þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
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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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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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EX-10.1
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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
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September 30,
2016 |
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December 31,
2015 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
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$
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600,356
|
|
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$
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373,173
|
|
Accounts receivable, net of allowances of approximately $4.0 million and $17.6 million at
September 30, 2016 and December 31, 2015 |
28,355
|
|
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52,328
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|
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Inventory
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70,654
|
|
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64,584
|
|
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Prepaid expenses and other current assets
|
18,006
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|
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19,995
|
|
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Current assets held for sale
|
—
|
|
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322,837
|
|
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Total current assets
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717,371
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|
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832,917
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|
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Fixed assets, net
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32,450
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34,780
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|
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Intangible assets, net
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621,690
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|
636,220
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|
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Goodwill
|
255,629
|
|
|
289,441
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|
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Restricted cash
|
5,050
|
|
|
1,428
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|
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Contingent purchase price from sale of businesses
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143,700
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|
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—
|
|
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Other assets
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743
|
|
|
730
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|
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Total assets
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$
|
1,776,633
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$
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1,795,516
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
18,734
|
|
|
$
|
36,038
|
|
Accrued expenses
|
81,531
|
|
|
128,558
|
|
||
Current portion of contingent purchase price
|
39,800
|
|
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26,800
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|
||
Convertible senior notes
|
53,054
|
|
|
255,473
|
|
||
Deferred revenue
|
14,139
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|
|
19,863
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|
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Current liabilities held for sale
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—
|
|
|
67,515
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|
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Total current liabilities
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207,258
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|
|
534,247
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|
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Contingent purchase price
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89,610
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96,957
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|
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Convertible senior notes
|
617,490
|
|
|
312,107
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|
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Deferred tax liabilities
|
88,350
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|
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89,996
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|
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Other liabilities
|
10,879
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13,346
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|
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Total liabilities
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1,013,587
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1,046,653
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Equity component of currently redeemable convertible senior notes (Note 10)
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1,641
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17,089
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|
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Stockholders’ equity:
|
|
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|
||||
Preferred stock, $1.00 par value per share, 5,000,000 shares authorized; no shares issued and outstanding
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—
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—
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Common stock, $0.001 par value per share, 187,500,000 authorized; 72,983,092 issued and 70,790,110 outstanding at September 30, 2016 and 71,767,371 issued and 69,574,389 outstanding at December 31, 2015
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73
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|
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72
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|
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Additional paid-in capital
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1,243,463
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1,208,058
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Treasury stock, at cost; 2,192,982 shares at September 30, 2016 and December 31, 2015
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(50,000
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)
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(50,000
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)
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Accumulated deficit
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(426,132
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)
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|
(429,865
|
)
|
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Accumulated other comprehensive (loss) income
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(5,484
|
)
|
|
3,973
|
|
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Total The Medicines Company stockholders’ equity
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761,920
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|
|
732,238
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|
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Non-controlling interest in joint venture
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(515
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)
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(464
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)
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Total stockholders’ equity
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761,405
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|
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731,774
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Total liabilities and stockholders’ equity
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$
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1,776,633
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$
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1,795,516
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
||||||||||||
|
2016
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2015
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2016
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|
2015
|
||||||||
Net product revenues
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$
|
18,843
|
|
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$
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32,703
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$
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80,542
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$
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217,337
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Royalty revenues
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18,756
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24,503
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62,094
