(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, 2015
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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-10.21
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EX-10.33
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EX-10.34
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EX-10.46
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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 and Approved Products
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Angiomax
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Marketed as a branded product, and as an authorized generic in the United States through Sandoz
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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, Kazakhstan, 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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Ionsys
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Marketed in the United States; Approved in the European Union
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Patient-controlled analgesia system
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Short-term management of acute postoperative pain in hospitalized patients
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Kengreal
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Marketed in the United States; Approved in the European Union
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Antiplatelet agent
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Adjunct to PCI for reducing risk of periprocedural thrombotic events in patients who have not been treated with a P2Y12 inhibitor and are not being given a GPI
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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; Approved in the European Union
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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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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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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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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, Ondansetron 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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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 2
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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
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Combination of vaborbactam (formerly known as 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 1/2
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Naturally occurring variant of a protein found in high-density lipoprotein
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Reverse 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 do not show bactericidal activity in vitro or in vivo. In contrast, bactericidal antibiotics, such as oritavancin, kill bacteria in vitro and in vivo in experimental models of infection;
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oral antibiotic options can be associated with poor patient adherence to prescribed regimens, resulting in the need to seek retreatment in the emergency room and potentially hospital admission;
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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 plasma drug concentrations is commonly utilized when a frequently used intravenous antibiotic used for the treatment of ABSSSI due to MRSA is given to a patient.
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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 Ionsys sales efforts on hospital systems, individual hospitals, and health care providers, including anesthesiologists, surgeons, nurses and pharmacists;
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our Kengreal sales efforts on 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 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, case managers and microbiologists; 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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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
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Item 1A.
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Risk Factors.
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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 newly launched products;
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secure formulary approvals at our hospital customers;
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have third parties manufacture and release 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 payors;
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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 related to the Targanta transaction;
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$60.0 million
due to the former equityholders of Incline and up to
$93.0 million
in additional payments to other third parties related to the Incline transaction;
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$289.8 million
for the Rempex transaction;
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$26.3 million
for the Annovation transaction and up to
$6.5 million
in additional payments to other third parties related to the Annovation 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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$50.0 million
due to our licensing of Kengreal from AstraZeneca.
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the extent to which our products are commercially successful globally;
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the decline in Angiomax sales and the extent to which royalties on sales of the authorized generic of Angiomax offset the expected decrease in sales of Angiomax;
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whether we are successful in narrowing our operational focus by strategically separating non-core businesses and products, and the amount of consideration paid to us in connection with any related sales or divestitures;
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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 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 our products and 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 or engage in certain strategic transactions without securing bondholder consent;
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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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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’ strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities;
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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
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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.
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delay in approving or refusal to approve a product;
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product recall or seizure;
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suspension or withdrawal of an approved product from the market;
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delays in, suspension of or prohibition of commencing clinical trials of products in development;
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interruption of production;
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operating restrictions;
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untitled or warning letters;
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injunctions;
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fines and other monetary penalties;
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the imposition of civil or criminal penalties;
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disruption of importing and exporting activities; and
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unanticipated expenditures.
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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;
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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;
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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;
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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
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various state laws that impose similar requirements and liability with respect to state healthcare reimbursement and other programs.
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obtain and maintain U.S. and foreign patents, including defending those patents against adverse claims;
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secure patent term extension for the patents covering our approved products;
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protect trade secrets;
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operate without infringing the proprietary rights of others; and
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prevent others from infringing our proprietary rights.
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approval or rejection of submissions for marketing approval for our products and products in development;
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regulatory actions by the FDA or a foreign jurisdiction limiting or revoking the use of our products or products in development;
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changes in securities analysts' estimates of our financial performance;
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changes in valuations of similar companies;
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variations in our operating results;
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whether we are successful in narrowing our operational focus by strategically separating non-core businesses and products, and the amount of consideration paid to us in connection with any related sales or divestitures;
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acquisitions and strategic partnerships;
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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;
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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;
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the timing, amount and receipt of revenue from sales of our products and margins on sales of our products;
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changes in governmental regulations;
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developments in patent rights or other proprietary rights;
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the extent to which our products are commercially successful globally;
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developments in our ongoing litigation and significant new litigation;
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developments or issues with our contract manufacturers;
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changes in our management; and
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general market conditions.
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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;
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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;
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our directors are elected to staggered terms, which prevents our entire board of directors from being replaced in any single year;
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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.
|
|
Common Stock
Price
|
||||||
|
High
|
|
Low
|
||||
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
|
|
Year Ended December 31, 2015
|
|
|
|
|
|
||
First Quarter
|
$
|
32.44
|
|
|
$
|
23.32
|
|
Second Quarter
|
$
|
33.64
|
|
|
$
|
25.27
|
|
Third Quarter
|
$
|
43.79
|
|
|
$
|
25.38
|
|
Fourth Quarter
|
$
|
43.00
|
|
|
$
|
31.07
|
|
|
|
|
|
12/10*
|
|
12/11*
|
|
12/12*
|
|
12/13*
|
|
12/14*
|
|
12/15*
|
The Medicines Company
|
100.00
|
|
131.92
|
|
169.64
|
|
273.32
|
|
195.82
|
|
264.26
|
NASDAQ Composite
|
100.00
|
|
100.53
|
|
116.92
|
|
166.19
|
|
188.78
|
|
199.95
|
NASDAQ Biotechnology
|
100.00
|
|
113.92
|
|
153.97
|
|
263.29
|
|
348.49
|
|
369.06
|
*
|
|
Fiscal year ended December 31.
|
Item 6.
|
Selected Financial Data.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||
|
(In thousands, except per share data)
|
|||||||||||||||||||
Statements of Operations Data
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net product revenues
|
$
|
255,148
|
|
|
$
|
659,690
|
|
|
$
|
624,608
|
|
|
$
|
558,588
|
|
|
$
|
484,732
|
|
|
Royalty revenues
|
53,859
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total net revenues
|
309,007
|
|
|
659,690
|
|
|
624,608
|
|
|
558,588
|
|
|
484,732
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of product revenue
|
119,931
|
|
|
233,330
|
|
|
216,636
|
|
|
177,339
|
|
|
156,866
|
|
||||||
Research and development
|
123,606
|
|
|
139,512
|
|
|
138,260
|
|
|
126,423
|
|
|
110,180
|
|
||||||
Selling, general and administrative
|
337,943
|
|
|
314,954
|
|
|
247,823
|
|
|
171,753
|
|
|
159,617
|
|
||||||
Total operating expenses
|
581,480
|
|
|
687,796
|
|
|
602,719
|
|
|
475,515
|
|
|
426,663
|
|
||||||
(Loss) income from operations
|
(272,473
|
)
|
|
(28,106
|
)
|
|
21,889
|
|
|
83,073
|
|
|
58,069
|
|
||||||
Legal settlement
|
5,000
|
|
|
25,736
|
|
|
—
|
|
|
—
|
|
|
17,984
|
|
||||||
Co-promotion and license income
|
10,132
|
|
|
24,236
|
|
|
17,383
|
|
|
10,000
|
|
|
—
|
|
||||||
Gain on remeasurement of equity investment
|
22,741
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Gain on sale of investment
|
19,773
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Loss in equity investment
|
(144
|
)
|
|
(1,711
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest expense
|
(37,092
|
)
|
|
(15,701
|
)
|
|
(15,531
|
)
|
|
(8,005
|
)
|
|
—
|
|
||||||
Investment impairment
|
—
|
|
|
(7,500
|
)
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other income
|
400
