen, Inc. and Health Research, Inc., as assigned to the registrant (incorporated by reference to Exhibit 10.6 to the registration statement on Form S-1 filed on May 19, 2000 (registration no. 333-37404)).
|
|
10.2†
|
|
License Agreement dated March 21, 1997, by and between the registrant and Biogen, Inc. (incorporated by reference to Exhibit 10.7 to the registration statement on Form S-1 filed on May 19, 2000 (registration no. 333-37404)).
|
|
10.3†
|
|
License Agreement effective as of March 28, 2003 by and between AstraZeneca AB and the registrant (incorporated by reference to Exhibit 10.17 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2003).
|
|
10.4†
|
|
Amendment No. 1 to License Agreement dated April 25, 2006 by and between AstraZeneca AB and the registrant (incorporated by reference to Exhibit 10.1 to the registrant's quarterly report on Form 10-Q for the quarter ended June 30, 2006).
|
|
10.5
|
|
Amendment No. 2 to License Agreement, dated October 22, 2008 by and between AstraZeneca AB and the registrant (incorporated by reference to Exhibit 10.38 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
|
10.6†
|
|
License Agreement dated as of December 18, 2003 by and between AstraZeneca AB and the registrant (incorporated by reference to Exhibit 10.18 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2003).
|
|
10.7†
|
|
Amendment to License Agreement dated July 6, 2007 between AstraZeneca AB and the registrant (incorporated by reference to Exhibit 10.4 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2007).
|
Number
|
|
Description
|
|
|
|
|
|
|
10.8
|
|
Second Amendment to License Agreement dated as of June 1, 2010 between AstraZeneca AB and the registrant (incorporated by reference to Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2010).
|
|
10.9†
|
|
Second Amended and Restated Distribution Agreement effective as of October 1, 2010 between the registrant and Integrated Commercialization Solutions, Inc. (incorporated by reference to Exhibit 10.54 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2010).
|
|
10.10†
|
|
First Amendment to the Second Amended and Restated Distribution Agreement, dated July 1, 2011, between registrant and Integrated Commercialization Solutions, Inc. (incorporated by reference to Exhibit 10.5 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2011).
|
|
10.11†
|
|
Second Amendment to the Second Amended and Restated Distribution Agreement, dated July 1, 2011, between registrant and Integrated Commercialization Solutions, Inc. (incorporated by reference to Exhibit 10.6 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2011).
|
|
10.12†
|
|
Third Amendment to Second Amended and Restated Distribution Agreement, dated April 23, 2012, between registrant and Integrated Commercialization Solutions, Inc. (incorporated by reference to Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2012).
|
|
10.13†
|
|
Fourth Amendment to Second Amended and Restated Distribution Agreement, dated April 29, 2013, by and between registrant and Integrated Commercialization Solutions, Inc. (incorporated by reference to Exhibit 10.2 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2013).
|
|
10.14
|
|
Fifth Amendment to Second Amended and Restated Distribution Agreement, dated September 12, 2013, by and between registrant and Integrated Commercialization Solutions, Inc. (incorporated by reference to Exhibit 10.3 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2013).
|
|
10.15†
|
|
Sixth Amendment to Second Amended and Restated Distribution Agreement, effective as of March 1, 2014, by and between registrant and Integrated Commercialization Solutions, Inc. (incorporated by reference to Exhibit 10.2 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2014).
|
|
10.16
|
|
License Agreement, dated December 23, 2005 by and between Targanta Therapeutics Corporation (as successor to InterMune, Inc.) and Eli Lilly and Company (incorporated by reference to Exhibit 10.11 to Targanta’s registration statement on Form S-1 (registration no. 333-142842), as amended, originally filed with the SEC on May 11, 2007).
|
|
10.17†
|
|
License Agreement dated as of December 18, 2009 between the registrant and Pfizer Inc. (incorporated by reference to Exhibit 10.41 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2009).
|
|
10.18†
|
|
License Agreement, dated January 22, 2012, between registrant and APP Pharmaceuticals, LLC (incorporated by reference to Exhibit 10.2 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2012).
|
|
10.19†
|
|
Contract Manufacturing Agreement, dated January 22, 2012, between registrant and APP Pharmaceuticals, LLC (incorporated by reference to Exhibit 10.3 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2012).