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|
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24,503
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Total net revenues
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37,599
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57,206
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142,636
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241,840
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|
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Operating expenses:
|
|
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|
|
|
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||||||||
Cost of product revenues
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20,777
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|
|
49,188
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|
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54,804
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|
|
94,482
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|
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Research and development
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23,537
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27,102
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94,595
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|
|
83,420
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|
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Selling, general and administrative
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69,022
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86,892
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242,478
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|
|
260,986
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|
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Total operating expenses
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113,336
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|
|
163,182
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|
|
391,877
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|
|
438,888
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|
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Loss from operations
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(75,737
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)
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(105,976
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)
|
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(249,241
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)
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(197,048
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)
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Co-promotion and license income
|
757
|
|
|
985
|
|
|
3,073
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10,011
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|
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Gain on remeasurement of equity investment
|
—
|
|
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—
|
|
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—
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|
|
22,597
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|
||||
Gain on sale of investment
|
—
|
|
|
—
|
|
|
—
|
|
|
19,773
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|
||||
Gain on sale of assets
|
—
|
|
|
—
|
|
|
288,301
|
|
|
—
|
|
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Loss on extinguishment of debt
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—
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|
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—
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|
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(5,380
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)
|
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—
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Legal settlement
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—
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5,000
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|
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—
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|
|
5,000
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|
||||
Interest expense
|
(12,089
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)
|
|
(9,547
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)
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(32,198
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)
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(27,510
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)
|
||||
Other income (loss)
|
865
|
|
|
(89
|
)
|
|
741
|
|
|
609
|
|
||||
(Loss) income from continuing operations before income taxes
|
(86,204
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)
|
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(109,627
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)
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5,296
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|
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(166,568
|
)
|
||||
(Provision) benefit for income taxes
|
(163
|
)
|
|
19,001
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|
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(220
|
)
|
|
12,895
|
|
||||
Net (loss) income from continuing operations
|
(86,367
|
)
|
|
(90,626
|
)
|
|
5,076
|
|
|
(153,673
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
96
|
|
|
(14,515
|
)
|
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(1,390
|
)
|
|
6,999
|
|
||||
Net (loss) income
|
(86,271
|
)
|
|
(105,141
|
)
|
|
3,686
|
|
|
(146,674
|
)
|
||||
Net loss (income) attributable to non-controlling interest
|
13
|
|
|
9
|
|
|
50
|
|
|
(16
|
)
|
||||
Net (loss) income attributable to The Medicines Company
|
$
|
(86,258
|
)
|
|
$
|
(105,132
|
)
|
|
$
|
3,736
|
|
|
$
|
(146,690
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts attributable to The Medicines Company:
|
|
|
|
|
|
|
|
||||||||
Net (loss) income from continuing operations
|
$
|
(86,354
|
)
|
|
$
|
(90,617
|
)
|
|
$
|
5,126
|
|
|
$
|
(153,689
|
)
|
Income (loss) from discontinued operations, net of tax
|
96
|
|
|
(14,515
|
)
|
|
(1,390
|
)
|
|
6,999
|
|
||||
Net (loss) income attributable to The Medicines Company
|
$
|
(86,258
|
)
|
|
$
|
(105,132
|
)
|
|
$
|
3,736
|
|
|
$
|
(146,690
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic (loss) earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
|
|
||||||||
(Loss) earnings from continuing operations
|
$
|
(1.23
|
)
|
|
$
|
(1.35
|
)
|
|
$
|
0.07
|
|
|
$
|
(2.33
|
)
|
(Loss) earnings from discontinued operations
|
—
|
|
|
(0.22
|
)
|
|
(0.02
|
)
|
|
0.11
|
|
||||
Basic (loss) earnings per share
|
$
|
(1.23
|
)
|
|
$
|
(1.57
|
)
|
|
$
|
0.05
|
|
|
$
|
(2.22
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per common share attributable to The Medicines Company:
|
|
|
|
|
|
|
|
||||||||
(Loss) earnings from continuing operations
|
$
|
(1.23
|
)
|
|
$
|
(1.35
|
)
|
|
$
|
0.07
|
|
|
$
|
(2.33
|
)
|
(Loss) earnings from discontinued operations
|
—
|
|
|
(0.22
|
)
|
|
(0.02
|
)
|
|
0.11
|
|
||||
Diluted (loss) earnings per share
|
$
|
(1.23
|
)
|
|
$
|
(1.57
|
)
|
|
$
|
0.05
|
|
|
$
|
(2.22
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
70,194
|
|
|
67,137
|
|
|
69,711
|
|
|
66,079
|
|
||||
Diluted
|
70,194
|
|
|
67,137
|
|
|
72,920
|
|
|
66,079
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net (loss) income
|
$
|
(86,271
|
)
|
|
$
|
(105,141
|
)
|
|
$
|
3,686
|
|
|
$
|
(146,674
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(70
|
)
|
|
(1,095
|
)
|
|
208
|
|
|
859
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
(9,665
|
)
|
|
—
|
|
||||
Other comprehensive (loss) income
|
(70
|
)
|
|
(1,095
|
)
|
|
(9,457
|
)
|
|
859
|
|
||||
Comprehensive loss
|
(86,341
|
)
|
|
(106,236
|
)
|
|
(5,771
|
)
|
|
(145,815
|
)
|
||||
Less: comprehensive loss (income) attributable to non-controlling interest
|
13
|
|
|
9
|
|
|
50
|
|
|
(16
|
)
|
||||
Comprehensive loss attributable to The Medicines Company
|
$
|
(86,328
|
)
|
|
$
|
(106,227
|
)
|
|
$
|
(5,721
|
)
|
|
$
|
(145,831
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
3,686
|
|
|
$
|
(146,674
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
22,517
|
|
|
24,180
|
|
||
Asset impairment charges
|
—
|
|
|
29,413
|
|
||
Amortization of debt discount
|
19,392
|
|
|
17,532
|
|
||
Unrealized foreign currency transaction gains, net
|
(125
|
)
|
|
(576
|
)
|
||
Stock compensation expense
|
24,541
|
|
|
23,973
|
|
||
Gain on sale of businesses
|
(289,305
|
)
|
|
—
|
|
||
Loss on disposal of fixed assets
|
1
|
|
|
543
|
|
||
Deferred tax benefit
|
(1,661
|
)
|
|
(43,393
|
)
|
||
Extinguishment of debt
|
5,380
|
|
|
—
|
|
||
Gain on sale of investment
|
—
|
|
|
(19,773
|
)
|
||
Gain on remeasurement of equity investment
|
—
|
|
|
(22,597
|
)
|
||
Reserve for excess or obsolete inventory
|
7,350
|
|
|
40,837
|
|
||
Changes in contingent consideration obligations
|
13,573
|
|
|
14,423
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accrued interest receivable
|
(13
|
)
|
|
—
|
|
||
Accounts receivable
|
24,125
|
|
|
115,797
|
|
||
Inventory, net
|
(14,077
|
)
|
|
(57,783
|
)
|
||
Prepaid expenses and other current assets
|
1,920
|
|
|
(7,378
|
)
|
||
Accounts payable
|
(17,265
|
)
|
|
(2,113
|
)
|
||
Accrued expenses
|
(49,110
|
)
|
|
(21,655
|
)
|
||
Deferred revenue
|
(5,761
|
)
|
|
25,161
|
|
||
Payments on contingent purchase price
|
—
|
|
|
(49,192
|
)
|
||
Other liabilities
|
(6,153
|
)
|
|
(6,186
|
)
|
||
Net cash used in operating activities
|
(260,985
|
)
|
|
(85,461
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Proceeds from sale of fixed assets