|
|
|
918
|
|
|
1,420
|
|
|
1,140
|
|
|
1,790
|
|
||||||
(Loss) income from continuing operations before income taxes
|
(251,663
|
)
|
|
(2,128
|
)
|
|
25,161
|
|
|
86,208
|
|
|
77,843
|
|
||||||
Benefit (provision) for income taxes
|
29,743
|
|
|
2,309
|
|
|
(2,273
|
)
|
|
(35,038
|
)
|
|
50,034
|
|
||||||
Net (loss) income from continuing operations
|
(221,920
|
)
|
|
181
|
|
|
22,888
|
|
|
51,170
|
|
|
127,877
|
|
||||||
Loss from discontinued operations, net of tax
|
(130,826
|
)
|
|
(32,529
|
)
|
|
(7,628
|
)
|
|
—
|
|
|
—
|
|
||||||
Net (loss) income
|
(352,746
|
)
|
|
(32,348
|
)
|
|
15,260
|
|
|
51,170
|
|
|
127,877
|
|
||||||
Net (income) loss attributable to non-controlling interest
|
(10
|
)
|
|
138
|
|
|
252
|
|
|
84
|
|
|
—
|
|
||||||
Net (loss) income attributable to The Medicines Company
|
$
|
(352,756
|
)
|
|
$
|
(32,210
|
)
|
|
$
|
15,512
|
|
|
$
|
51,254
|
|
|
$
|
127,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic (loss) earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
|
|
|
|
|||||||||||
(Loss) earnings from continuing operations
|
$
|
(3.32
|
)
|
|
$
|
—
|
|
|
$
|
0.40
|
|
|
$
|
0.96
|
|
|
$
|
2.39
|
|
|
Loss from discontinued operations
|
(1.96
|
)
|
|
(0.50
|
)
|
|
(0.13
|
)
|
|
—
|
|
|
—
|
|
||||||
Basic (loss) earnings per share
|
$
|
(5.28
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
0.27
|
|
|
$
|
0.96
|
|
|
$
|
2.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted (loss) earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
|
|
|
|
|||||||||||
(Loss) earnings from continuing operations
|
$
|
(3.32
|
)
|
|
$
|
—
|
|
|
$
|
0.37
|
|
|
$
|
0.93
|
|
|
$
|
2.35
|
|
|
Loss from discontinued operations
|
$
|
(1.96
|
)
|
|
(0.49
|
)
|
|
(0.12
|
)
|
|
—
|
|
|
—
|
|
|||||
Diluted (loss) earnings per share
|
$
|
(5.28
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
0.25
|
|
|
$
|
0.93
|
|
|
$
|
2.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Shares used in computing basic (loss) earnings per common share
|
66,809
|
|
|
64,473
|
|
|
58,096
|
|
|
53,545
|
|
|
53,496
|
|
||||||
Shares used in computing diluted (loss) earnings per common share
|
66,809
|
|
|
66,668
|
|
|
62,652
|
|
|
55,346
|
|
|
54,407
|
|
|
As of December 31,
|
||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||
|
(In thousands)
|
||||||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents, available for sale securities and accrued interest receivable
|
$
|
373,173
|
|
|
370,741
|
|
|
376,727
|
|
|
$
|
570,669
|
|
|
$
|
340,886
|
|
Working capital
|
296,232
|
|
|
220,071
|
|
|
417,188
|
|
|
621,169
|
|
|
327,088
|
|
|||
Total assets
|
1,806,951
|
|
|
1,885,705
|
|
|
1,741,282
|
|
|
972,182
|
|
|
692,647
|
|
|||
Long-term liabilities
|
521,403
|
|
|
561,791
|
|
|
674,868
|
|
|
250,754
|
|
|
26,370
|
|
|||
Accumulated deficit
|
(429,865
|
)
|
|
(77,109
|
)
|
|
(44,899
|
)
|
|
(60,411
|
)
|
|
(111,665
|
)
|
|||
Total stockholders’ equity
|
731,774
|
|
|
920,091
|
|
|
892,161
|
|
|
586,222
|
|
|
511,642
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Year Ended December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Net product revenues
|
$
|
255,148
|
|
|
$
|
659,690
|
|
|
$
|
(404,542
|
)
|
|
(61.3
|
)%
|
Royalty revenues
|
53,859
|
|
|
—
|
|
|
53,859
|
|
|
100.0
|
%
|
|||
Total net revenues
|
$
|
309,007
|
|
|
$
|
659,690
|
|
|
$
|
(350,683
|
)
|
|
(53.2
|
)%
|
|
Year Ended December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Angiomax
|
$
|
211,970
|
|
|
$
|
635,703
|
|
|
$
|
(423,733
|
)
|
|
(66.7
|
)%
|
Other products
|
43,178
|
|
|
23,987
|
|
|
19,191
|
|
|
80.0
|
%
|
|||
Total net product revenues
|
$
|
255,148
|
|
|
$
|
659,690
|
|
|
$
|
(404,542
|
)
|
|
(61.3
|
)%
|
•
|
expenses in connection with the manufacture of our products sold, including expenses related to excess inventory;
|
•
|
royalty expenses in 2014 under our agreements with Biogen and HRI related to Angiomax, in 2015 under our agreement with Eli Lilly and Company related to Orbactiv and in both 2014 and 2015 under our agreement with AstraZeneca related to Cleviprex and our agreement with Eagle Pharmaceuticals, Inc. related to ready-to-use Argatroban;
|
•
|
amortization and impairment of the costs of license agreements, product rights, developed product rights and other identifiable intangible assets, which result from product and business acquisitions;
|
•
|
logistics costs related to Angiomax, Cleviprex, Orbactiv, Minocin IV, ready-to-use Argatroban, Kengreal and Ionsys, including distribution, storage, and handling costs;
|
|
Year Ended December 31,
|
||||||||||||
|
2015
|
|
% of Total
Cost
|
|
2014
|
|
% of Total
Cost
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
Manufacturing/Logistics
|
$
|
51,255
|
|
|
42.7
|
%
|
|
$
|
63,978
|
|
|
27.4
|
%
|
Royalty
|
10,163
|
|
|
8.5
|
%
|
|
135,087
|
|
|
57.9
|
%
|
||
Amortization and impairment of inventory, acquired product rights and intangible assets
|
58,513
|
|
|
48.8
|
%
|
|
34,265
|
|
|
14.7
|
%
|
||
Total cost of product revenue
|
$
|
119,931
|
|
|
100
|
%
|
|
$
|
233,330
|
|
|
100
|
%
|
|
Year Ended December 31,
|
||||||||||||
|
2015
|
|
% of Total R&D
|
|
2014
|
|
% of Total R&D
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
Marketed products
|
$
|
28,600
|
|
|
23.1
|
%
|
|
$
|
34,394
|
|
|
24.7
|
%
|
Registration stage product candidates
|
5,457
|
|
|
4.4
|
%
|
|
26,684
|
|
|
19.1
|
%
|
||
Research and development product candidates
|
89,549
|
|
|
72.5
|
%
|
|
78,434
|
|
|
56.2
|
%
|
||
Total research and development expenses
|
$
|
123,606
|
|
|
100.0
|
%
|
|
$
|
139,512
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Selling, general and administrative expenses
|
$
|
337,943
|
|
|
$
|
314,954
|
|
|
$
|
22,989
|
|
|
7.3
|
%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Legal settlement
|
$
|
5,000
|
|
|
$
|
25,736
|
|
|
$
|
(20,736
|
)
|
|
(80.6
|
)%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Co-promotion and license income
|
$
|
10,132
|
|
|
$
|
24,236
|
|
|
$
|
(14,104
|
)
|
|
(58.2
|
)%
|
|
Year Ended
December 31, |
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Gain on remeasurement of equity investment
|
$
|
22,741
|
|
|
$
|
—
|
|
|
$
|
22,741
|
|
|
100.0
|
%
|
|
Year Ended
December 31, |
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Gain on sale of investment
|
$
|
19,773
|
|
|
$
|
—
|
|
|
$
|
19,773
|
|
|
100.0
|
%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Loss in equity investment
|
$
|
(144
|
)
|
|
$
|
(1,711
|
)
|
|
$
|
1,567
|
|
|
(91.6
|
)%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Interest expense
|
$
|
(37,092
|
)
|
|
$
|
(15,701
|
)
|
|
$
|
(21,391
|
)
|
|
(136.2
|
)%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|
|
|||||||||
Investment impairment
|
$
|
—
|
|
|
$
|
(7,500
|
)
|
|
$
|
7,500
|
|
|
(100.0
|
)%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Other income
|
$
|
400
|
|
|
$
|
918
|
|
|
$
|
(518
|
)
|
|
(56.4
|
)%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
||||||
|
(In thousands)
|
|
|
||||||||||
Benefit from income taxes
|
$
|
29,743
|
|
|
$
|
2,309
|
|
|
$
|
27,434
|
|
|
*
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
||||||
|
(In thousands)
|
|
|
||||||||||
Loss from discontinued operations, net of tax
|
$
|
(130,826
|
)
|
|
$
|
(32,529
|
)
|
|
$
|
(98,297
|
)
|
|
*
|
|
Year Ended December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Angiomax
|
$
|
635,703
|
|
|
$
|
608,572
|
|
|
$
|
27,131
|
|
|
4.5
|
%
|
Other products
|
23,987
|
|
|
16,036
|
|
|
7,951
|
|
|
49.6
|
%
|
|||
Total net revenue
|
$
|
659,690
|
|
|
$
|
624,608
|
|
|
$
|
35,082
|
|
|
5.6
|
%
|
•
|
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;
|
•
|
logistics costs related to Angiomax, Cleviprex, Orbactiv, Minocin IV and ready-to-use Argatroban, including distribution, storage, and handling costs;
|
|
Year Ended December 31,
|
||||||||||||
|
2014
|
|
% of Total
Cost
|
|
2013
|
|
% of Total
Cost
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
Manufacturing/Logistics
|
$
|
63,978
|
|
|
27.4
|
%
|
|
$
|
60,549
|
|
|
27.9
|
%
|
Royalty
|
135,087
|
|
|
57.9
|
%
|
|
146,659
|
|
|
67.7
|
%
|
||
Amortization and impairment of inventory, acquired product rights and intangible assets
|
34,265
|
|
|
14.7
|
%
|
|
9,428
|
|
|
4.4
|
%
|
||
Total cost of product revenue
|
$
|
233,330
|
|
|
100
|
%
|
|
$
|
216,636
|
|
|
100
|
%
|
|
Year Ended December 31,
|
||||||||||||
|
2014
|
|
% of Total R&D
|
|
2013
|
|
% of Total R&D
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
Marketed products
|
34,394
|
|
|
24.7
|
%
|
|
$
|
56,581
|
|
|
40.9
|
%
|
|
Registration stage product candidates
|
26,684
|
|
|
19.1
|
%
|
|
35,749
|
|
|
25.9
|
%
|
||
Research and development product candidates
|
78,434
|
|
|
56.2
|
%
|
|
45,930
|
|
|
33.2
|
%
|
||
Total research and development expenses
|
$
|
139,512
|
|
|
100.0
|
%
|
|
$
|
138,260
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Selling, general and administrative expenses
|
$
|
314,954
|
|
|
$
|
247,823
|
|
|
$
|
67,131
|
|
|
27.1
|
%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Legal settlement
|
$
|
25,736
|
|
|
$
|
—
|
|
|
$
|
25,736
|
|
|
100.0
|
%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Co-promotion and license 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
|
)
|
|
(100.0
|
)%
|
|
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
|
)
|
|
(100.0
|
)%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
|||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(In thousands)
|
|
|
|||||||||||
Other income
|
$
|
918
|
|
|
$
|
1,420
|
|
|
$
|
(502
|
)
|
|
(35.4
|
)%
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
||||||
|
(In thousands)
|
|
|
||||||||||
Benefit (provision) for income tax
|
$
|
2,309
|
|
|
$
|
(2,273
|
)
|
|
$
|
4,582
|
|
|
*
|
|
Year Ended
December 31,
|
|
Change
|
|
Change
|
||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
||||||
|
(In thousands)
|
|
|
||||||||||
Loss from discontinued operations, net of tax
|
$
|
(32,529
|
)
|
|
$
|
(7,628
|
)
|
|
$
|
(24,901
|
)
|
|
*
|
•
|
$49.4 million
due to the former equityholders of Targanta and up to
$25.0 million
in additional payments to other third parties related to the Targanta transaction;
|
•
|
$60.0 million
due to the former equityholders of Incline and up to
$93.0 million
in additional payments to other third parties related to the Incline transaction
;
|
•
|
$289.8 million
for the Rempex transaction;
|
•
|
$26.3 million
for the Annovation transaction and up to
$6.5 million
in additional payments to other third parties related to the Annovation transaction;
|
•
|
$170.0 million
for the license and collaboration agreement with Alnylam;
|
•
|
$422.0 million
due to our licensing of MDCO-216 from Pfizer Inc., or Pfizer; and
|
•
|
$50.0 million
due to our licensing of Kengreal from AstraZeneca.
|
•
|
the extent to which our products are commercially successful globally;
|
•
|
the decline in Angiomax sales and the extent to which royalties on sales of the authorized generic of Angiomax offset the expected decrease in sales of Angiomax;
|
•
|
whether we are successful in narrowing our operational focus by strategically separating non-core businesses and products, and the amount of consideration paid to us in connection with any related sales or divestitures;
|
•
|
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 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 our products and 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)
|
|
Total
|
|
1 Year
|
|
1 - 3 Years
|
|
4 - 5 Years
|
|
5 Years
|
||||||||||
Inventory related commitments
|
|
$
|
48,866
|
|
|
$
|
48,866
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term debt obligations, including interest
|
|
745,672
|
|
|
13,781
|
|
|
296,891
|
|
|
20,000
|
|
|
415,000
|
|
|||||
Research and development
|
|
49,902
|
|
|
43,934
|
|
|
5,253
|
|
|
715
|
|
|
—
|
|
|||||
Operating leases
|
|
79,019
|
|
|
7,645
|
|
|
15,548
|
|
|
14,648
|
|
|
41,178
|
|
|||||
Selling, general and administrative
|
|
6,869
|
|
|
4,067
|
|
|
2,348
|
|
|
454
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
930,328
|
|
|
118,293
|
|
|
$
|
320,040
|
|
|
$
|
35,817
|
|
|
$
|
456,178
|
|
(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)
|
Also excluded from the above table is a liability for uncertain tax positions totaling
$8.9 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 Kengreal, we are obligated to make additional payments of up to
$50.0 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 Kengreal, 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 Kengreal in a country ten years from our first commercial sale of Kengreal 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
$60.0 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
$93.0 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 Rempex, we agreed to pay contingent payments of up to
$289.8 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 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 six months of expiration and analyze the likelihood that such product will be returned within 12 months after expiration. We consider all of these factors and adjust 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 our product returns accrual.
|
•
|
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
$2.7 million
and
$0.9 million
at
December 31, 2015
and
2014
, respectively. A 10% change in our fee-for-service accruals and allowances would have had an approximately
$0.3 million
effect on our net revenue for the year ended
December 31, 2015
.
|
|
Cash
Discounts
|
|
Returns
|
|
Chargebacks
|
|
Rebates
|
|
Fees-for-
Service
|
||||||||||
Balance at January 1, 2013
|
$
|
2,010
|
|
|
$
|
1,113
|
|
|
$
|
14,843
|
|
|
$
|
—
|
|
|
$
|
3,577
|
|
Allowances for sales during 2013
|
15,943
|
|
|
2,524
|
|
|
130,374
|
|
|
—
|
|
|
12,059
|
|
|||||
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
|
|
|||||
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
|
|
|||||
Allowances for sales during 2015
|
9,212
|
|
|
12,143
|
|
|
107,564
|
|
|
833
|
|
|
14,249
|
|
|||||
Actual credits issued for prior year’s sales
|
(3,927
|
)
|
|
(3,528
|
)
|
|
(40,419
|
)
|
|
|
|
|
(1,179
|
)
|
|||||
Actual credits issued for sales during 2015
|
(8,540
|
)
|
|
(3,221
|
)
|
|
(95,828
|
)
|
|
(733
|
)
|
|
(11,314
|
)
|
|||||
Balance at December 31, 2015
|
$
|
887
|
|
|
$
|
8,743
|
|
|
$
|
15,716
|
|
|
$
|
100
|
|
|
$
|
2,680
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures 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 14.