|
|
10.20†
|
|
License and Supply Agreement, dated January 22, 2012, between registrant and APP Pharmaceuticals, LLC (incorporated by reference to Exhibit 10.4 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2012).
|
|
10.21†
|
|
AG Supply Agreement, dated January 22, 2012, between registrant and APP Pharmaceuticals, LLC (incorporated by reference to Exhibit 10.5 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2012).
|
|
10.22†
|
|
License Agreement, dated September 30, 2011, between registrant and Teva Pharmaceuticals USA, Inc. (incorporated by reference to Exhibit 10.3 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2011).
|
|
10.23†
|
|
Supply Agreement, dated September 30, 2011, between registrant and Plantex USA Inc. (incorporated by reference to Exhibit 10.4 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2011).
|
|
10.24†
|
|
Amendment 1 to the Supply Agreement, dated February 13, 2012, between registrant and Teva API, Inc. (formerly known as Plantex USA Inc.) (incorporated by reference to Exhibit 10.6 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2012).
|
|
10.25†
|
|
License and Asset Transfer Agreement, dated June 21, 2010, between ALZA Corporation and Incline Therapeutics Inc. (incorporated by reference to Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2013).
|
|
10.26†
|
|
License and Collaboration Agreement, dated February 3, 2013, between Alnylam Pharmaceuticals, Inc. and the registrant (incorporated by reference to Exhibit 10.2 to Amendment No. 1 to the registrant’s quarterly report on Form 10-Q/A for the quarter ended March 31, 2013).
|
Number
|
|
Description
|
|
|
|
|
|
|
10.27†
|
|
Patent Licensing Agreement, dated October 25, 2004, by and between Quadrant Drug Delivery Limited and ProFibrix B.V., as amended by Amendment Deed No. 1, dated February 14, 2007, Amendment Deed No. 2, dated June 12, 2007, and Amendment Deed No. 3, dated July 2, 2012. (incorporated by reference to Exhibit 10.1 of the registrant’s quarterly report on Form 10-Q for the period ended September 30, 2013).
|
|
10.28†
|
|
Chemilog Development and Supply Agreement, dated as of December 20, 1999, by and between the registrant and UCB Bioproducts S.A. (incorporated by reference to Exhibit 10.5 to the registration statement on Form S-1 filed on May 19, 2000 (registration no. 333-37404)).
|
|
10.29†
|
|
Manufacturing Services Agreement, dated March 30, 2011, between registrant and Patheon International A.G. (incorporated by reference to Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2011).
|
|
10.30†
|
|
Agreement dated January 15, 2014 with effect from February 4, 2014 between Rempex Pharmaceuticals, Inc. and the Biomedical Advanced Research and Development Authority of the U.S. Department of Health and Human Services (incorporated by reference to Exhibit 10.1 to the registrant's quarterly report on Form 10-Q for the quarter ended March 31, 2014).
|
|
10.31*
|
|
Consulting Agreement, dated July 6, 2012, by and between the registrant and Strategic Imagery, LLC (incorporated by reference to Exhibit 10.2 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2012).
|
|
10.32*
|
|
Amendment to Consulting Agreement, dated December 3, 2012, by and between the registrant and Strategic Imagery, LLC (incorporated by reference to Exhibit 10.66 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2012).
|
|
10.33*
|
|
Second Amendment to Consulting Agreement, dated July 6, 2013, by and between the registrant and Strategic Imagery, LLC. (filed herewith)
|
|
10.34*
|
|
Third Amendment to Consulting Agreement, dated July 7, 2014, by and between the registrant and Strategic Imagery, LLC. (filed herewith)
|
|
10.35
|
|
Lease for 8 Sylvan Way, Parsippany, NJ dated October 11, 2007 by and between 8 Sylvan Way, LLC and the registrant (incorporated by reference to Exhibit 10.32 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2007).
|
|
10.36
|
|
Amendment to Lease for 8 Sylvan Way, Parsippany, NJ dated October 11, 2007 by and between 8 Sylvan Way, LLC and the registrant (incorporated by reference to Exhibit 10.40 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
|
10.37†
|
|
Consent and Release Agreement dated as of December 18, 2009 between the registrant and Washington Cardiovascular Associates, LLC, HDLT LLC, H. Bryan Brewer, Silvia Santamarina-Fojo and Michael Matin (incorporated by reference to Exhibit 10.42 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2009).