|
—
|
|
|
250
|
|
||
Proceeds from sale of investment
|
—
|
|
|
19,773
|
|
||
Purchases of fixed assets
|
(920
|
)
|
|
(2,421
|
)
|
||
Acquisition of business, net of cash acquired
|
—
|
|
|
(28,397
|
)
|
||
Payments for intangible assets
|
(10,000
|
)
|
|
(112,617
|
)
|
||
Proceeds from sale of businesses
|
437,875
|
|
|
—
|
|
||
Change in restricted cash
|
(3,660
|
)
|
|
61
|
|
||
Net cash provided by (used in) investing activities
|
423,295
|
|
|
(123,351
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuances of common stock, net
|
27,404
|
|
|
89,718
|
|
||
Milestone payments
|
(7,921
|
)
|
|
(130,058
|
)
|
||
Proceeds from the issuance of convertible senior notes
|
402,500
|
|
|
400,000
|
|
||
Repayments of convertible senior notes
|
(323,225
|
)
|
|
—
|
|
||
Purchase of capped call transactions related to convertible senior notes
|
(33,931
|
)
|
|
—
|
|
||
Proceeds from settlement of bond hedges related to convertible senior notes
|
100,459
|
|
|
—
|
|
||
Settlement of warrants
|
(87,874
|
)
|
|
—
|
|
||
Debt and equity issuance costs
|
(11,725
|
)
|
|
(12,769
|
)
|
||
Net cash provided by financing activities
|
65,687
|
|
|
346,891
|
|
||
Effect of exchange rate changes on cash
|
(814
|
)
|
|
(12
|
)
|
||
Increase in cash and cash equivalents
|
227,183
|
|
|
138,067
|
|
||
Cash and cash equivalents at beginning of period
|
373,173
|
|
|
370,741
|
|
||
Cash and cash equivalents at end of period
|
$
|
600,356
|
|
|
$
|
508,808
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
11,891
|
|
|
$
|
6,946
|
|
Taxes paid
|
$
|
27
|
|
|
$
|
89
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Net income (loss) from continuing operations attributable to The Medicines Company
|
$
|
(86,354
|
)
|
|
$
|
(90,617
|
)
|
|
$
|
5,126
|
|
|
$
|
(153,689
|
)
|
Income (loss) from discontinued operations, net of tax
|
96
|
|
|
(14,515
|
)
|
|
(1,390
|
)
|
|
6,999
|
|
||||
Net (loss) income attributable to The Medicines Company
|
$
|
(86,258
|
)
|
|
$
|
(105,132
|
)
|
|
$
|
3,736
|
|
|
$
|
(146,690
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, basic
|
70,194
|
|
|
67,137
|
|
|
69,711
|
|
|
66,079
|
|
||||
Plus: net effect of dilutive stock options, warrants, restricted common shares and shares issuable upon conversion of notes
|
—
|
|
|
—
|
|
|
3,209
|
|
|
—
|
|
||||
Weighted average common shares outstanding, diluted
|
70,194
|
|
|
67,137
|
|
|
72,920
|
|
|
66,079
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic (loss) earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
|
|
||||||||
(Loss) earnings from continuing operations
|
$
|
(1.23
|
)
|
|
$
|
(1.35
|
)
|
|
$
|
0.07
|
|
|
$
|
(2.33
|
)
|
(Loss) earnings from discontinued operations
|
—
|
|
|
(0.22
|
)
|
|
(0.02
|
)
|
|
0.11
|
|
||||
Basic (loss) earnings per share
|
$
|
(1.23
|
)
|
|
$
|
(1.57
|
)
|
|
$
|
0.05
|
|
|
$
|
(2.22
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per common share attributable to The Medicines Company:
|
|
|
|
|
|
|
|
||||||||
(Loss) earnings from continuing operations
|
$
|
(1.23
|
)
|
|
$
|
(1.35
|
)
|
|
$
|
0.07
|
|
|
$
|
(2.33
|
)
|
(Loss) earnings from discontinued operations
|
—
|
|
|
(0.22
|
)
|
|
(0.02
|
)
|
|
0.11
|
|
||||
Diluted (loss) earnings per share
|
$
|
(1.23
|
)
|
|
$
|
(1.57
|
)
|
|
$
|
0.05
|
|
|
$
|
(2.22
|
)
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 asset consists 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 dispositions and business combinations, respectively. The fair value of certain development or regulatory milestone based contingent purchase prices was determined in a discounted cash flow framework by probability weighting the future contractual payment with management's assessment of the likelihood of achieving these milestones and present valuing them using a risk-adjusted discount rate. Certain sales milestone based payments were determined in a discounted cash flow framework where risk-adjusted revenue scenarios were estimated using Monte Carlo simulation models to compute contractual payments which were present valued using a risk-adjusted discount rate.
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||||||||||
Assets and Liabilities
|
Quoted Prices In
Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Balance as of September 30, 2016
|
|
Quoted Prices In
Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Balance as of December 31, 2015
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market
|
$
|
56,097
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56,097
|
|
|
$
|
6,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,030
|
|
Total assets at fair value
|
$
|
56,097
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56,097
|
|
|
$
|
6,030
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,030
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase price
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
129,410
|
|
|
$
|
129,410
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
123,757
|
|
|
$
|
123,757
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
129,410
|
|
|
$
|
129,410
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
123,757
|
|
|
$
|
123,757
|
|
|
|
Fair Value as of
September 30, 2016 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
(Weighted Average)
|
||
|
|
(in thousands)
|
|
|
|
|
|
|
||
Targanta:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
5,560
|
|
|
Probability-adjusted discounted cash flow
|
|
Probability of success
|
|
20%
|
|
|
|
|
|
|
Period in which milestone is expected to be achieved
|
|
2021
|
||
|
|
|
|
|
|
Discount rate
|
|
11%
|
||
Incline:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
2,050
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of successes
|
|
5%
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2017 - 2019
|
||
|
|
|
|
|
|
Discount rate
|
|
18%
|
||
Rempex:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price: Event-based milestones
|
|
$
|
88,900
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of successes
|
|
18% - 95% (73%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2016 - 2024
|
||
|
|
|
|
|
|
Discount rate
|
|
5.6% - 8.4%
|
||
Contingent purchase price: Sales-based milestones
|
|
$
|
17,900
|
|
|
Risk-adjusted revenue simulation
|
|
Probabilities of successes
|
|
20% - 52% (48%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2018 - 2022
|
||
|
|
|
|
|
|
Discount rate
|
|
6.8% - 8.1%
|
||
|
|
|
|
|
|
|
|
|
||
Annovation:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
15,000
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of successes
|
|
9% - 50% (33%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2017 - 2030
|
||
|
|
|
|
|
|
Discount rate
|
|
6.0% - 9.5%
|
|
|
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%
|
|
|
|
|
|
|
Period 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 successes
|
|
64% - 72% (67%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2017 - 2018
|
||
|
|
|
|
|
|
Discount rate
|
|
18%
|
||
Rempex:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price: Event-based milestones
|
|
$
|
63,000
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of successes
|
|
11% - 95% (56%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2016 - 2020
|
||
|
|
|
|
|
|
Discount rate
|
|
3.6% - 6.0%
|
||
Contingent purchase price: Sales-based milestones
|
|
$
|
10,300
|
|
|
Risk-adjusted revenue simulation
|
|
Probabilities of successes
|
|
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 successes
|
|
8% - 50% (31%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2016 - 2030
|
||
|
|
|
|
|
|
Discount rate
|
|
4.1% - 8.2%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance at beginning of period
|
$
|
118,571
|
|
|
$
|
207,160
|
|
|
$
|
123,757
|
|
|
$
|
351,134
|
|
Fair value of contingent purchase price with respect to Annovation as of February 2, 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
18,000
|
|
||||
Payments
|
(1,564
|
)
|
|
(3,600
|
)
|
|
(8,811
|
)
|
|
(179,250
|
)
|
||||
Fair value adjustments to contingent purchase prices included in net income (loss)
|
12,403
|
|
|
747
|
|
|
14,464
|
|
|
14,423
|
|
||||
Balance at end of period
|
$
|
129,410
|
|
|
$
|
204,307
|
|
|
$
|
129,410
|
|
|
$
|
204,307
|
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
|
|
(in thousands)
|
||||||
Raw materials
|
|
$
|
41,561
|
|
|
$
|
31,354
|
|
Work-in-progress
|
|
22,218
|
|
|
21,487
|
|
||
Finished goods
|
|
6,875
|
|
|
11,743
|
|
||
Total
|
|
$
|
70,654
|
|
|
$
|
64,584
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||||
|
Weighted Average
Useful Life
(years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization and Other Charges
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization and Other Charges
|
|
Net
Carrying
Amount
|
||||||||||||
|
|
|
(in thousands)
|
||||||||||||||||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product licenses
(1)
|
16.8
|
|
$
|
30,000
|
|
|
$
|
(2,239
|
)
|
|
$
|
27,761
|
|
|
$
|
31,500
|
|
|
$
|
(7,869
|
)
|
|
$
|
23,631
|
|
Developed product rights
(2)
|
16.3
|
|
370,560
|
|
|
(30,251
|
)
|
|
340,309
|
|
|
373,090
|
|
|
(14,121
|
)
|
|
358,969
|
|
||||||
Total amortizable intangible assets
|
16.3
|
|
400,560
|
|
|
(32,490
|
)
|
|
368,070
|
|
|
404,590
|
|
|
(21,990
|
)
|
|
382,600
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In-process research and development
|
—
|
|
$
|
253,620
|
|
|
$
|
—
|
|
|
$
|
253,620
|
|
|
$
|
253,620
|
|
|
$
|
—
|
|
|
$
|
253,620
|
|
Total intangible assets not subject to amortization
|
—
|
|
253,620
|
|
|
—
|
|
|
253,620
|
|
|
253,620
|
|
|
—
|
|
|
253,620
|
|
||||||
Total intangible assets
|
|
|
$
|
654,180
|
|
|
$
|
(32,490
|
)
|
|
$
|
621,690
|
|
|
$
|
658,210
|
|
|
$
|
(21,990
|
)
|
|
$
|
636,220
|
|
(1)
|
The Company amortizes intangible assets related to the product licenses over their expected useful lives.