|
Principal Accounting Fees and Services.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
By:
|
/s/ Clive A. Meanwell
|
|
Clive A. Meanwell
|
|
Chief Executive Officer
|
Signature
|
|
Title(s)
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ Clive A. Meanwell
|
|
Chief Executive Officer and Director
|
|
February 29, 2016
|
Clive A. Meanwell
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ William B. O'Connor
|
|
Chief Financial Officer
|
|
February 29, 2016
|
William B. O'Connor
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ William W. Crouse
|
|
Director
|
|
February 29, 2016
|
William W. Crouse
|
|
|
|
|
|
|
|
|
|
/s/ Alexander J. Denner
|
|
Director
|
|
February 29, 2016
|
Alexander J. Denner
|
|
|
|
|
|
|
|
|
|
/s/
Fredric N. Eshelman
|
|
Director (Chairman of the Board)
|
|
February 29, 2016
|
Fredric N. Eshelman
|
|
|
|
|
|
|
|
|
|
/s/ Robert J. Hugin
|
|
Director
|
|
February 29, 2016
|
Robert J. Hugin
|
|
|
|
|
|
|
|
|
|
/s/ John C. Kelly
|
|
Director
|
|
February 29, 2016
|
John C. Kelly
|
|
|
|
|
|
|
|
|
|
/s/ Armin M. Kessler
|
|
Director
|
|
February 29, 2016
|
Armin M. Kessler
|
|
|
|
|
|
|
|
|
|
/s/ Robert G. Savage
|
|
Director
|
|
February 29, 2016
|
Robert G. Savage
|
|
|
|
|
|
|
|
|
|
/s/ Hiroaki Shigeta
|
|
Director
|
|
February 29, 2016
|
Hiroaki Shigeta
|
|
|
|
|
|
|
|
|
|
/s/ Melvin K. Spigelman
|
|
Director
|
|
February 29, 2016
|
Melvin K. Spigelman
|
|
|
|
|
|
|
|
|
|
/s/ Elizabeth H.S. Wyatt
|
|
Director
|
|
February 29, 2016
|
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/ William B. O'Connor
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
373,173
|
|
|
$
|
370,741
|
|
Accounts receivable, net of allowances of approximately $17.6 million and $47.0 million at December 31, 2015 and 2014
|
52,328
|
|
|
155,691
|
|
||
Inventory, net
|
64,584
|
|
|
78,971
|
|
||
Prepaid expenses and other current assets
|
19,995
|
|
|
15,989
|
|
||
Current assets held for sale
|
322,837
|
|
|
2,502
|
|
||
Total current assets
|
832,917
|
|
|
623,894
|
|
||
Fixed assets, net
|
34,780
|
|
|
38,330
|
|
||
Intangible assets, net
|
636,220
|
|
|
563,718
|
|
||
Goodwill
|
289,441
|
|
|
262,032
|
|
||
Restricted cash
|
1,428
|
|
|
1,446
|
|
||
Deferred tax assets
|
—
|
|
|
33,080
|
|
||
Other assets
|
12,165
|
|
|
8,034
|
|
||
Noncurrent assets held for sale
|
—
|
|
|
355,171
|
|
||
Total assets
|
$
|
1,806,951
|
|
|
$
|
1,885,705
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
36,038
|
|
|
$
|
19,799
|
|
Accrued expenses
|
128,558
|
|
|
159,252
|
|
||
Current portion of contingent purchase price
|
26,800
|
|
|
123,610
|
|
||
Convertible senior notes
|
257,911
|
|
|
—
|
|
||
Deferred revenue
|
19,863
|
|
|
14,350
|
|
||
Current liabilities held for sale
|
67,515
|
|
|
86,812
|
|
||
Total current liabilities
|
536,685
|
|
|
403,823
|
|
||
Contingent purchase price
|
96,957
|
|
|
98,224
|
|
||
Convertible senior notes
|
321,104
|
|
|
246,676
|
|
||
Deferred tax liability
|
89,996
|
|
|
105,172
|
|
||
Other liabilities
|
13,346
|
|
|
9,944
|
|
||
Noncurrent liabilities held for sale
|
—
|
|
|
101,775
|
|
||
Total liabilities
|
1,058,088
|
|
|
965,614
|
|
||
Equity component of currently redeemable convertible senior notes (Note 10)
|
17,089
|
|
|
—
|
|
||
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; 187,500,000 authorized, 71,767,371 issued, and 69,574,389 outstanding at December 31, 2015 and 125,000,000 authorized, 67,667,468 issued, and 65,474,486 outstanding at December 31, 2014
|
72
|
|
|
68
|
|
||
Additional paid-in capital
|
1,208,058
|
|
|
1,045,078
|
|
||
Treasury stock, at cost; 2,192,982 at December 31, 2015 and December 31, 2014
|
(50,000
|
)
|
|
(50,000
|
)
|
||
Accumulated deficit
|
(429,865
|
)
|
|
(77,109
|
)
|
||
Accumulated other comprehensive income
|
3,973
|
|
|
2,528
|
|
||
Total The Medicines Company stockholders’ equity
|
732,238
|
|
|
920,565
|
|
||
Non-controlling interest in joint venture
|
(464
|
)
|
|
(474
|
)
|
||
Total stockholders’ equity
|
731,774
|
|
|
920,091
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,806,951
|
|
|
$
|
1,885,705
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net product revenues
|
$
|
255,148
|
|
|
$
|
659,690
|
|
|
$
|
624,608
|
|
Royalty revenues
|
53,859
|
|
|
—
|
|
|
—
|
|
|||
Total net revenues
|
309,007
|
|
|
659,690
|
|
|
624,608
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of product revenue
|
119,931
|
|
|
233,330
|
|
|
216,636
|
|
|||
Research and development
|
123,606
|
|
|
139,512
|
|
|
138,260
|
|
|||
Selling, general and administrative
|
337,943
|
|
|
314,954
|
|
|
247,823
|
|
|||
Total operating expenses
|
581,480
|
|
|
687,796
|
|
|
602,719
|
|
|||
(Loss) income from operations
|
(272,473
|
)
|
|
(28,106
|
)
|
|
21,889
|
|
|||
Legal settlement
|
5,000
|
|
|
25,736
|
|
|
—
|
|
|||
Co-promotion and license income
|
10,132
|
|
|
24,236
|
|
|
17,383
|
|
|||
Gain on remeasurement of equity investment
|
22,741
|
|
|
—
|
|
|
—
|
|
|||
Gain on sale of investment
|
19,773
|
|
|
—
|
|
|
—
|
|
|||
Loss in equity investment
|
(144
|
)
|
|
(1,711
|
)
|
|
—
|
|
|||
Interest expense
|
(37,092
|
)
|
|
(15,701
|
)
|
|
(15,531
|
)
|
|||
Investment impairment
|
—
|
|
|
(7,500
|
)
|
|
—
|
|
|||
Other income
|
400
|
|
|
918
|
|
|
1,420
|
|
|||
(Loss) income from continuing operations before income taxes
|
(251,663
|
)
|
|
(2,128
|
)
|
|
25,161
|
|
|||
Benefit (provision) for income taxes
|
29,743
|
|
|
2,309
|
|
|
(2,273
|
)
|
|||
Net (loss) income from continuing operations
|
(221,920
|
)
|
|
181
|
|
|
22,888
|
|
|||
Loss from discontinued operations, net of tax
|
(130,826
|
)
|
|
(32,529
|
)
|
|
(7,628
|
)
|
|||
Net (loss) income
|
(352,746
|
)
|
|
(32,348
|
)
|
|
15,260
|
|
|||
Net (income) loss attributable to non-controlling interest
|
(10
|
)
|
|
138
|
|
|
252
|
|
|||
Net (loss) income attributable to The Medicines Company
|
$
|
(352,756
|
)
|
|
$
|
(32,210
|
)
|
|
$
|
15,512
|
|
|
|
|
|
|
|
||||||
Basic (loss) earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
||||||
(Loss) earnings from continuing operations
|
$
|
(3.32
|
)
|
|
$
|
—
|
|
|
$
|
0.40
|
|
Loss from discontinued operations
|
(1.96
|
)
|
|
(0.50
|
)
|
|
(0.13
|
)
|
|||
Basic (loss) earnings per share
|
$
|
(5.28
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
0.27
|
|
|
|
|
|
|
|
||||||
Diluted (loss) earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
||||||
(Loss) earnings from continuing operations
|
$
|
(3.32
|
)
|
|
$
|
—
|
|
|
$
|
0.37
|
|
Loss from discontinued operations
|
(1.96
|
)
|
|
(0.49
|
)
|
|
(0.12
|
)
|
|||
Diluted (loss) earnings per share
|
$
|
(5.28
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
0.25
|
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|||
Basic
|
66,809
|
|
|
64,473
|
|
|
58,096
|
|
|||
Diluted
|
66,809
|
|
|
66,668
|
|
|
62,652
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net (loss) income
|
$
|
(352,746
|
)
|
|
$
|
(32,348
|
)
|
|
$
|
15,260
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||||
Unrealized (loss) gain on available for sale securities
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||
Foreign currency translation adjustment
|
1,445
|
|
|
7,180
|
|
|
(3,876
|
)
|
|||
Comprehensive (loss) income
|
(351,301
|
)
|
|
(25,168
|
)
|
|
11,374
|
|
|||
Less: comprehensive income (loss) attributable to noncontrolling interest
|
10
|
|
|
(138
|
)
|
|
(252
|
)
|
|||
Comprehensive (loss) income attributable to The Medicines Company
|
$
|
(351,311
|
)
|
|
$
|
(25,030
|
)
|
|
$
|
11,626
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-in
|
|
Accumulated
|
|
Accumulated
Comprehensive
(Loss)
|
|
Non-
controlling
Interest
|
|
Total
Stockholders’
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Income
|
|
in JV
|
|
Equity
|
||||||||||||||||
Balance at January 1, 2013
|
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 (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
Employee stock purchases
|
2,989
|
|
|
3
|
|
|
|
|
|
|
65,235
|
|
|
|
|
|
|
|
|
|
|
65,238
|
|
||||||||||
Issuance of restricted stock awards
|
166
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||
Issuance of common stock
|
945
|
|
|
1
|
|
|
|
|
|
|
29,963
|
|
|
|
|
|
|
|
|
29,964
|
|
||||||||||||
Non-cash stock compensation
|
|
|
|
|
|
|
|
|
|
30,605
|
|
|
|
|
|
|
|
|
|
|
30,605
|
|
|||||||||||
Equity component of the convertible notes, issuance, net
|
|
|
|
|
|
|
|
|
37,177
|
|
|
|
|
|
|
|
|
37,177
|
|
||||||||||||||
Net (loss) income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(352,756
|
)
|
|
|
|
|
10
|
|
|
(352,746
|
)
|
|||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,445
|
|
|
|
|
1,445
|
|
||||||||||
Balance at December 31, 2015
|
71,767
|
|
|
$
|
72
|
|
|
(2,193
|
)
|
|
$
|
(50,000
|
)
|
|
$
|
1,208,058
|
|
|
$
|
(429,865
|
)
|
|
$
|
3,973
|
|
|
$
|
(464
|
)
|
|
$
|
731,774
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(352,746
|
)
|
|
$
|
(32,348
|
)
|
|
$
|
15,260
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
34,837
|
|
|
34,398
|
|
|
32,238
|
|
|||
Impairment charges
|
29,413
|
|
|
31,133
|
|
|
—
|
|
|||
Impairment on divestiture
|
133,273
|
|
|
—
|
|
|
—
|
|
|||
Amortization of net premiums and discounts on available for sale securities
|
—
|
|
|
—
|
|
|
209
|
|
|||
Amortization of long term debt financing costs
|
2,433
|
|
|
1,332
|
|
|
1,179
|
|
|||
Amortization of debt discount
|
21,243
|
|
|
10,588
|
|
|
9,978
|
|
|||
Unrealized foreign currency transaction (gains) losses, net
|
(173
|
)
|
|
(833
|
)
|
|
143
|
|
|||
Non-cash stock compensation expense
|
30,605
|
|
|
34,311
|
|
|
23,078
|
|
|||
Loss on disposal of fixed assets
|
543
|
|
|
35
|
|
|
39
|
|
|||
Deferred tax benefit
|
(53,292
|
)
|
|
(5,565
|
)
|
|
(10,272
|
)
|
|||
Excess tax benefit from share-based compensation arrangements
|
—
|
|
|
(1,443
|
)
|
|
(7,675
|
)
|
|||
Gain on sale of investment
|
(19,773
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on remeasurement of equity investment
|
(22,741
|
)
|
|
—
|
|
|
—
|
|
|||
Reserve for excess or obsolete inventory
|
42,599
|
|
|
—
|
|
|
—
|
|
|||
Change in contingent consideration obligation
|
20,278
|
|
|
20,823
|
|
|
16,942
|
|
|||
Loss in equity method investment
|
144
|
|
|
1,711
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accrued interest receivable
|
—
|
|
|
1
|
|
|
347
|
|
|||
Accounts receivable
|
103,100
|
|
|
(54,739
|
)
|
|
(15,017
|
)
|
|||
Inventory, net
|
(69,318
|
)
|
|
5,627
|
|
|
(10,130
|
)
|
|||
Prepaid expenses and other current assets
|
(5,286
|
)
|
|
(3,560
|
)
|
|
39
|
|
|||
Accounts payable
|
16,362
|
|
|
(6,866
|
)
|
|
(1,319
|
)
|
|||
Accrued expenses
|
(39,501
|
)
|
|
24,058
|
|
|
31,192
|
|
|||
Deferred revenue
|
8,386
|
|
|
5,257
|
|
|
3,854
|
|
|||
Payments on contingent purchase price
|
(78,900
|
)
|
|
—
|
|
|
—
|
|
|||
Other liabilities
|
549
|
|
|
3,394
|
|
|
1,335
|
|
|||
Net cash (used in) provided by operating activities
|
(197,965
|
)
|
|
67,314
|
|
|
91,420
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from sale of fixed assets
|
250
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of investment
|
19,773
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from maturities and sales of available for sale securities
|
—
|
|
|
—
|
|
|
50,656
|
|
|||
Purchases of fixed assets
|
(2,555
|
)
|
|
(7,289
|
)
|
|
(13,574
|
)
|
|||
Payments for intangible assets
|
(112,617
|
)
|
|
(15,000
|
)
|
|
—
|
|
|||
Other investments
|
—
|
|
|
(3,625
|
)
|
|
1,125
|
|
|||
Cash used for acquisitions, net
|
(28,397
|
)
|
|
(58,934
|
)
|
|
(542,579
|
)
|
|||
Decrease in restricted cash
|
35
|
|
|
92
|
|
|
11
|
|
|||
Net cash used in investing activities
|
(123,511
|
)
|
|
(84,756
|
)
|
|
(504,361
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuances of common stock
|
95,198
|
|
|
17,343
|
|
|
74,212
|
|
|||
Proceeds from equity offering, net
|
—
|
|
|
—
|
|
|
189,600
|
|
|||
Milestone payments
|
(157,601
|
)
|
|
(9,953
|
)
|
|
—
|
|
|||
Proceeds from the issuance of convertible senior notes
|
400,000
|
|
|
—
|
|
|
—
|
|
|||
Debt issuance costs
|
(12,769
|
)
|
|
—
|
|
|
—
|
|
|||
Excess tax benefit from share-based compensation arrangements
|
—
|
|
|
1,443
|
|
|
7,675
|
|
|||
Net cash provided by financing activities
|
324,828
|
|
|
8,833
|
|
|
271,487
|
|
|||
Effect of exchange rate changes on cash
|
(920
|
)
|
|
2,623
|
|
|
(1,265
|
)
|
|||
(Decrease) increase in cash and cash equivalents
|
2,432
|
|
|
(5,986
|
)
|
|
(142,719
|
)
|
|||
Cash and cash equivalents at beginning of period
|
370,741
|
|
|
376,727
|
|
|
519,446
|
|
|||
Cash and cash equivalents at end of period
|
$
|
373,173
|
|
|
$
|
370,741
|
|
|
$
|
376,727
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Taxes paid
|
$
|
114
|
|
|
$
|
1,371
|
|
|
$
|
9,137
|
|
Interest paid
|
$
|
8,837
|
|
|
$
|
3,782
|
|
|
$
|
4,374
|
|
•
|
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, Cardinal 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 within
60
days after the end of each respective quarter. The Company’s fee-for-service accruals and allowances were
$2.7 million
and
$0.9 million
at
December 31, 2015
and
2014
, respectively.