|
|
10.38†
|
|
Settlement Agreement, dated September 30, 2011, between registrant and Teva Pharmaceuticals USA, Inc. (incorporated by reference to Exhibit 10.2 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2011).
|
|
10.39†
|
|
Settlement Agreement, dated January 22, 2012, between registrant and APP Pharmaceuticals, LLC (incorporated by reference to Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2012).
|
|
10.40*
|
|
Employment agreement dated September 5, 1996 by and between the registrant and Clive Meanwell (incorporated by reference to Exhibit 10.12 to the registration statement on Form S-1 filed on May 19, 2000 (registration no. 333-37404)).
|
|
10.41*
|
|
Letter Agreement dated March 2, 2006 by and between the registrant and Glenn P. Sblendorio, (incorporated by reference to Exhibit 10.23 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2005).
|
|
10.42*
|
|
Restricted stock agreement of Clive Meanwell under the registrant’s Amended and Restated 2004 Stock Incentive Plan (incorporated by reference to Exhibit 10.53 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2010).
|
|
10.43*
|
|
Form of Amended and Restated Management Severance Agreement by and between the registrant and each of Clive Meanwell and Glenn Sblendorio (incorporated by reference to Exhibit 10.24 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
Number
|
|
Description
|
|
|
|
|
|
|
10.44*
|
|
Form of Amended and Restated Management Severance Agreement by and between the registrant and William O’Connor (incorporated by reference to Exhibit 10.25 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
|
10.45*
|
|
Director Compensation Summary. (incorporated by reference to Exhibit 10.10 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2013).
|
|
10.46*
|
|
Summary of Performance Measures under the registrant’s Annual Cash Bonus Plan (incorporated by reference to Item 5.02 of the registrant's current report on Form 8-K, filed on February 27, 2012).
|
|
10.47*
|
|
1998 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to the registration statement on Form S-1 filed on May 19, 2000 (registration no. 333-37404)).
|
|
10.48*
|
|
2000 Outside Director Stock Option Plan, as amended (incorporated by reference to Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2003).
|
|
10.49*
|
|
2001 Non-Officer, Non-Director Employee Stock Incentive Plan (incorporated by reference to Exhibit 99.1 to the registration statement on Form S-8 filed December 5, 2001 (registration no. 333-74612)).
|
|
10.50*
|
|
The Medicines Company’s 2004 Amended and Restated Stock Incentive Plan, as amended (incorporated by reference to Appendix II to the registrant’s definitive proxy statement, dated and filed with the Securities and Exchange Commission on April 30, 2010, for the registrant’s 2010 Annual Meeting of Stockholders).
|
|
10.51*
|
|
Amended and Restated 2004 Stock Incentive Plan (incorporated by reference to Exhibit 99.1 to the registrant’s registration statement on Form S-8, dated June 30, 2010).
|
|
10.52*
|
|
Form of stock option agreement under 2004 Stock Incentive Plan (incorporated by reference to Exhibit 10.22 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2004).
|
|
10.53*
|
|
Form of restricted stock agreement under 2004 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2006).
|
|
10.54*
|
|
Form of restricted stock agreement under the registrant’s Amended and Restated 2004 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2010).
|
|
10.55*
|
|
2007 Equity Inducement Plan (incorporated by reference to Exhibit 10.1 to the registration statement on Form S-8 filed January 11, 2008 (registration no. 333-148602)).
|
|
10.56*
|
|
Form of stock option agreement under 2007 Equity Inducement Plan (incorporated by reference to Exhibit 10.34 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2007).
|
|
10.57*
|
|
Form of restricted stock agreement under 2007 Equity Inducement Plan (incorporated by reference to Exhibit 10.35 to the registrant’s Annual Report on Form 10-K for the year ended December 31, 2007).
|
|
10.58*
|
|
2009 Equity Inducement Plan (incorporated by reference to Exhibit 10.1 to the registration statement on Form S-8 filed February 24, 2009 (registration number 333-157499)).
|
|
10.59*
|
|
Form of stock option agreement under 2009 Equity Inducement Plan (incorporated by reference to Exhibit 10.2 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2009).
|
|
10.60*
|
|
Form of stock option agreement for employees in Italy under 2009 Equity Inducement Plan (incorporated by reference to Exhibit 10.3 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2009).
|
|
10.61*
|
|
Form of restricted stock agreement under 2009 Equity Inducement Plan (incorporated by reference to Exhibit 10.4 to the registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2009).