|
(2)
|
The Company amortizes intangible assets related to developed product rights over the remaining life of the patents.
|
|
September 30, 2016
|
||
|
(in thousands)
|
||
Balance as of December 31, 2015
|
$
|
289,441
|
|
Allocation of goodwill to the Non-Core ACC Products
|
(33,812
|
)
|
|
Balance as of September 30, 2016
|
$
|
255,629
|
|
•
|
during any calendar quarter commencing on or after September 30, 2016 (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 2023 Notes Indenture) per
$1,000
principal amount of notes for each trading day of the measurement period was less than
98%
of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;
|
•
|
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
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
402,500
|
|
|
$
|
—
|
|
Less: Debt discount, net
(1)
|
|
(106,160
|
)
|
|
—
|
|
||
Net carrying amount
|
|
$
|
296,340
|
|
|
$
|
—
|
|
(1)
|
Included in the accompanying condensed consolidated balance sheets within convertible senior notes (due 2023) and amortized to interest expense over the remaining life of the 2023 Notes using the effective interest rate method.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Contractual interest expense
|
$
|
2,777
|
|
|
$
|
—
|
|
|
$
|
3,381
|
|
|
$
|
—
|
|
Amortization of debt discount
|
2,923
|
|
|
—
|
|
|
3,650
|
|
|
—
|
|
||||
Total
|
$
|
5,700
|
|
|
$
|
—
|
|
|
$
|
7,031
|
|
|
$
|
—
|
|
Effective interest rate of the liability component
|
7.5
|
%
|
|
|
|
|
7.5
|
%
|
|
|
|
•
|
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
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Less: Debt discount, net
(1)
|
|
(78,850
|
)
|
|
(87,893
|
)
|
||
Net carrying amount
|
|
$
|
321,150
|
|
|
$
|
312,107
|
|
(1)
|
Included in the accompanying condensed 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.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Contractual interest expense
|
$
|
2,500
|
|
|
$
|
2,505
|
|
|
$
|
7,500
|
|
|
$
|
7,139
|
|
Amortization of debt discount
|
3,078
|
|
|
2,878
|
|
|
9,043
|
|
|
8,053
|
|
||||
Total
|
$
|
5,578
|
|
|
$
|
5,383
|
|
|
$
|
16,543
|
|
|
$
|
15,192
|
|
Effective interest rate of the liability component
|
6.5
|
%
|
|
6.5
|
%
|
|
6.5
|
%
|
|
6.5
|
%
|
•
|
during any calendar quarter commencing on or after September 1, 2012 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price (described below) on each applicable trading day;
|
•
|
during the
five
business day period after any
five
consecutive trading day period (the Measurement Period) in which the trading price (as defined in the 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
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
55,000
|
|
|
$
|
275,000
|
|
Less: Debt discount, net
(1)
|
|
(1,946
|
)
|
|
(19,527
|
)
|
||
Net carrying amount
|
|
$
|
53,054
|
|
|
$
|
255,473
|
|
(1)
|
Included in the accompanying condensed 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.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Contractual interest expense
|
$
|
189
|
|
|
$
|
945
|
|
|
$
|
1,912
|
|
|
$
|
2,836
|
|
Amortization of debt discount
|
621
|
|
|
3,218
|
|
|
6,699
|
|
|
9,480
|
|
||||
Total
|
$
|
810
|
|
|
$
|
4,163
|
|
|
$
|
8,611
|
|
|
$
|
12,316
|
|
Effective interest rate of the liability component
|
6.02
|
%
|
|
6.02
|
%
|
|
6.02
|
%
|
|
6.02
|
%
|
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
|
Foreign currency translation adjustment
|
|
Unrealized (gain) loss on available for sale securities
|
|
Total
|
|
Foreign currency translation adjustment
|
|
Unrealized (gain) loss on available for sale securities
|
|
Total
|
||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||
Balance at beginning of period
|
|
$
|
(5,414
|
)
|
|
$
|
—
|
|
|
$
|
(5,414
|
)
|
|
$
|
4,433
|
|
|
$
|
49
|
|
|
$
|
4,482
|
|
Other comprehensive loss before reclassifications
|
|
(70
|
)
|
|
—
|
|
|
(70
|
)
|
|
(1,095
|
)
|
|
—
|
|
|
(1,095
|
)
|
||||||
Amounts reclassified from accumulated other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other comprehensive loss
|
|
(70
|
)
|
|
—
|
|
|
(70
|
)
|
|
(1,095
|
)
|
|
—
|
|
|
(1,095
|
)
|
||||||
Balance at end of period
|
|
$
|
(5,484
|
)
|
|
$
|
—
|
|
|
$
|
(5,484
|
)
|
|
$
|
3,338
|
|
|
$
|
49
|
|
|
$
|
3,387
|
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
|
Foreign currency translation adjustment
|
|
Unrealized (gain) loss on available for sale securities
|
|
Total
|
|
Foreign currency translation adjustment
|
|
Unrealized (gain) loss on available for sale securities
|
|
Total
|
||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||
Balance at beginning of period
|
|
$
|
3,924
|
|
|
$
|
49
|
|
|
$
|
3,973
|
|
|
$
|
2,479
|
|
|
$
|
49
|
|
|
$
|
2,528
|
|
Other comprehensive income before reclassifications
|
|
208
|
|
|
—
|
|
|
208
|
|
|
859
|
|
|
—
|
|
|
859
|
|
||||||
Amounts reclassified from accumulated other comprehensive income
(1) (2)
|
|
(9,616
|
)
|
|
(49
|
)
|
|
(9,665
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other comprehensive (loss) income
|
|
(9,408
|
)
|
|
(49
|
)
|
|
(9,457
|
)
|
|
859
|
|
|
—
|
|
|
859
|
|
||||||
Balance at end of period
|
|
$
|
(5,484
|
)
|
|
$
|
—
|
|
|
$
|
(5,484
|
)
|
|
$
|
3,338
|
|
|
$
|
49
|
|
|
$
|
3,387
|
|
(1)
|
Amounts were reclassified to other income in the accompanying condensed consolidated statements of operations. There is generally no tax impact related to foreign currency translation adjustments, as earnings are considered permanently reinvested. In addition, there were no material tax impacts related to unrealized gains or losses on available for sale securities in the periods presented.