|
|
Cash
Discounts
|
|
Returns
|
|
Chargebacks
|
|
Rebates
|
|
Fees-for-
Service
|
||||||||||
Balance at January 1, 2013
|
$
|
2,010
|
|
|
$
|
1,113
|
|
|
$
|
14,843
|
|
|
$
|
—
|
|
|
$
|
3,577
|
|
Allowances for sales during 2013
|
15,943
|
|
|
2,524
|
|
|
130,374
|
|
|
—
|
|
|
12,059
|
|
|||||
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
|
|
|||||
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
|
|
|||||
Allowances for sales during 2015
|
9,212
|
|
|
12,143
|
|
|
107,564
|
|
|
833
|
|
|
14,249
|
|
|||||
Actual credits issued for prior year’s sales
|
(3,927
|
)
|
|
(3,528
|
)
|
|
(40,419
|
)
|
|
|
|
|
(1,179
|
)
|
|||||
Actual credits issued for sales during 2015
|
(8,540
|
)
|
|
(3,221
|
)
|
|
(95,828
|
)
|
|
(733
|
)
|
|
(11,314
|
)
|
|||||
Balance at December 31, 2015
|
$
|
887
|
|
|
$
|
8,743
|
|
|
$
|
15,716
|
|
|
$
|
100
|
|
|
$
|
2,680
|
|
|
|
2015
|
|
2014
|
||||
|
|
(In thousands)
|
||||||
Raw materials
|
|
$
|
31,354
|
|
|
$
|
40,237
|
|
Work-in-progress
|
|
21,487
|
|
|
34,095
|
|
||
Finished goods
|
|
11,743
|
|
|
4,639
|
|
||
Total
|
|
$
|
64,584
|
|
|
$
|
78,971
|
|
|
Estimated
|
|
December 31,
|
||||||
|
Life (Years)
|
|
2015
|
|
2014
|
||||
|
|
|
(In thousands)
|
||||||
Furniture, fixtures and equipment
|
2-15
|
|
$
|
25,442
|
|
|
$
|
25,182
|
|
Computer software
|
2-5
|
|
4,078
|
|
|
3,751
|
|
||
Computer hardware
|
2-5
|
|
3,427
|
|
|
4,327
|
|
||
Leasehold improvements
|
2-15
|
|
30,178
|
|
|
31,320
|
|
||
|
|
|
63,125
|
|
|
64,580
|
|
||
Less: Accumulated depreciation
|
|
|
(28,345
|
)
|
|
(26,250
|
)
|
||
|
|
|
$
|
34,780
|
|
|
$
|
38,330
|
|
5.
|
Cash, Cash Equivalents and Restricted Cash
|
6.
|
Non Marketable Investments
|
7.
|
Acquisition
|
|
|
(In thousands)
|
||
Upfront cash consideration
|
|
$
|
28,397
|
|
Fair value of existing equity interest in Annovation
|
|
25,886
|
|
|
Total cash consideration and fair value of existing equity interest
|
|
54,283
|
|
|
Fair value of contingent cash payment
|
|
18,000
|
|
|
Total purchase price
|
|
$
|
72,283
|
|
Assets acquired:
|
|
(In thousands)
|
||
|
|
|
||
Cash and cash equivalents
|
|
$
|
1,482
|
|
Other current assets
|
|
692
|
|
|
IPR&D
|
|
65,000
|
|
|
Goodwill
|
|
24,530
|
|
|
Total assets
|
|
$
|
91,704
|
|
|
|
|
||
Liabilities assumed:
|
|
|
||
|
|
|
||
Accrued expenses
|
|
$
|
398
|
|
Contingent purchase price
|
|
18,000
|
|
|
Deferred tax liability
|
|
19,023
|
|
|
Total liabilities
|
|
$
|
37,421
|
|
|
|
|
||
Total cash price paid upon acquisition and fair value of existing equity interest
|
|
$
|
54,283
|
|
8.
|
Intangible Assets and Goodwill
|
|
|
|
As of December 31, 2015
|
|
As of December 31, 2014
|
|||||||||||||||||||||
|
Weighted
Average
Useful Life
(Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization and other charges
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||||
Amortizable intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Selling rights agreements
(1)
|
—
|
|
|
$
|
9,126
|
|
|
$
|
(9,126
|
)
|
|
$
|
—
|
|
|
$
|
9,125
|
|
|
$
|
(8,961
|
)
|
|
$
|
164
|
|
Product licenses
(2)
|
15.4
|
|
|
31,500
|
|
|
(7,869
|
)
|
|
23,631
|
|
|
39,000
|
|
|
(34,936
|
)
|
|
4,064
|
|
||||||
Developed product rights
(3)
|
16.3
|
|
|
373,090
|
|
|
(14,121
|
)
|
|
358,969
|
|
|
87,030
|
|
|
(2,220
|
)
|
|
84,810
|
|
||||||
Total
|
16.2
|
|
|
$
|
413,716
|
|
|
$
|
(31,116
|
)
|
|
$
|
382,600
|
|
|
$
|
135,155
|
|
|
$
|
(46,117
|
)
|
|
$
|
89,038
|
|
(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.
|
|
December 31,
2015 |
|
December 31,
2014 |
||||
|
(In thousands)
|
||||||
Balance at beginning of period
|
$
|
286,532
|
|
|
$
|
257,694
|
|
Goodwill resulting from the acquisition of Tenaxis
|
—
|
|
|
25,063
|
|
||
Goodwill resulting from the acquisition of Annovation
|
24,530
|
|
|
—
|
|
||
Allocation of goodwill to Hemostasis business
|
(24,500
|
)
|
|
—
|
|
||
Translation adjustments
|
2,879
|
|
|
3,775
|
|
||
Balance at end of period
|
$
|
289,441
|
|
|
$
|
286,532
|
|
9.
|
Accrued Expenses
|
|
2015
|
|
2014
|
||||
|
(In thousands)
|
||||||
Royalties
|
$
|
3,790
|
|
|
$
|
26,821
|
|
Research and development services
|
36,267
|
|
|
29,726
|
|
||
Compensation related
|
31,011
|
|
|
43,992
|
|
||
Product returns, rebates and other fees
|
11,202
|
|
|
6,495
|
|
||
Legal, accounting and other
|
17,930
|
|
|
14,045
|
|
||
Manufacturing, logistics and related fees
|
18,821
|
|
|
30,919
|
|
||
Sales and marketing
|
4,639
|
|
|
6,939
|
|
||
Interest
|
4,898
|
|
|
315
|
|
||
|
$
|
128,558
|
|
|
$
|
159,252
|
|
10.
|
Convertible Senior Notes
|
•
|
during any calendar quarter commencing on or after
March 31, 2015
(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 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 2022 Notes Indenture) per $1,000 principal amount of 2022 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;
|
•
|
during any period after the Company has issued notice of redemption until the close of business on the scheduled trading day immediately preceding the relevant redemption date; or
|
•
|
upon the occurrence of specified corporate events.
|
Liability component
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
|
|
(In thousands)
|
||||||
Principal
|
|
$
|
400,000
|
|
|
$
|
—
|
|
Less: Debt discount, net
(1)
|
|
(78,896
|
)
|
|
—
|
|
||
Net carrying amount
|
|
$
|
321,104
|
|
|
$
|
—
|
|
(1)
|
Included on the accompanying consolidated balance sheets within convertible senior notes (due 2022) and amortized to interest expense over the remaining life of the 2022 Notes using the effective interest rate method.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands)
|
||||||||||
Contractual interest expense
|
$
|
9,639
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortization of debt issuance costs
|
934
|
|
|
—
|
|
|
—
|
|
|||
Amortization of debt discount
|
10,008
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
20,581
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Effective interest rate of the liability component
|
6.50
|
%
|
|
—
|
%
|
|
—
|
%
|
•
|
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
|
•
|
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 2017 Notes Indenture) per $1,000 principal amount of 2017 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,
2015 |
|
December 31,
2014 |
||||
|
|
(In thousands)
|
||||||
Principal
|
|
$
|
275,000
|
|
|
$
|
275,000
|
|
Less: Debt discount, net
(1)
|
|
(17,089
|
)
|
|
(28,324
|
)
|
||
Net carrying amount
|
|
$
|
257,911
|
|
|
$
|
246,676
|
|
(1)
|
Included on the accompanying consolidated balance sheets within convertible senior notes (due 2017) and amortized to interest expense over the remaining life of the 2017 Notes using the effective interest rate method.