|
|
10.62*
|
|
The Medicines Company’s 2010 Employee Stock Purchase Plan (incorporated by reference to Appendix I to the registrant’s definitive proxy statement, dated and filed with the Securities and Exchange Commission on April 30, 2010, for the registrant’s 2010 Annual Meeting of Stockholders).
|
|
10.63*
|
|
The Medicines Company 2013 Stock Incentive Plan (incorporated by reference as Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2013).
|
Number
|
|
Description
|
|
|
|
|
|
|
10.64*
|
|
Amendment No. 1 to The Medicines Company 2013 Stock Incentive Plan (incorporated by reference as Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2014).
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10.65*
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|
Form of employee stock option agreement under the registrant’s 2013 Stock Incentive Plan (incorporated by reference as Exhibit 10.2 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2013).
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|
10.66*
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|
Form of non-employee director stock option agreement under the registrant’s 2013 Stock Incentive Plan (incorporated by reference as Exhibit 10.3 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2013).
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|
10.67*
|
|
Form of employee restricted stock option agreement under the registrant’s 2013 Stock Incentive Plan (incorporated by reference as Exhibit 10.4 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2013).
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|
10.68*
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|
Form of non-employee director restricted stock option agreement under the registrant’s 2013 Stock Incentive Plan (incorporated by reference as Exhibit 10.5 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2013).
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10.69
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Contingent Payment Rights Agreement dated February 25, 2009 between the registrant and American Stock Transfer & Trust Company (incorporated by reference to Exhibit 99.1 of the registrant’s current report on Form 8-K, filed on March 2, 2009).
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21
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Subsidiaries of the registrant. (filed herewith)
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23
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|
Consent of Ernst & Young LLP, Independent Registered Accounting Firm. (filed herewith)
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31.1
|
|
Chief Executive Officer — Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
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31.2
|
|
Chief Financial Officer — Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
|
|
32.1
|
|
Chief Executive Officer — Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)
|
|
32.2
|
|
Chief Financial Officer — Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (furnished herewith)
|
|
101.INS
|
|
The following materials from The Medicines Company Annual Report on Form 10-K for the year ended December 31, 2014, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statement of Income, (iii) the Consolidated Statement of Cash Flows, and (iv) Notes to Consolidated Financial Statements
.
|
#
|
|
Schedules (and similar attachments) have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally copies of any of the omitted schedules (or similar attachments) to the Securities and Exchange Commission upon request.
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|
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*
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|
Management contract or compensatory plan or arrangement filed as an exhibit to this form pursuant to Items 15(a) and 15(c) of Form 10-K
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†
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|
Confidential treatment requested as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission Unless otherwise indicated, the exhibits incorporated herein by reference were filed under Commission file number 000-31191.
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|
|
|
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Double asterisks denote omissions.
|
Milestone
|
Milestone Event
|
Milestone Payment ($)
|
Milestone A
|
Buyer or any of its Affiliates, enters into any Japan Agreement on or before [**]. Notwithstanding the foregoing, if the Buyer has executed a term sheet or letter of intent with respect to a Japan Agreement and is engaged in active negotiations with respect thereto on [**], the deadline for entry into the Japan Agreement shall be extended until [**].
|
$[**].
|
Milestone #1
|
Regulatory Approval in the United States
|
$[**].
|
Milestone #2
|
Regulatory Approval in the European Union
|
$[**].
|
Milestone #3
|
Aggregate Net Sales in the United States and the European Union exceed $[**] during any twelve (12) consecutive calendar month period ending within twenty-four (24) months following the earlier of (A) First Commercial Sale in the United States or (B) First Commercial Sale in the European Union
|
$[**]
|
Milestone #4
|
Aggregate Net Sales in the United States and the European Union exceed $[**] during any twelve (12) consecutive calendar month period ending within forty-eight (48) months following the earlier of (A) First Commercial Sale in the United States or (B) First Commercial Sale in the European Union
|
$[**]
|
3.1
|
The date this Agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the effective date of this Agreement (the "Effective Date"). If a Party signs fails to date a signature, the date that the other party receives the signing Party's signature will be deemed to be the date that the signing Party signed this agreement, and the other Party may inscribe that date as the date associated with the signing Party’s signature. This Agreement will continue until July 6, 2014 (the "Term"). Thereafter, this Agreement shall be subject to renewal for successive periods, upon the further written agreement of the Parties.