|
(2)
|
See Note
16
, “Discontinued Operations,” for a discussion of this reclass of foreign currency translation adjustment.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
|
|
|
|
($ in thousands)
|
|
|
|
|
||||||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
$
|
35,662
|
|
|
94.8
|
%
|
|
$
|
53,352
|
|
|
93.3
|
%
|
|
$
|
133,273
|
|
|
93.4
|
%
|
|
$
|
227,193
|
|
|
93.9
|
%
|
Europe
|
1,726
|
|
|
4.6
|
%
|
|
3,419
|
|
|
6.0
|
%
|
|
7,544
|
|
|
5.3
|
%
|
|
12,885
|
|
|
5.3
|
%
|
||||
Rest of world
|
211
|
|
|
0.6
|
%
|
|
435
|
|
|
0.7
|
%
|
|
1,819
|
|
|
1.3
|
%
|
|
1,762
|
|
|
0.8
|
%
|
||||
Total net revenues
|
$
|
37,599
|
|
|
100.0
|
%
|
|
$
|
57,206
|
|
|
100.0
|
%
|
|
$
|
142,636
|
|
|
100.0
|
%
|
|
$
|
241,840
|
|
|
100.0
|
%
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||
|
($ in thousands)
|
||||||||||||
Long-lived assets:
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
1,053,737
|
|
|
99.5
|
%
|
|
$
|
956,298
|
|
|
99.3
|
%
|
Europe
|
5,525
|
|
|
0.5
|
%
|
|
6,301
|
|
|
0.7
|
%
|
||
Total long-lived assets
|
$
|
1,059,262
|
|
|
100.0
|
%
|
|
$
|
962,599
|
|
|
100.0
|
%
|
|
Balance as of January 1, 2016
|
|
Expenses,
Net
|
|
Cash
|
|
Noncash
|
|
Balance as of September 30, 2016
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Employee severance and other personnel benefits:
|
|
|
|
|
|
|
|
|
|
||||||||||
2016 Workforce reduction
|
$
|
—
|
|
|
$
|
16,261
|
|
|
$
|
(11,095
|
)
|
|
$
|
(579
|
)
|
|
$
|
4,587
|
|
Total
|
$
|
—
|
|
|
$
|
16,261
|
|
|
$
|
(11,095
|
)
|
|
$
|
(579
|
)
|
|
$
|
4,587
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Net product revenues
|
$
|
28
|
|
|
$
|
15,471
|
|
|
$
|
78
|
|
|
$
|
47,826
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of product revenue
|
(9
|
)
|
|
37,781
|
|
|
1,695
|
|
|
63,224
|
|
||||
Research and development
|
(15
|
)
|
|
3,018
|
|
|
104
|
|
|
6,871
|
|
||||
Selling, general and administrative
|
(44
|
)
|
|
(4,414
|
)
|
|
634
|
|
|
(1,727
|
)
|
||||
Total operating expenses
|
(68
|
)
|
|
36,385
|
|
|
2,433
|
|
|
68,368
|
|
||||
Income (loss) from operations
|
96
|
|
|
(20,914
|
)
|
|
(2,355
|
)
|
|
(20,542
|
)
|
||||
Gain from sale of business
|
—
|
|
|
—
|
|
|
1,004
|
|
|
—
|
|
||||
Other expense, net
|
—
|
|
|
(49
|
)
|
|
(39
|
)
|
|
(538
|
)
|
||||
Income (loss) from discontinued operations before income taxes
|
96
|
|
|
(20,963
|
)
|
|
(1,390
|
)
|
|
(21,080
|
)
|
||||
Benefit for income taxes
|
—
|
|
|
(6,448
|
)
|
|
—
|
|
|
(28,079
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
$
|
96
|
|
|
$
|
(14,515
|
)
|
|
$
|
(1,390
|
)
|
|
$
|
6,999
|
|
|
December 31,
2015 |
||
|
(in thousands)
|
||
Assets:
|
|
||
Inventory
|
$
|
53,765
|
|
Prepaid expenses and other current assets
|
1,153
|
|
|
Fixed assets, net
|
1,913
|
|
|
Intangibles, net
|
374,779
|
|
|
Allowance for reduction of assets of business held for sale
|
(108,773
|
)
|
|
Total assets held for sale
|
$
|
322,837
|
|
|
|
||
Liabilities:
|
|
||
Contingent purchase price – current
|
$
|
28,600
|
|
Deferred tax liability
|
38,915
|
|
|
Total liabilities held for sale
|
$
|
67,515
|
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Depreciation from discontinued operations
|
$
|
—
|
|
|
$
|
258
|
|
Amortization from discontinued operations
|
—
|
|
|
13,311
|
|
||
Gain on sale of business
|
(1,004
|
)
|
|
—
|
|
||
Asset impairment charges
|
—
|
|
|
25,800
|
|
||
Change in contingent consideration obligation
|
—
|
|
|
(9,200
|
)
|
||
Proceeds from sale of business
|
174,068
|
|
|
—
|
|
||
Capital expenditures
|
—
|
|
|
703
|
|
Product or Product
in Development
|
|
Development Stage
|
|
Mechanism/Target
|
|
Clinical Indication(s)/Therapeutic Areas
|
Marketed and Approved Products
|
|
|
|
|
|
|
Angiomax
|
|
Marketed as a branded product, and as an authorized generic in the United States through Sandoz
|
|
Direct thrombin inhibitor
|
|
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
|
|
|
|
|
|
|
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
|
Ionsys
|
|
Marketed in the United States; Marketed in the European Union
|
|
Patient-controlled analgesia system
|
|
Short-term management of acute postoperative pain in hospitalized patients
|
Minocin IV
|
|
Marketed in the United States
|
|
Tetracycline-class antibiotic
|
|
Treatment of bacterial infections due to susceptible isolates of designated microorganisms, including Acinetobacter species.