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands)
|
||||||||||
Contractual interest expense
|
$
|
3,781
|
|
|
$
|
3,781
|
|
|
$
|
3,781
|
|
Amortization of debt issuance costs
|
1,499
|
|
|
1,332
|
|
|
1,179
|
|
|||
Amortization of debt discount
|
11,235
|
|
|
10,588
|
|
|
9,978
|
|
|||
Total
|
$
|
16,515
|
|
|
$
|
15,701
|
|
|
$
|
14,938
|
|
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).
|
|
Number of Shares
|
|
Weighted-Average
Exercise Price
Per Share
|
|
Weighted-
Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic Value
|
|||||
Outstanding, January 1, 2015
|
8,985,338
|
|
|
$
|
24.05
|
|
|
|
|
|
||
Granted
|
2,106,929
|
|
|
$
|
29.59
|
|
|
|
|
|
||
Exercised
|
(2,804,892
|
)
|
|
$
|
21.72
|
|
|
|
|
|
||
Forfeited and expired
|
(1,002,457
|
)
|
|
$
|
30.28
|
|
|
|
|
|
||
Outstanding, December 31, 2015
|
7,284,918
|
|
|
$
|
25.69
|
|
|
6.88
|
|
$
|
85,296,678
|
|
Vested and expected to vest, December 31, 2015
|
7,013,884
|
|
|
$
|
25.56
|
|
|
6.81
|
|
$
|
83,026,065
|
|
Exercisable, December 31, 2015
|
3,827,073
|
|
|
$
|
22.71
|
|
|
5.41
|
|
$
|
56,014,081
|
|
Available for future grant at December 31, 2015
|
4,314,906
|
|
|
|
|
|
|
|
|
|
|
Years Ended
December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected stock price volatility
|
41.49
|
%
|
|
50.25
|
%
|
|
48.3
|
%
|
Risk-free interest rate
|
1.436
|
%
|
|
1.543
|
%
|
|
1.079
|
%
|
Expected option term (years)
|
5.01
|
|
|
4.96
|
|
|
5.07
|
|
|
Number of
Shares
|
|
Weighted Average
Grant-Date
Fair Value
|
|||
Outstanding, January 1, 2015
|
576,687
|
|
|
$
|
27.50
|
|
Awarded
|
206,237
|
|
|
28.37
|
|
|
Vested
|
(246,178
|
)
|
|
25.71
|
|
|
Forfeited
|
(40,195
|
)
|
|
27.21
|
|
|
Outstanding, December 31, 2015
|
496,551
|
|
|
$
|
28.77
|
|
|
Years Ended
December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Expected stock price volatility
|
44.91
|
%
|
|
38.97
|
%
|
|
32.46
|
%
|
Risk-free interest rate
|
0.15
|
%
|
|
0.07
|
%
|
|
0.09
|
%
|
Expected option term (years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
13.
|
Earnings per Share
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Basic and diluted
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
||||||
Net (loss) income from continuing operations attributable to The Medicines Company
|
$
|
(221,930
|
)
|
|
$
|
319
|
|
|
$
|
23,140
|
|
Loss from discontinued operations, net of tax attributable to The Medicines Company
|
(130,826
|
)
|
|
(32,529
|
)
|
|
(7,628
|
)
|
|||
Net (loss) income attributable to The Medicines Company
|
$
|
(352,756
|
)
|
|
$
|
(32,210
|
)
|
|
$
|
15,512
|
|
|
|
|
|
|
.
|
|
|||||
Weighted average common shares outstanding, basic
|
66,809
|
|
|
64,473
|
|
|
58,096
|
|
|||
Plus: net effect of dilutive stock options, warrants, restricted common shares and shares issuable upon conversion of Notes
|
—
|
|
|
2,195
|
|
|
4,556
|
|
|||
Weighted average common shares outstanding, diluted
|
66,809
|
|
|
66,668
|
|
|
62,652
|
|
|||
|
|
|
|
|
|
||||||
Basic (loss) earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
||||||
(Loss) earnings from continuing operations
|
$
|
(3.32
|
)
|
|
$
|
—
|
|
|
$
|
0.40
|
|
Loss from discontinued operations
|
(1.96
|
)
|
|
(0.50
|
)
|
|
(0.13
|
)
|
|||
Basic (loss) earnings per share
|
$
|
(5.28
|
)
|
|
$
|
(0.50
|
)
|
|
$
|
0.27
|
|
|
|
|
|
|
|
||||||
Diluted (loss) earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
||||||
(Loss) earnings from continuing operations
|
$
|
(3.32
|
)
|
|
$
|
—
|
|
|
$
|
0.37
|
|
Loss from discontinued operations
|
(1.96
|
)
|
|
(0.49
|
)
|
|
(0.12
|
)
|
|||
Diluted (loss) earnings per share
|
$
|
(5.28
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
0.25
|
|
14.
|
Income Taxes
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(5
|
)
|
|
$
|
1,494
|
|
|
$
|
(7,216
|
)
|
State
|
(187
|
)
|
|
(151
|
)
|
|
(238
|
)
|
|||
Foreign
|
(216
|
)
|
|
44
|
|
|
(2,456
|
)
|
|||
|
(408
|
)
|
|
1,387
|
|
|
(9,910
|
)
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
$
|
28,011
|
|
|
$
|
780
|
|
|
$
|
(13,316
|
)
|
State
|
2,140
|
|
|
142
|
|
|
20,954
|
|
|||
Foreign
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
|
30,151
|
|
|
922
|
|
|
7,637
|
|
|||
Total benefit from (provision for) income taxes
|
$
|
29,743
|
|
|
$
|
2,309
|
|
|
$
|
(2,273
|
)
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands)
|
||||||||||
Domestic
|
$
|
(250,915
|
)
|
|
$
|
(1,115
|
)
|
|
$
|
21,583
|
|
International
|
(758
|
)
|
|
(875
|
)
|
|
3,830
|
|
|||
Total
|
$
|
(251,673
|
)
|
|
$
|
(1,990
|
)
|
|
$
|
25,413
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands)
|
||||||||||
Statutory rate applied to pre-tax (loss) income
|
$
|
(88,086
|
)
|
|
$
|
(697
|
)
|
|
$
|
8,895
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|||
State income taxes, net of federal benefit
|
(1,269
|
)
|
|
(1,287
|
)
|
|
(13,466
|
)
|
|||
Foreign
|
287
|
|
|
491
|
|
|
518
|
|
|||
Revaluation of contingent purchase price
|
9,740
|
|
|
1,153
|
|
|
5,192
|
|
|||
Tax credits
|
(305
|
)
|
|
(2,598
|
)
|
|
(6,052
|
)
|
|||
Lobbying costs
|
35
|
|
|
60
|
|
|
—
|
|
|||
Acquisition costs
|
—
|
|
|
198
|
|
|
3,024
|
|
|||
Meals and entertainment
|
824
|
|
|
501
|
|
|
468
|
|
|||
Uncertain tax positions
|
61
|
|
|
(101
|
)
|
|
2,574
|
|
|||
Bargain purchase
|
(7,310
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
1,223
|
|
|
2,680
|
|
|
1,120
|
|
|||
Deferred tax asset adjustment
|
—
|
|
|
(2,709
|
)
|
|
—
|
|
|||
Valuation allowances
|
55,057
|
|
|
—
|
|
|
—
|
|
|||
Income tax (benefit) provision
|
$
|
(29,743
|
)
|
|
$
|
(2,309
|
)
|
|
$
|
2,273
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
115,370
|
|
|
$
|
41,614
|
|
Tax credits
|
17,853
|
|
|
16,830
|
|
||
Intangible assets
|
—
|
|
|
32,752
|
|
||
Stock based compensation
|
23,768
|
|
|
22,427
|
|
||
Other
|
4,721
|
|
|
20,080
|
|
||
Total deferred tax assets
|
161,712
|
|
|
133,703
|
|
||
Valuation allowance
|
(67,890
|
)
|
|
(12,842
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
93,822
|
|
|
120,861
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Fixed assets
|
$
|
(5,011
|
)
|
|
$
|
(5,136
|
)
|
Intangible assets
|
(89,106
|
)
|
|
—
|
|
||
Indefinite lived intangible assets
|
(89,701
|
)
|
|
(187,817
|
)
|
||
Total deferred tax liabilities
|
(183,818
|
)
|
|
(192,953
|
)
|
||
Net deferred tax liabilities
|
$
|
(89,996
|
)
|
|
$
|
(72,092
|
)
|
Year of Expiration
|
|
Federal Net
Operating Loss Carryforwards |
|
Federal Research
and Development Tax Credit Carryforwards |
||||
|
|
(In thousands)
|
||||||
2018-2026
|
|
$
|
—
|
|
|
$
|
—
|
|
2027
|
|
6,256
|
|
|
840
|
|
||
2028
|
|
38,954
|
|
|
2,108
|
|
||
2029
|
|
4,755
|
|
|
1,148
|
|
||
2030
|
|
1,030
|
|
|
1,162
|
|
||
2031
|
|
605
|
|
|
3,097
|
|
||
2032
|
|
1,533
|
|
|
3,622
|
|
||
2033
|
|
37,209
|
|
|
3,178
|
|
||
2034
|
|
4,353
|
|
|
1,861
|
|
||
2035
|
|
203,286
|
|
|
1,500
|
|
||
|
|
$
|
297,981
|
|
|
$
|
18,516
|
|
|
Gross
Unrecognized
Tax Benefits
|
||
|
(In thousands)
|
||
Balance at January 1, 2014
|
$
|
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
|
|
|
Additions related to current year tax positions
|
61
|
|
|
Balance at December 31, 2015
|
$
|
8,900
|
|
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.
|
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. 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 prices associated with the Company's business combinations and convertible debt. The fair value of certain development or regulatory milestone based contingent assets and contingent purchase prices were determined in a discounted cash flow framework by probability weighting the future contractual receivable or 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, 2015
|
|
As of December 31, 2014
|
||||||||||||||||||||||||||||
|
|
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)
|
|
2015
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
2014
|
||||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market
|
|
$
|
6,033
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,033
|
|
|
$
|
6,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,030
|
|
Total assets at fair value
|
|
$
|
6,033
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,033
|
|
|
$
|
6,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,030
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Contingent purchase price
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
123,757
|
|
|
$
|
123,757
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
221,834
|
|
|
$
|
221,834
|
|
Total liabilities at fair value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
123,757
|
|
|
$
|
123,757
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
221,834
|
|
|
$
|
221,834
|
|
|
|
Fair Value as of December 31, 2015
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
(Weighted Average)
|
||
|
|
(In thousands)
|
|
|
|
|
|
|
||
Targanta:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
5,857
|
|
|
Probability-adjusted discounted cash flow
|
|
Probability of success
|
|
20%
|
|
|
|
|
|
|
Periods in which milestone is expected to be achieved
|
|
2020
|
||
|
|
|
|
|
|
Discount rate
|
|
11%
|
||
Incline:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
28,600
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of success
|
|
64% - 72% (67%)
|
|
|
|
|
|
|
Periods in which milestones are expected to be achieved
|
|
2017-2018
|
||
|
|
|
|
|
|
Discount Rate
|
|
18%
|
||
Rempex:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price: commercial milestone
|
|
$
|
63,000
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of success
|
|
11% - 95% (56%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2016 - 2020
|
||
|
|
|
|
|
|
Discount rate
|
|
3.6% - 6.0%
|
||
Contingent purchase price: sales milestone
|
|
$
|
10,300
|
|
|
Risk adjusted revenue simulation
|
|
Probabilities of success
|
|
11% - 63% (30%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2018 - 2022
|
||
|
|
|
|
|
|
Discount rate
|
|
5.5% - 6.7%
|
||
Annovation:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
16,000
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of success
|
|
8% - 50% (31%)
|
|
|
|
|
|
|
Periods in which milestones are expected to be achieved
|
|
2016 - 2030
|
||
|
|
|
|
|
|
Discount rate
|
|
4.1% - 8.2%
|
|
|
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%
|
||
Rempex:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price: commercial milestone
|
|
$
|
80,800
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities 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
|
|
Probabilities of success
|
|
9% - 49% (17%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2016 - 2022
|
||
|
|
|
|
|
|
Discount rate
|
|
1.5% - 4.5%
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In thousands)
|
||||||
Balance at beginning of period
|
$
|
351,134
|
|
|
$
|
302,363
|
|
Fair value of contingent purchase price with respect to Tenaxis as of May 1, 2014
|
—
|
|
|
37,900
|
|
||
Fair value of contingent purchase price with respect to Annovation as of February 2, 2015
|
18,000
|
|
|
—
|
|
||
Settlements
|
(236,418
|
)
|
|
(25,600
|
)
|
||
Allocation to Hemostasis Business
|
(28,600
|
)
|
|
—
|
|
||
Fair value adjustment to contingent purchase price included in net loss
|
19,641
|
|
|
36,471
|
|
||
Balance at end of period
|
$
|
123,757
|
|
|
$
|
351,134
|
|
16.
|
Restructuring Costs and Other, Net
|
|
Balance as
of January 1,
2015
|
|
Expenses,
Net
|
|
Cash
|
|
Noncash
|
|
Balance as of
December 31,
2015
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Employee severance and other personnel benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2014 European workforce reduction
|
$
|
7,694
|
|
|
$
|
(114
|
)
|
|
$
|
(7,057
|
)
|
|
$
|
—
|
|
|
$
|
523
|
|
2014 European leases and equipment write-off
|
200
|
|
|
—
|
|
|
(130
|
)
|
|
(12
|
)
|
|
58
|
|
|||||
Total
|
$
|
7,894
|
|
|
$
|
(114
|
)
|
|
$
|
(7,187
|
)
|
|
$
|
(12
|
)
|
|
$
|
581
|
|
|
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
|
|
17.