|
4.1
|
During the Term of this Agreement, the Company will pay the Consultant hour1y consulting fees in the amount of $500. The total amount payable for the Services under this Agreement shall not exceed in excess of$120,000 during any period of twelve consecutive months without prior written authorization from Company. The Company' s payment of the fees specified in this Agreement constitutes full payment to Consultant for the Services and Consultant shall not receive any other compensation or benefits for the Services. If, however, the Company requests a modification of the Services, the Parties shall agree in writing to adjust the fee accordingly.
|
4.3
|
Unless otherwise agreed to in writing by the Parties, Consultant shall invoice Company on a monthly basis for fees and expenses for the Services performed using the form of invoice attached hereto as Exhibit A. Such invoices shall include a detailed description of the Services rendered and the time spent in performance of those Services. Company agrees to pay Consultant invoices within forty-five (45) days of receipt. Unless indicated otherwise in a particular Scope of Services, Consultant shall submit such invoices for payment to the following address:
|
Name of Subsidiary
|
Jurisdiction of Incorporation
or Organization
|
|
|
Annovation BioPharma, Inc.
|
Delaware
|
Circomed, LLC
|
Delaware
|
Incline Therapeutics Europe Ltd.
|
England and Wales
|
Incline Therapeutics, Inc.
|
Delaware
|
MDCO Holdings C.V.
|
The Netherlands
|
MEDCO Brasil Participações Ltda.
|
Brazil
|
Medicines Company (India) Private Limited
|
India
|
ProFibrix B.V.
|
The Netherlands
|
ProFibrix, Inc.
|
Delaware
|
Rempex London Limited
|
England and Wales
|
Rempex Pharmaceuticals, Inc.
|
Delaware
|
Targanta Therapeutics Corporation
|
Delaware
|
Targanta Therapeutics Inc.
|
Canada
|
Tenaxis Medical, Inc.
|
Delaware
|
The Medicines Company do Brasil Comercio de Medicamentos e Produtos Medicos Ltda.
|
Brazil
|
The Medicines Company France SAS
|
France
|
The Medicines Company Holdings, Inc.
|
Delaware
|
The Medicines Company (Australia) Pty Limited
|
Australia
|
The Medicines Company (Austria) GmbH
|
Austria
|
The Medicines Company (Belgium) SPRL/BVBA
|
Belgium
|
The Medicines Company (Denmark) ApS
|
Denmark
|
The Medicines Company (Deutschland) GmbH
|
Germany
|
The Medicines Company (Finland) Oy
|
Finland
|
The Medicines Company (Hong Kong) Limited
|
Hong Kong
|
The Medicines Company (Italy) S.r.l.
|
Italy
|
The Medicines Company (Leipzig) GmbH
|
Germany
|
The Medicines Company (Netherlands) BV
|
The Netherlands
|
The Medicines Company (New Zealand) Limited
|
New Zealand
|
The Medicines Company (NL) B.V.
|
The Netherlands
|
The Medicines Company (Poland) Sp.z.o.o.
|
Poland
|
The Medicines Company (Norway) AS
|
Norway
|
The Medicines Company (Schweiz) GmbH
|
Switzerland
|
The Medicines Company (Spain) S.L.
|
Spain
|
The Medicines Company (Sweden) AB
|
Sweden
|
The Medicines Company UK Limited
|
England and Wales
|
The Medicines Company Ventures, Inc.
|
Delaware
|
Vita Solutions, Inc.
|
Delaware
|
|
|
|
|
/s/ Clive A. Meanwell
|
|
|
Clive A. Meanwell
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
Dated:
|
March 2, 2015
|
|
|
|
/s/ Glenn P. Sblendorio
|
|
|
Glenn P. Sblendorio
|
|
|
President and Chief Financial Officer
|
|
|
|
Dated:
|
March 2, 2015
|
|
|
|
By:
|
/s/ Clive A. Meanwell
|
|
|
|
Clive A. Meanwell
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
Dated:
|
March 2, 2015
|
|
|
|
|
By:
|
/s/ Glenn P. Sblendorio
|
|
|
|
Glenn P. Sblendorio
|
|
|
|
President and Chief Financial Officer
|
|
|
|
|
Dated:
|
March 2, 2015
|
|
|