|
Orbactiv
|
|
Marketed in the United States; Approved in the European Union
|
|
Antibiotic
|
|
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
|
Acute care generic products:
Adenosine, Amiodarone, Esmolol and Milrinone
|
|
Approved in the United States
|
|
Various
|
|
Acute cardiovascular
|
Acute care generic products: Azithromycin and Clindamycin
|
|
Approved in the United States
|
|
Various
|
|
Serious infectious disease
|
Acute care generic products: Haloperidol, Midazolam, Ondansetron and Rocuronium
|
|
Approved in the United States; Midazolam, Ondansetron and Rocuronium marketed in the United States
|
|
Various
|
|
Surgery and perioperative
|
Research and Development Stage
|
|
|
|
|
|
|
Carbavance
|
|
Phase 3
|
|
Combination of vaborbactam a proprietary, novel beta-lactamase inhibitor, with meropenem, a carbapenem antibiotic
|
|
Treatment of hospitalized patients with serious gram-negative bacterial infections
|
Product or Product
in Development
|
|
Development Stage
|
|
Mechanism/Target
|
|
Clinical Indication(s)/Therapeutic Areas
|
MDCO-216
|
|
Phase 1/2
|
|
Naturally occurring variant of a protein found in high-density lipoprotein
|
|
Reverse cholesterol transport agent to reduce atherosclerotic plaque burden development and thereby reduce the risk of adverse thrombotic events
|
MDCO-700
|
|
Phase 2
|
|
Analogue of etomidate, an intravenous imidazole agent used for induction of general anesthesia
|
|
Sedative-hypnotic used to induce and maintain sedation for procedural care and general anesthesia for surgical care
|
PCSK9si
|
|
Phase 2
|
|
PCSK-9 gene antagonist addressing low-density lipoprotein cholesterol disease modification
|
|
Treatment of hypercholesterolemia
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Net product revenues
|
$
|
18,843
|
|
|
$
|
32,703
|
|
|
$
|
(13,860
|
)
|
|
(42.4
|
)%
|
|
$
|
80,542
|
|
|
$
|
217,337
|
|
|
$
|
(136,795
|
)
|
|
(62.9
|
)%
|
Royalty revenues
|
18,756
|
|
|
24,503
|
|
|
(5,747
|
)
|
|
(23.5
|
)%
|
|
62,094
|
|
|
24,503
|
|
|
37,591
|
|
|
153.4
|
%
|
||||||
Total net revenues
|
$
|
37,599
|
|
|
$
|
57,206
|
|
|
$
|
(19,607
|
)
|
|
(34.3
|
)%
|
|
$
|
142,636
|
|
|
$
|
241,840
|
|
|
$
|
(99,204
|
)
|
|
(41.0
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Angiomax
|
$
|
10,154
|
|
|
$
|
22,499
|
|
|
$
|
(12,345
|
)
|
|
(54.9
|
)%
|
|
$
|
42,837
|
|
|
$
|
188,754
|
|
|
$
|
(145,917
|
)
|
|
(77.3
|
)%
|
Other products
|
8,689
|
|
|
10,204
|
|
|
(1,515
|
)
|
|
(14.8
|
)%
|
|
37,705
|
|
|
28,583
|
|
|
9,122
|
|
|
31.9
|
%
|
||||||
Net product revenues
|
$
|
18,843
|
|
|
$
|
32,703
|
|
|
$
|
(13,860
|
)
|
|
(42.4
|
)%
|
|
$
|
80,542
|
|
|
$
|
217,337
|
|
|
$
|
(136,795
|
)
|
|
(62.9
|
)%
|
•
|
expenses in connection with the manufacture of our products sold, including expenses related to excess inventory offset by the positive impact of sales of previously reserved units;
|
•
|
royalty expenses under our agreement with Eli Lilly and Company related to Orbactiv, our agreement with AstraZeneca related to Cleviprex and our agreement with Eagle Pharmaceuticals, Inc. related to ready-to-use Argatroban;
|
•
|
amortization of the costs of selling rights agreements, product licenses, developed product rights and other identifiable intangible assets, which result from product and business acquisitions; and
|
•
|
logistics costs related to Angiomax, Cleviprex, Orbactiv, Minocin IV, ready-to-use Argatroban, Kengreal and Ionsys, including distribution, storage, and handling costs.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2016
|
|
% of Total
|
|
2015
|
|
% of Total
|
|
2016
|
|
% of Total
|
|
2015
|
|
% of Total
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||
Manufacturing/Logistics
|
$
|
7,275
|
|
|
35.0
|
%
|
|
$
|
12,193
|
|
|
24.8
|
%
|
|
$
|
29,052
|
|
|
53.0
|
%
|
|
$
|
37,544
|
|
|
39.7
|
%
|
Royalties
|
715
|
|
|
3.5
|
%
|
|
1,001
|
|
|
2.0
|
%
|
|
5,063
|
|
|
9.2
|
%
|
|
7,171
|
|
|
7.6
|
%
|
||||
Impairment of inventory and amortization of acquired product rights and intangible assets
|
12,787
|
|
|
61.5
|
%
|
|
35,994
|
|
|
73.2
|
%
|
|
20,689
|
|
|
37.8
|
%
|
|
49,767
|
|
|
52.7
|
%
|
||||
Total cost of product revenues
|
$
|
20,777
|
|
|
100.0
|
%
|
|
$
|
49,188
|
|
|
100.0
|
%
|
|
$
|
54,804
|
|
|
100.0
|
%
|
|
$
|
94,482
|
|
|
100.0
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2016
|
|
% of Total
|
|
2015
|
|
% of Total
|
|
2016
|
|
% of Total
|
|
2015
|
|
% of Total
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||
Marketed products
|
$
|
3,820
|
|
|
16.2
|
%
|
|
$
|
7,067
|
|
|
26.1
|
%
|
|
$
|
14,408
|
|
|
15.2
|
%
|
|
$
|
23,577
|
|
|
28.3
|
%
|
Registration stage product candidates
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
5,476
|
|
|
6.6
|
%
|
||||
Research and development product candidates
|
19,717
|
|
|
83.9
|
%
|
|
20,035
|
|
|
73.9
|
%
|
|
80,187
|
|
|
84.8
|
%
|
|
54,367
|
|
|
65.1
|
%
|
||||
Total research and development expenses
|
$
|
23,537
|
|
|
100.1
|
%
|
|
$
|
27,102
|
|
|
100.0
|
%
|
|
$
|
94,595
|
|
|
100.0
|
%
|
|
$
|
83,420
|
|
|
100.0
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Selling, Marketing and promotional
|
$
|
30,351
|
|
|
$
|
49,598
|
|
|
$
|
(19,247
|
)
|
|
(38.8
|
)%
|
|
$
|
119,607
|
|
|
$
|
147,600
|
|
|
$
|
(27,993
|
)
|
|
(19.0
|
)%
|
General Corporate and Administrative
|
$
|
38,671
|
|
|
$
|
37,294
|
|
|
$
|
1,377
|
|
|
3.7
|
%
|
|
$
|
122,871
|
|
|
$
|
113,386
|
|
|
$
|
9,485
|
|
|
8.4
|
%
|
Total selling, general and administrative expenses
|
$
|
69,022
|
|
|
$
|
86,892
|
|
|
$
|
(17,870
|
)
|
|
(20.6
|
)%
|
|
$
|
242,478
|
|
|
$
|
260,986
|
|
|
$
|