|
Commitments and Contingencies
|
Contractual Obligations
(1)
|
|
Less Than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5 Years
|
|
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Inventory related commitments
|
|
$
|
48,866
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48,866
|
|
Research and development
|
|
43,934
|
|
|
5,253
|
|
|
715
|
|
|
—
|
|
|
49,902
|
|
|||||
Operating leases
|
|
7,645
|
|
|
15,548
|
|
|
14,648
|
|
|
41,178
|
|
|
79,019
|
|
|||||
Selling, general and administrative
|
|
4,067
|
|
|
2,348
|
|
|
454
|
|
|
—
|
|
|
6,869
|
|
|||||
Total contractual obligations
|
|
$
|
104,512
|
|
|
$
|
23,149
|
|
|
$
|
15,817
|
|
|
$
|
41,178
|
|
|
$
|
184,656
|
|
(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. It also does not include the long-term debt obligations. See Note 10 "Convertible Senior Notes" for further details.
|
•
|
$49.4 million
due to the former equityholders of Targanta and up to
$25.0 million
in additional payments to other third parties related to the Targanta transaction;
|
•
|
up to
$60.0 million
due to the former equityholders of Incline and up to
$93.0 million
in additional payments to other third parties related to the Incline transaction;
|
•
|
up to
$289.8 million
for the Rempex transaction;
|
•
|
$26.3 million
for the Annovation transaction and up to
$6.5 million
in additional payments to other third parties related to the Annovation transaction;
|
•
|
up to
$170.0 million
for the Alnylam license and collaboration agreement with Alnylam;
|
•
|
up to
$422.0 million
due to the Company's license agreement with Pfizer Inc. related to MDCO-216; and
|
•
|
up to
$50.0 million
due to the Company's license agreement with AstraZeneca related to Kengreal.
|
18.
|
Employee Benefit Plan
|
19.
|
Segment and Geographic Information
|
|
Years Ended December 31,
|
|
|
|||||||||||||||||
|
2015
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|||||||||
|
(In thousands)
|
|
|
|||||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
United States
|
$
|
289,578
|
|
|
93.7
|
%
|
|
$
|
623,112
|
|
|
94.4
|
%
|
|
$
|
566,202
|
|
|
90.6
|
%
|
Europe
|
16,745
|
|
|
5.4
|
%
|
|
32,860
|
|
|
5.0
|
%
|
|
50,420
|
|
|
8.1
|
%
|
|||
Other
|
2,684
|
|
|
0.9
|
%
|
|
3,718
|
|
|
0.6
|
%
|
|
7,986
|
|
|
1.3
|
%
|
|||
Total net revenue
|
$
|
309,007
|
|
|
|
|
|
$
|
659,690
|
|
|
|
|
|
$
|
624,608
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||||
|
2015
|
|
|
|
2014
|
|
|
||||||
|
(In thousands)
|
||||||||||||
Long-lived assets:
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
967,733
|
|
|
99.4
|
%
|
|
$
|
898,971
|
|
|
99.2
|
%
|
Europe
|
6,301
|
|
|
0.6
|
%
|
|
7,439
|
|
|
0.8
|
%
|
||
Other
|
—
|
|
|
—
|
%
|
|
230
|
|
|
—
|
%
|
||
Total long-lived assets
|
$
|
974,034
|
|
|
|
|
|
$
|
906,640
|
|
|
|
|
|
|
Foreign currency translation adjustment
|
|
Unrealized (gain) loss on available for sale securities
|
|
Total
|
||||||
|
|
(In thousands)
|
||||||||||
Balance at January 1, 2013
|
|
$
|
(825
|
)
|
|
$
|
59
|
|
|
$
|
(766
|
)
|
Other comprehensive loss before reclassifications
|
|
(3,876
|
)
|
|
(10
|
)
|
|
(3,886
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income*
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total other comprehensive loss
|
|
(3,876
|
)
|
|
(10
|
)
|
|
(3,886
|
)
|
|||
Balance at December 31, 2013
|
|
$
|
(4,701
|
)
|
|
$
|
49
|
|
|
$
|
(4,652
|
)
|
Other comprehensive income before reclassifications
|
|
7,180
|
|
|
—
|
|
|
7,180
|
|
|||
Amounts reclassified from accumulated other comprehensive income*
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total other comprehensive income
|
|
7,180
|
|
|
—
|
|
|
7,180
|
|
|||
Balance at December 31, 2014
|
|
$
|
2,479
|
|
|
$
|
49
|
|
|
$
|
2,528
|
|
Other comprehensive income before reclassifications
|
|
1,445
|
|
|
—
|
|
|
1,445
|
|
|||
Amounts reclassified from accumulated other comprehensive income*
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total other comprehensive income
|
|
1,445
|
|
|
—
|
|
|
1,445
|
|
|||
Balance at December 31, 2015
|
|
$
|
3,924
|
|
|
$
|
49
|
|
|
$
|
3,973
|
|
*
|
Amounts reclassified affect other income in the accompanying consolidated statements of operations.
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
Mar. 31,
2015 |
|
June 30,
2015 |
|
Sept. 30,
2015 |
|
Dec. 31,
2015 |
|
Mar. 31,
2014 |
|
June 30,
2014 |
|
Sept. 30,
2014 |
|
Dec. 31,
2014 |
||||||||||||||||
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
|
|
(5)
|
|
|
|
(5) (6)
|
||||||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||||||||||||
Net revenue
|
$
|
110,115
|
|
|
$
|
74,519
|
|
|
$
|
57,206
|
|
|
$
|
67,167
|
|
|
$
|
163,741
|
|
|
$
|
167,363
|
|
|
$
|
155,534
|
|
|
$
|
173,052
|
|
Cost of revenue
|
20,538
|
|
|
24,756
|
|
|
49,188
|
|
|
25,449
|
|
|
55,624
|
|
|
71,990
|
|
|
53,794
|
|
|
51,922
|
|
||||||||
Total operating expenses
|
124,606
|
|
|
151,099
|
|
|
163,181
|
|
|
142,594
|
|
|
139,806
|
|
|
188,590
|
|
|
160,487
|
|
|
198,913
|
|
||||||||
(Loss) income from continuing operations
|
(14,491
|
)
|
|
(76,580
|
)
|
|
(105,975
|
)
|
|
(75,427
|
)
|
|
23,935
|
|
|
(21,227
|
)
|
|
(4,953
|
)
|
|
(25,861
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss) from continuing operations attributable to The Medicines Company
|
$
|
4,373
|
|
|
$
|
(67,445
|
)
|
|
$
|
(90,617
|
)
|
|
$
|
(68,241
|
)
|
|
$
|
6,702
|
|
|
$
|
2,929
|
|
|
$
|
(15,092
|
)
|
|
$
|
5,780
|
|
Net income (loss) from discontinued operations, net of tax attributable to The Medicines Company
|
661
|
|
|
20,853
|
|
|
(14,515
|
)
|
|
(137,825
|
)
|
|
(11,698
|
)
|
|
(8,085
|
)
|
|
(1,643
|
)
|
|
(11,103
|
)
|
||||||||
Net income (loss) attributable to The Medicines Company
|
$
|
5,034
|
|
|
$
|
(46,592
|
)
|
|
$
|
(105,132
|
)
|
|
$
|
(206,066
|
)
|
|
$
|
(4,996
|
)
|
|
$
|
(5,156
|
)
|
|
$
|
(16,735
|
)
|
|
$
|
(5,323
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings (loss) per common share attributable to The Medicines Company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Earnings (loss) from continuing operations
|
$
|
0.07
|
|
|
$
|
(1.02
|
)
|
|
$
|
(1.35
|
)
|
|
$
|
(0.99
|
)
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
|
$
|
(0.23
|
)
|
|
$
|
0.09
|
|
Earnings (loss) from discontinued operations
|
0.01
|
|
|
0.31
|
|
|
(0.22
|
)
|
|
(2.00
|
)
|
|
(0.17
|
)
|
|
(0.12
|
)
|
|
(0.03
|
)
|
|
(0.17
|
)
|
||||||||
Diluted earnings (loss) per share
|
$
|
0.08
|
|
|
$
|
(0.71
|
)
|
|
$
|
(1.57
|
)
|
|
$
|
(2.99
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.08
|
)
|
(1)
|
In February 2015, the Company completed the acquisition of Annovation and Annovation became our wholly owned subsidiary. The acquisition of Annovation was accounted for as a step acquisition which required that the fair value of our existing
35.8%
ownership interest (previously accounted for as an equity method investment) be remeasured. The fair value of our interest in Annovation was
$25.9 million
upon the closing of the acquisition, resulting in a non-cash pre-tax gain of
$22.7 million
.
|
(2)
|
In the second quarter of 2015, the Company sold an investment in a specialty pharmaceutical company that had a zero cost basis as the carrying amount was deemed impaired in 2009 and realized a net gain on sale of approximately
$19.8 million
. This amount is reflected in the consolidated statement of operations as a gain on sale of investment in 2015.
|
(3)
|
Net loss for the third quarter of 2015 includes an inventory obsolescence charge of
$16.7 million
and a charge of
$15.7 million
for potential losses on future inventory purchase commitments due primarily to the loss of market exclusivity for Angiomax in the United States.
|
(4)
|
On February 1, 2016, the Company completed the sale of its Hemostasis Business. As a result of the transaction, the Company is accounting for the assets and liabilities of the Hemostasis Business to be sold as held for sale. As a result of the classification as held for sale, we recorded impairment charges of
$133.3 million
, including
$24.5 million
related to goodwill, in the fourth quarter of 2015 to reduce the Hemostasis Business disposal group’s carrying value to its estimated fair value, less costs to sell. See Note 23 “Discontinued Operations” for further details.
|
(5)
|
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)
|
(6)
|
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.
|
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,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands)
|
||||||||||
Net product revenues
|
$
|
65,754
|
|
|
$
|
64,718
|
|
|
$
|
63,256
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Cost of product revenue
|
75,889
|
|
|
54,300
|
|
|
46,149
|
|
|||
Research and development
|
7,568
|
|
|
19,669
|
|
|
8,670
|
|
|||
Selling, general and administrative
|
560
|
|
|
27,210
|
|
|
17,135
|
|
|||
Impairment
|
133,266
|
|
|
—
|
|
|
—
|
|
|||
Total operating expenses
|
217,283
|
|
|
101,179
|
|
|
71,954
|
|
|||
Loss from operations
|
(151,529
|
)
|
|
(36,461
|
)
|
|
(8,698
|
)
|
|||
Other (expense) income, net
|
(745
|
)
|
|
(596
|
)
|
|
157
|
|
|||
Loss from discontinuing operations before income taxes
|
(152,274
|
)
|
|
(37,057
|
)
|
|
(8,541
|
)
|
|||
Benefit for income taxes
|
(21,448
|
)
|
|
(4,528
|
)
|
|
(913
|
)
|
|||
Loss from discontinued operations, net of tax
|
$
|
(130,826
|
)
|
|
$
|
(32,529
|
)
|
|
$
|
(7,628
|
)
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In thousands)
|
||||||
Assets:
|
|
|
|
||||
Inventory
|
$
|
53,765
|
|
|
$
|
2,479
|
|
Prepaid expenses and other current assets
|
1,153
|
|
|
23
|
|
||
Fixed assets, net
|
1,913
|
|
|
—
|
|
||
Intangibles, net
|
374,779
|
|
|
—
|
|
||
Allowance for reduction of assets of business held for sale
|
(108,773
|
)
|
|
—
|
|
||
Total current assets held for sale
|
322,837
|
|
|
2,502
|
|
||
Fixed assets, net
|
—
|
|
|
1,730
|
|
||
Intangibles, net
|
—
|
|
|
328,941
|
|
||
Goodwill
|
—
|
|
|
24,500
|
|
||
Total assets held for sale
|
$
|
322,837
|
|
|
$
|
357,673
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Contingent purchase price - current
|
$
|
28,600
|
|
|
$
|
86,812
|
|
Deferred tax liability
|
38,915
|
|
|
—
|
|
||
Current liabilities held for sale
|
67,515
|
|
|
86,812
|
|
||
Contingent purchase price - long term
|
—
|
|
|
42,488
|
|
||
Deferred tax liability - long term
|
—
|
|
|
59,287
|
|
||
Total liabilities held for sale
|
$
|
67,515
|
|
|
$
|
188,587
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(In thousands)
|
||||||||||
Depreciation from discontinued operations
|
$
|
371
|
|
|
$
|
142
|
|
|
$
|
34
|
|
Amortization from discontinued operations
|
42,278
|
|
|
20,293
|
|
|
14,667
|
|
|||
Impairment charges
|
25,800
|
|
|
—
|
|
|
—
|
|
|||
Reserve for excess or obsolete inventory
|
876
|
|
|
—
|
|
|
—
|
|
|||
Change in contingent consideration obligation
|
8,743
|
|
|
7,400
|
|
|
1,000
|
|
|||
Capital expenditures
|
738
|
|
|
1,178
|
|
|
721
|
|
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. (incorporated by reference to Exhibit 2.3 to the registrant's Annual Report on Form 10-K, filed March 2, 2015)
|
|
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 registrant, 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).