(18,508
|
)
|
|
(7.1
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Co-promotion and license income
|
$
|
757
|
|
|
$
|
985
|
|
|
$
|
(228
|
)
|
|
(23.1
|
)%
|
|
$
|
3,073
|
|
|
$
|
10,011
|
|
|
$
|
(6,938
|
)
|
|
(69.3
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Gain on remeasurement of equity investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
$
|
22,597
|
|
|
$
|
(22,597
|
)
|
|
(100.0
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Gain on sale of investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
$
|
19,773
|
|
|
$
|
(19,773
|
)
|
|
(100.0
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Gain on sale of assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
288,301
|
|
|
$
|
—
|
|
|
$
|
288,301
|
|
|
100.0
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Loss on extinguishment of debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
5,380
|
|
|
$
|
—
|
|
|
$
|
5,380
|
|
|
100.0
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Legal settlement
|
$
|
—
|
|
|
$
|
5,000
|
|
|
$
|
(5,000
|
)
|
|
(100.0
|
)%
|
|
$
|
—
|
|
|
$
|
5,000
|
|
|
$
|
(5,000
|
)
|
|
(100.0
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Interest expense
|
$
|
12,089
|
|
|
$
|
9,547
|
|
|
$
|
2,542
|
|
|
26.6
|
%
|
|
$
|
32,198
|
|
|
$
|
27,510
|
|
|
$
|
4,688
|
|
|
17.0
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||||||||||||||
Other income (loss)
|
$
|
865
|
|
|
$
|
(89
|
)
|
|
$
|
954
|
|
|
*
|
|
$
|
741
|
|
|
$
|
609
|
|
|
$
|
132
|
|
|
21.7
|
%
|
* Represents a change in excess of 100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||
(Provision) benefit for income taxes
|
$
|
(163
|
)
|
|
$
|
19,001
|
|
|
$
|
(19,164
|
)
|
|
*
|
|
$
|
(220
|
)
|
|
$
|
12,895
|
|
|
$
|
(13,115
|
)
|
|
*
|
* Represents a change in excess of 100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
|
2016
|
|
2015
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax
|
$
|
96
|
|
|
$
|
(14,515
|
)
|
|
$
|
14,611
|
|
|
(100.7
|
)%
|
|
$
|
(1,390
|
)
|
|
$
|
6,999
|
|
|
$
|
(8,389
|
)
|
|
(119.9
|
)%
|
* Represents a change in excess of 100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
$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
$83.0 million
in additional payments to other third parties related to the Incline 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;
|
•
|
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.
|
•
|
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.
|
•
|
make regulatory submissions and obtain regulatory approvals in the timeframes anticipated;
|
•
|
train our existing sales force to market and sell the products that are to be sold by it;
|
•
|
train, deploy and support a qualified sales force to market and sell newly launched products;
|
•
|
secure formulary approvals at our hospital customers;
|
•
|
have third parties manufacture and release the products in sufficient quantities;
|
•
|
implement and maintain agreements with wholesalers, distributors and group purchasing organizations;
|
•
|
receive adequate levels of coverage and reimbursement for these products from governments and third-party payors;
|
•
|
develop and execute marketing and sales strategies and programs for the products.
|
•
|
$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
$83.0 million
in additional payments to other third parties related to the Incline transaction;
|
•
|
$289.2 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;
|
•
|
$412.0 million
due to our licensing of MDCO‑216 from Pfizer; and
|
•
|
$1.2 million
for other transaction milestones.
|
•
|
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.
|
•
|
difficulty in integrating the operations, products or product candidates and personnel of an acquired company;
|
•
|
entry into markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions;
|
•
|
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;
|
•
|
disruption of our ongoing business and distraction of our management and employees from other opportunities and challenges;
|
•
|
inadequate or unfavorable clinical trial results from acquired or contracted for products in development;
|
•
|
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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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increasing our vulnerability to general adverse economic, industry and market conditions;
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•
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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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•
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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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•
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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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•
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continue to improve operating, administrative, and information systems;
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•
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accurately predict future personnel and resource needs to meet contract commitments;
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•
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track the progress of ongoing projects; and
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•
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attract and retain qualified management, sales, professional, scientific and technical operating personnel.