|
|
2.8#†
|
|
Purchase and Sale Agreement dated as of December 18, 2015 among the registrant and Mallinckrodt Hospital Products Inc., Mallinckrodt Group Sarl and Mallinckrodt Pharmaceuticals Ireland Limited (incorporated by reference to Exhibit 2.1 to the registrant’s current report on Form 8-K filed February 3, 2016).
|
|
3.1
|
|
Third Amended and Restated Certificate of Incorporation 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, 2015).
|
|
3.2
|
|
Second Amended and Restated Bylaws of the registrant (filed as Exhibit 3.1 to the registrant’s current report on Form 8-K, filed December 23, 2015).
|
|
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).
|
Number
|
|
Description
|
|
|
|
|
|
|
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).
|
|
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†
|
|
Seventh Amendment to Second Amended and Restated Distribution Agreement, effective March 5, 2015, by and 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 March 31, 2015).
|
|
10.17
|
|
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).
|
|
10.18†
|
|
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).
|
|
10.19†
|
|
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).
|
|
10.20†
|
|
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).
|
Number
|
|
Description
|
|
|
|
|
|
|
10.21†
|
|
Amendment to Contract Manufacturing Agreement, dated February 20, 2013, between registrant and Fresenius Kabi USA, LLC (successor in interest to APP Pharmaceuticals, LLC) (filed herewith)
|
|
10.22†
|
|
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).
|
|
10.23†
|
|
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).
|
|
10.24†
|
|
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).
|
|
10.25†
|
|
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).
|
|
10.26†
|
|
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).
|
|
10.27†
|
|
Amendment 2 to the Supply Agreement, dated July 1, 2015, between registrant and Teva API, Inc. (formerly known as Plantex 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, 2015).
|
|
10.28†
|
|
Supply and Distribution Agreement, dated July 2, 2015, by and between registrant and Sandoz Inc., as amended by Amendment No. 1 dated July 16, 2015 (incorporated by reference to Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q for the quarter ended September 30, 2015).
|
|
10.29†
|
|
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).
|
|
10.30†
|
|
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).
|
|
10.31†
|
|
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).
|
|
10.32†
|
|
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)).
|
|
10.33
|
|
First Amendment to Chemilog Development and Supply Agreement, dated August 1, 2005, between registrant and UCB S.A. (filed herewith)
|
|
10.34†
|
|
Second Amendment to Chemilog Development and Supply Agreement, dated June 11, 2015, between registrant and Lonza Sales Ltd. (filed herewith)
|
|
10.35†
|
|
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).
|
Number
|
|
Description
|
|
|
|
|
|
|
10.36†
|
|
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).
|
|
10.37
|
|
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).
|
|
10.38
|
|
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).
|
|
10.39†
|
|
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).
|
|
10.40†
|
|
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).
|
|
10.41†
|
|
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).
|
|
10.42*
|
|
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)).
|
|
10.43*
|
|
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).
|
|
10.44*
|
|
Form of Amended and Restated Management Severance Agreement (2 year vesting) (incorporated by reference to Exhibit 10.2 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2015).
|
|
10.45*
|
|
Form of Amended and Restated Management Severance Agreement (1 year vesting) (incorporated by reference to Exhibit 10.3 to the registrant’s quarterly report on Form 10-Q for the quarter ended June 30, 2015).
|
|
10.46*
|
|
Form of Amendment to Amended and Restated Management Severance Agreement (filed herewith)
|
|
10.47*
|
|
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).
|
|
10.48*
|
|
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).
|
|
10.49*
|
|
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).
|
|
10.50*
|
|
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).
|
|
10.51*
|
|
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).
|
Number
|
|
Description
|
|
|
|
|
|
|
10.52*
|
|
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).
|
|
10.53*
|
|
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).
|
|
10.54*
|
|
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)).
|
|
10.55*
|
|
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).
|
|
10.56*
|
|
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).
|
|
10.57*
|
|
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)).
|
|
10.58*
|
|
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).
|
|
10.59*
|
|
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).
|
|
10.60*
|
|
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).
|
|
10.61*
|
|
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).
|
|
10.62*
|
|
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).
|
|
10.63*
|
|
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).
|
|
10.64*
|
|
Amendment No. 2 to The Medicines Company 2013 Stock Incentive Plan (incorporated by reference as Exhibit 10.1 to the registrant’s current report on Form 8-K, filed June 2, 2015).
|
|
10.65*
|
|
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).
|
|
10.66*
|
|
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).
|
|
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).
|
|
10.68*
|
|
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).
|
|
10.69
|
|
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).
|
|
10.70
|
|
Investment Agreement, dated as of August 25, 2015, by and among the registrant, Eshelman Ventures, LLC, and, solely for purposes of Article IV and Article V of the Investment Agreement, Fredric N. Eshelman, Pharm.D. (incorporated by reference to Exhibit 10.1 of the registrant’s current report on Form 8-K, filed August 31, 2015).
|
|
10.71
|
|
Form of Indemnity Agreement for Directors and Executive Officers of the registrant, as approved and adopted on December 18, 2015 (incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K, filed December 23, 2015).
|
|
21
|
|
Subsidiaries of the registrant. (filed herewith)
|
Number
|
|
Description
|
|
|
|
|
|
|
23
|
|
Consent of Ernst & Young LLP, Independent Registered Accounting Firm. (filed herewith)
|
|
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)
|
|
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
|
|
The following materials from The Medicines Company Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive (Loss) Income, (iv) the Consolidated Statements of Stockholders' Equity, (v) the Consolidated Statements of Cash Flows, and (vi) 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.
|
|
|
|
*
|
|
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
|
|
|
|
†
|
|
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.
|
|
|
|
|
Beginning Balance
|
|
Charged to cost and expense
|
|
Deductions
|
|
Ending Balance
|
||||||||
|
(In thousands)
|
||||||||||||||
Year ended December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Allowance for excess slow-moving and obsolete inventory
|
$
|
4,691
|
|
|
$
|
30,547
|
|
|
$
|
(5,295
|
)
|
|
$
|
29,943
|
|
Year ended December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Allowance for excess slow-moving and obsolete inventory
|
$
|
675
|
|
|
$
|
7,981
|
|
|
$
|
(3,965
|
)
|
|
$
|
4,691
|
|
Year ended December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Allowance for excess slow-moving and obsolete inventory
|
$
|
877
|
|
|
$
|
125
|
|
|
$
|
(327
|
)
|
|
$
|
675
|
|
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Double asterisks denote omissions.
|
Exhibit 10.21
|
Calendar Year
|
Fresenius Kabi
|
MDCO
|
2012
|
[**]
|
[**]
|
2013
|
[**]
|
[**]
|
2014
|
[**]
|
[**]
|
2015
|
[**]
|
[**]
|
2016
|
[**]
|
[**]
|
2017
|
[**]
|
[**]
|
Total
|
[**]
|
[**]
|
Development Costs and Expenses Total
|
$[**]
|
Calendar Year
|
Fresenius Kabi
|
MDCO
|
2012
|
[**]
|
[**]
|
2013
|
[**]
|
[**]
|
2014
|
[**]
|
[**]
|
2015
|
[**]
|
[**]
|
2016
|
[**]
|
[**]
|
2017
|
[**]
|
[**]
|
Total
|
[**]
|
[**]
|
Capital Expenditures Total
|
$[**]
|
SCHEDULE D
DEVELOPMENT COSTS AND EXPENSES
|
|||
Transfer Expense
|
Cost per Unit
|
Unit
|
Total
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
Total
|
$[**]
|
SCHEDULE E
CAPITAL EXPENDITURES
|
|||
CapEx
|
Cost per Unit
|
Unit
|
Total
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
|
Total
|
$[**]
|
1.
|
ARTICLE 8 - FORECASTS AND ORDERS FOR THE PRODUCT is deleted in its entirety and the following is substituted therefor:
|
8.1
|
Forecasts
|
8.1.1
|
Except as set forth in 8.1.2 below, on each July 1 during the remainder of the term of this Agreement (each, a “Base Volume Forecast Date”), TMC shall submit to UCB a forecast (each, a “Forecast”) of the amount of Product to be purchased by TMC in the calendar year commencing eighteen (18) months after the Base Volume Forecast Date (the “Forecast Year”). Fifty percent (50%) of the amount of Product specified in each Forecast shall be referred to as the “Base Volume.” Each Forecast shall constitute a binding purchase order for the Base Volume specified therein, and UCB agrees to supply and TMC agrees to purchase such Base Volume. UCB shall supply the Base Volume over the course of the Forecast Year on a delivery schedule to be agreed upon. The remaining fifty percent (50%) of Product specified in each Forecast is non-binding and shall be referred to as the “Variable Volume.”
|
8.1.2
|
On July 1, 2005 only, TMC shall submit to UCB a forecast of the amount of Product to be purchased by TMC for the calendar year beginning January 1, 2007 (the “2007 Forecast”). The 2007 Forecast shall be binding as to twenty-six percent (26%) of the applicable API price for the raw materials needed to manufacture the Base Volume required by the 2007 Forecast. On January 1, 2006, TMC shall have the right to reduce the 2007 Forecast (the “Adjusted 2007 Forecast”) at which time TMC shall be bound to the Base Volume specified in the Adjusted 2007 Forecast. If TMC reduces the 2007 Forecast, it shall remain obligated for twenty-six percent (26%) of the applicable API price for the raw materials purchased by UCB to manufacture the Base Volume required by the 2007 Forecast. To the extent any raw materials remain after manufacture of the Product pursuant to the Adjusted 2007 Forecast, UCB shall credit such raw materials against Product ordered by TMC on future Base Volume Forecast Date.
|
8.2
|
Beginning on April 1, 2006 and continuing on each January 1, April 1, July 1 and October 1 thereafter during the remainder of this Agreement (each, a “Variable Forecast Date”), TMC may place a firm order to purchase up to 33% of the Variable Volume for a Forecast Year to be delivered in the fourth calendar quarter after the Variable Forecast Date. The aggregate amount of Product ordered on the Variable Forecast Dates in any calendar year may not exceed the Variable Volume for the applicable Forecast Year.
|
8.3
|
All Product shall be manufactured by UCB at its Braine l’Alleud, Belgium facility using the approved Chemilog manufacturing process registered and subsequently updated with relevant regulatory authorities. UCB agrees to reserve capacity at its Braine l’Alleud, Belgium facility so as to ensure it is able in any calendar year to manufacture at least the quantity of Product supplied to TMC in the preceding calendar year. UCB shall make its best commercial efforts to manufacture any additional quantities that TMC might forecast in a given calendar year and shall inform TMC in writing of its inability to meet any Base Volume or Variable Volume specified in a Forecast within thirty (30) days of the receipt of such Forecast.
|
2.
|
ARTICLE 21- EXCLUSIVITY OF SUPPLY the following Section 21.3 is added
|
21.3
|
UCB agrees that it will not supply any Product to any third party during the term of this Agreement.
|
3.
|
Except as expressly amended herein, the Supply Agreement remains in full force and effect and the Parties hereby ratify and confirm all of the terms and conditions thereof.
|
THE MEDICINES COMPANY
|
UCB S.A.
|
By:
/s/ John D. Richards
Name: John D. Richards Title: Vice President Manufacturing OP |
By:
/s/ A. Jorden
Name: A. Jorden Title: President UCB Bioproducts |
|
By:
/s/ Cleo Ricci
Name: Cleo Ricci Title: B.U. Director
P.O. Alan Scarso
|
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Double asterisks denote omissions.
|
Exhibit 10.34
|
1.
|
Article 1 of the Supply Agreement is amended as follows:
|
(a)
|
Sections 1.8 and 1.9 are deleted in their entirety and the following are substituted therefor:
|
1.8
|
“Product”
shall mean the fully chemically synthesized Bivalirudin API, manufactured by Lonza either through the Chemilog process or the SPPS process and, for the avoidance of doubt, includes both Chemilog Product and SPPS Product.
|
1.9
|
“Specifications”
shall mean the Chemilog Specifications and the SPPS Specifications.
|
(b)
|
New Sections 1.12, 1.13, 1.14, 1.15, 1.16, 1.17, 1.18, 1.19, 1.20 and 1.21 are added to the Supply Agreement as follows:
|
1.12
|
“SPPS”
shall mean the process known as SPPS by which Bivalirudin is manufactured by Lonza using a solid phase peptide synthesis. As between the Parties, it is agreed the solid phase synthesis process used by Lonza is Lonza Technical Information.
|
1.13
|
“Chemilog Product”
shall mean Product produced using the Chemilog process.
|
1.14
|
“SPPS Product”
shall mean Product produced using the SPPS process.
|
1.15
|
“Chemilog Specifications”
shall mean the specifications for Chemilog Product, as set out in Annex 2 to this Second Amendment.
|
1.16
|
“SPPS Specifications”
shall mean the specifications for SPPS Product, as set out in Annex 2 to this Second Amendment.
|
1.18
|
“
MDCO Intellectual Property”
means any Intellectual Property relating to
bivalirudin
either (i) owned or controlled by MDCO prior to the Effective Date of this amendment or (ii) developed or acquired by MDCO independently from Lonza during the Term of the Supply Agreement.
|
1.19
|
“Intellectual Property”
means (i) inventions (whether or not patentable), patents, trade secrets, copyrights, trademarks, trade names and domain names, rights in designs, rights in computer software, database rights, rights in confidential information (including know-how) and any other intellectual property rights, in each case whether registered or unregistered, (ii) all applications (or rights to apply) for, and renewals or extensions of, any of the rights described in the foregoing clause (i) and (iii) and all rights and applications that are similar or equivalent to the rights and application described in the foregoing clauses (i) and (ii), which exist now, or which come to exist in the future, in any part of the world.
|
1.20
|
“LOI”
means the Letter of Intent between the Parties dated 15 December 2011 (as amended) for the development and validation of SPPS.
|
1.21
|
“Services"
means all or any part of the services to be performed by Lonza under this Supply Agreement (including, without limitation, scale-up activities, validation, clinical and commercial manufacturing, as well as quality control and quality assurance activities).
|
2.
|
Article 2 of the Supply Agreement is amended as follows:
|
(a)
|
Section 2.1 is amended as follows:
|
(i)
|
The first sentence of Section 2.1 is deleted and the following is substituted therefor:
|
(b)
|
Section 2.2 is deleted in its entirety and the following is substituted therefor:
|
(c)
|
The following Section 2.3 is added: Lonza shall be entitled to instruct one or more of its Affiliates to perform any of Lonza’s obligations contained in this Supply Agreement, but Lonza shall remain fully responsible to MDCO in respect of those obligations.
|
3.
|
Articles 3, 4, 5, 6 and 7 of the Supply Agreement are deleted.
|
4.
|
Article 8 of the Supply Agreement is deleted in its entirety and the following is substituted therefor:
|
8.1
|
By the 1
st
business day of each October and April, MDCO shall submit to Lonza a good faith, [**] month rolling forecast (the “Forecast”), The initial month of the Forecast shall be the first month of the next quarter, (ie, the October forecast commences January and the April forecast commences July). The first [**] months of the Forecast shall be considered binding (“Binding Forecast Period”).
|
8.2
|
Lonza shall confirm the delivery date(s) and quantity of Product to be delivered as set out in each Purchase Order within ten (10) business days of receipt from MDCO of the relevant Purchase Order. Upon confirmation, each Purchase Order will be regarded by the Parties as a binding commitment by Lonza to manufacture and to deliver to MDCO the relevant quantity of Product according to the requirements set out in such Purchase Order. Any delivery date set forth in Lonza’s written confirmation of a Purchase Order shall be an estimated delivery date and Lonza shall make all efforts to meet that date within a 30 day variance. Any additional or inconsistent terms or conditions of any MDCO Purchase Order, acknowledgement or similar standardized form given or received pursuant to this
|
8.3
|
ln March and September of each year during the Term of this agreement, Lonza and MDCO shall review the quantity of raw materials purchased for the Forecast and determine if such purchases were appropriate in light of the previous Binding Forecast Period. Discrepancies will be discussed, agreed to and Lonza will invoice MDCO for the costs of the agreed upon excess raw materials if any.
|
8.4
|
From [**] onwards, all Product delivered to MDCO shall be manufactured by Lonza using SPPS unless agreed in writing otherwise by the Parties.
|
5.
|
Article 9 of the Supply Agreement is deleted in its entirety and the following is substituted therefor:
|
9.1
|
In consideration for the manufacture of Chemilog Product and subject to Article 8, MDCO shall pay Lonza the amount of US$[**] per gram of Chemilog Product manufactured and delivered to MDCO. Unless otherwise agreed by the Parties, Lonza shall not be required to manufacture or deliver any Chemilog Product after [**].
|
9.2
|
In consideration for the manufacture of SPPS Product and subject to Article 8, MDCO shall pay Lonza as follows for the annual quantities ordered on the Purchase Order and delivered in the calendar year:
|
Quantity (kg)
|
Price (Euros/kg)
|
[**] kg
|
(i) [**]
|
[**] kg
|
(ii) [**]
|
[**] kg
|
(iii) [**]
|
[**] kg or greater
|
(iv) [**]
|
6.
|
Article 10 of the Supply Agreement is deleted in its entirety and the following is substituted therefor:
|
10.1
|
Unless otherwise indicated in writing by Lonza, all prices and charges are exclusive of value added tax (VAT) and of any other applicable taxes, levies, import, duties and fees of whatever nature imposed by or under the authority of any government or public authority and all such charges shall be paid by MDCO.
|
10.2
|
Lonza shall issue invoices to MDCO upon release by MDCO’s quality assurance department of the applicable Product, but no later than thirty (30) days after release by Lonza’s quality assurance department. Lonza’s release documentation provided to MDCO will include by lot a deviation list, QA & QC reports, a CoC and a CoA. All invoices are strictly net and payment must be made within thirty (30) days of date of invoice. Payment shall be made without deduction, deferment, set-off, lien or counterclaim.
|
10.3
|
If in default of payment of any undisputed invoice on the due date, interest shall accrue on any amount overdue at the lesser of (i) rate of two percent (2%) per month above the London Interbank Offered Rate (LIBOR) or (ii) the maximum rate allowable by applicable law, interest to accrue on a day to day basis until full payment; and Lonza shall, at its sole discretion, and without prejudice to any other of its accrued rights, be entitled to suspend the delivery of Product until all overdue amounts have been paid in full including interest for late payments.
|
10.4
|
Price adjustments.
|
(a)
|
Not more than once per calendar year commencing [**], Lonza may adjust the price of Product in accordance with the European Union Manufacturing Producer Prices Index (or any successor index) increase for the previous calendar year. The new price reflecting such price adjustment shall be effective for any Product for which the scheduled manufacturing commencement date is on or after the date of Lonza’s notice to MDCO of the price adjustment.
|
(b)
|
In addition to the above, the price may be changed by Lonza, upon reasonable prior written notice to MDCO (providing reasonable detail in support thereof), to reflect (i) an increase in variable costs (such as energy or raw materials) by more than [**] percent ([**]%) (based on the initial price or any previously amended price), or for a process adjustment or assumption changes, and (ii) any material change in an environmental, safety or regulatory standard that substantially impacts Lonza’s cost and ability to manufacture the Product.
|
7.
|
Article 11 of the Supply Agreement is deleted in its entirety and the following is substituted therefor:
|
8.
|
A new Section 12.4 is added to the Supply Agreement as follows:
|
12.4
|
Notwithstanding Section 12.3, SPPS Product shall only be required to conform to the SPPS Specification, and Chemilog Product shall only be required to conform to the Chemilog Specifications.
|
9.
|
Article 13 of the Supply Agreement is deleted in its entirety.
|
10.
|
Section 18.1 of the Supply Agreement is deleted in its entirety and the following is substituted therefor:
|
18.1
|
Unless otherwise terminated in accordance with the terms herein, this Agreement shall be effective as from the date of signature and shall continue until 31 December 2019 (the “Initial Term”). Thereafter, the Agreement shall be extended for further successive terms of three (3) years each (each, a “Renewal Term”), unless either Party gives written notice of termination at least eighteen (18) months prior to expiration of the Initial Term or any Renewal
Term
. The Initial Term and the Renewal Terms, if any, are referred to collectively herein as the “Term”.
|
11.
|
Article 20 of the Supply Agreement is deleted in its entirety and the following is substituted therefor:
|
12.
|
Article 21 of the Supply Agreement is deleted in its entirety and the following is substituted therefor:
|
|
During the Term of the Supply Agreement, provided that [**] generic lyophilized bivalirudin ANDA products or other lyophilized bivalirudin products from an equivalent generic approval process in any jurisdiction have received market approval from a relevant regulatory body: (i) Lonza shall be permitted to [**], (ii) MDCO shall no longer be required to [**] under this Agreement, and (iii) the Parties shall promptly [**].
|
14.
|
Article 22 of the Supply Agreement is amended as follows:
|
(a)
|
Lonza hereby grants MDCO a non-exclusive, worldwide license to use Lonza Background IP during the Term and thereafter for the purpose of manufacturing and selling drug product manufactured using Product purchased from Lonza.
|
(b)
|
MDCO hereby grants Lonza a non-exclusive, worldwide license to use MDCO Intellectual Property during the Term for the purpose of fulfilling Lonza’s obligations under this Agreement.
|
15.
|
Article 24 of the Supply Agreement is amended as follows:
|
16.
|
The first paragraph of Article 29 of the Supply Agreement is deleted in its entirety and the following is substituted therefor:
|
16.
|
Article 30 of the Supply Agreement is deleted in its entirety and the following is substituted therefor:
|
17.
|
Annex 2 to the Agreement is deleted in its entirety and replaced with the Annex 2 attached to this Second Amendment.
|
18.
|
Except as expressly amended herein, the Supply Agreement remains in full force and effect and the Parties hereby ratify and confirm all of the terms and conditions thereof.
|
A.
|
Chemilog Specifications
|
B.
|
SPPS Specifications
|
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
|
Rempex London Limited
|
England and Wales
|
Rempex Pharmaceuticals, Inc.
|
Delaware
|
Targanta Therapeutics Corporation
|
Delaware
|
Targanta Therapeutics Inc.
|
Canada
|
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 (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
|
(1)
|
Registration Statement (Form S-3 ASR No. 333-190568),
|
(2)
|
Registration Statement (Form S-8 No. 333-116295) pertaining to the 2004 Stock Incentive Plan,
|
(3)
|
Registration Statement (Form S-8 No. 333-135460) pertaining to the 2004 Stock Incentive Plan,
|
(4)
|
Registration Statement (Form S-8 No. 333-148602) pertaining to the 2007 Equity Inducement Plan,
|
(5)
|
Registration Statement (Form S-8 No. 333-152105) pertaining to the Amended and Restated 2004 Stock Incentive Plan,
|
(6)
|
Registration Statement (Form S-8 No. 333-157499) pertaining to the 2009 Equity Inducement Plan,
|
(7)
|
Registration Statement (Form S-8 No. 333-167895) pertaining to the Amended and Restated 2004 Stock Incentive Plan,
|
(8)
|
Registration Statement (Form S-8 No. 333-167896) pertaining to the 2010 Employee Stock Purchase Plan,
|
(9)
|
Registration Statement (Form S-8 No. 333-189710) pertaining to the 2013 Stock Incentive Plan,
|
(10)
|
Registration Statement (Form S-8 No. 333-197986) pertaining to the 2013 Stock Incentive Plan,
|
(11)
|
Registration Statement (Form S-8 No. 333-206250) pertaining to the 2013 Stock Incentive Plan;
|
|
|
/s/
Clive A. Meanwell
|
|
|
Clive A. Meanwell
|
|
|
Chief Executive Officer
|
|
|
|
Dated:
|
February 29, 2016
|
|
|
|
/s/
William B. O'Connor
|
|
|
William B. O'Connor
|
|
|
Chief Financial Officer
|
|
|
|
Dated:
|
February 29, 2016
|
|
|
|
By:
|
/s/
Clive A. Meanwell
|
|
|
|
Clive A. Meanwell
|
|
|
|
Chief Executive Officer
|
|
|
|
|
Dated:
|
February 29, 2016
|
|
|
|
|
By:
|
/s/
William B. O'Connor
|
|
|
|
William B. O'Connor
|
|
|
|
Chief Financial Officer
|
|
|
|
|
Dated:
|
February 29, 2016
|
|
|