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•
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political and economic determinations that adversely impact pricing or reimbursement policies;
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•
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our customers’ ability to obtain reimbursement for procedures using our products in foreign markets;
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•
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compliance with complex and changing foreign legal, tax, accounting and regulatory requirements;
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•
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language barriers and other difficulties in providing long-range customer support and service;
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•
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longer accounts receivable collection times;
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•
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significant foreign currency fluctuations, which could result in increased operating expenses and reduced revenues;
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•
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trade restrictions and restrictions on direct investment by foreign entities;
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•
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reduced protection of intellectual property rights in some foreign countries; and
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•
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the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
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•
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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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•
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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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•
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decline, in whole or in part, to exercise an option to renew the contracts;
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•
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claim rights to data, including intellectual property rights, developed under such contracts;
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•
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audit contract-related costs and fees, including allocated indirect costs;
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•
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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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•
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take actions that result in a longer development timeline than expected;
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•
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direct the course of a development program in a manner not chosen by the government contractor;
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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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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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•
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termination of any government contracts, including our BARDA contracts;
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•
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suspension of payments;
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•
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fines; and
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•
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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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•
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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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•
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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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•
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diminish our competitive advantage; and
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•
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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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•
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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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•
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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;
|
•
|
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;
|
•
|
developments in patent rights or other proprietary rights;
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•
|
the extent to which our products are commercially successful globally;
|
•
|
developments in our ongoing litigation and significant new litigation;
|
•
|
developments or issues with our contract manufacturers;
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•
|
changes in our management; and
|
•
|
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;
|
•
|
our board of directors has the authority to issue, without a vote or action of stockholders, up to 5,000,000 shares of a new series of preferred stock and to fix the price, rights, preferences and privileges of those shares, each of which could be superior to the rights of holders of our common stock;
|
•
|
our directors currently are elected to staggered terms, which prevents our entire board of directors from being replaced in any single year, however, at our May 2016 annual meeting of stockholders, our stockholders approved an amendment to our certificate of incorporation that provided for the phased declassification of our board of directors over a two year period and, as a result, upon the election of directors at our 2018 annual meeting of stockholders, we will no longer have a classified board of directors;
|
•
|
currently and until such time after our 2018 annual meeting of stockholders that our board of directors ceases to be classified, 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, and at all times after our board ceases to be classified, our directors may be removed with or without cause (but subject to the same 75% voting requirement as currently in effect);
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•
|
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;
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•
|
only our board of directors 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;
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•
|
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;
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•
|
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).
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•
|
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.
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|
|
|
|
THE MEDICINES COMPANY
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|
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|
|
Date:
|
October 27, 2016
|
|
By:
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/s/ William B. O'Connor
|
|
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|
|
William B. O'Connor
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|
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|
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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Exhibit Number
|
|
Description
|
|
|
|
10.1†
|
|
Agreement dated September 15, 2016 between The Medicines Company and the Biomedical Advanced Research and Development Authority of the U.S. Department of Health and Human Services.
|
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
|
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
|
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
|
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
|
101
|
|
The following materials from The Medicines Company Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Loss, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.
|
†
|
|
Confidential treatment requested as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission.
|
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Double asterisks denote omissions.
|
A.
|
Introduction
|
•
|
The objective of this Other Transaction Agreement (OTA) is to create a framework for collaboration between The Medicines Company (MDCO) and the Biomedical Advanced Research and Development Authority (BARDA) to advance the development of a portfolio of antibiotic programs. To support this objective, MDCO will conduct studies to support regulatory approval of selected candidates and identify additional lead candidates for continued development and eventual regulatory approval. This includes microbiological assessments, toxicology studies, clinical studies, chemistry, manufacturing, and controls (CMC) development, and regulatory activities. By mutual consent of MDCO and the Government, early-stage candidates may be included in order to facilitate their progress into the clinical portfolio. This framework will provide the Government and MDCO the flexibility to execute a portfolio approach to fund in the complex and uncertain environment of drug development.
|
•
|
The work under this Agreement will support the development of a diverse portfolio of early and late stage antibacterial candidates as well as supplemental regulatory approval of Carbavance (meropenem-Vaborbactam) for the treatment of hospital acquired bacterial pneumonia and ventilator acquired bacterial pneumonia (HABP/VABP). Each of the antibiotics in the portfolio is designed to treat serious infections caused by multi-drug-resistant Gram-negative organisms.
|
•
|
This Agreement may be modified by mutual agreement consistent with Article III. This approach allows for funds to be flexibly allocated each year between the assets and for other assets to be brought into scope by mutual consent without a lengthy proposal process, such as assets emerging from the early-stage pipeline or from MDCO’s alliances with other companies, institutions, or educational centers. This approach is appropriate because asset-specific funding lacks the flexibility that is needed in order to reposition funds in response to attrition. Portfolio-based product development is an important and innovative strategy to manage and reduce overall risk, and to capitalize on emergent opportunities in order to maximize the probability of success. The portfolio- based development approach in this Agreement will enable a more robust and long- term relationship between the Government and MDCO to address development of multi-use assets.
|
•
|
Many pharmaceutical companies have stopped developing new antibiotics due to a diminished return on investment. The formation of public-private partnerships with industry helps to sustain research in this area where new drugs are desperately needed to address the growing rate of antibiotic resistance. This Agreement addresses this issue by permitting the Government to share in the expense of activities for a portfolio of antibiotics. The portfolio will initially consist of Carbavance, ORAvance, a novel Polymyxin, OMNIvance, efflux pump inhibitors, and a novel carbapenem; along with any additional antibiotics that may be added to this Agreement by mutual consent of the parties. The mix of development projects in the portfolio may be changed in accordance with Articles III and IV below. This Agreement will help ensure that an experienced pharmaceutical company will remain engaged in antibacterial development to combat the threat of antibiotic resistance. Furthermore, portfolio-based product development reduces risk by allowing for the reallocation of resources across activities and drug candidates, if technical or business risks materialize. An agreement that allows for the funding of a portfolio of products instead of just one increases the probability of bringing a successful drug to market.
|
•
|
MDCO is one of the few companies that is actively investing in the development of innovative antibiotics for infectious diseases and has an infrastructure to support
|
•
|
The current MDCO portfolio aligns with both PHEMCE and BARDA requirements. To ensure a robust portfolio is maintained over time, MDCO will continue to evaluate other early stage candidates from its own pipeline and identify potential partners through which strategic alliances could be negotiated to in-license antibacterial candidates for development and funding within the portfolio. A public-private partnership between the Government and MDCO formed under an OTA will allow the technical and business risks of drug development to be mitigated and increase the probability of successful development and approval/licensure of novel antibacterials to address unmet medical needs.
|
•
|
The proposed partnership with MDCO addresses BARDA’s Anti-bacterials (AB) Program Strategy to revitalize the antimicrobial pipeline by forming public-private partnerships with companies engaged in antimicrobial therapy research and development. The AB Program strategy emphasizes programs that address the immediate public health threat of drug resistant community and hospital acquired infections while also providing a biodefense capability in the event that drugs in the Strategic National Stockpile lose efficacy due to the emergence of drug resistant bacteria. The partnership with MDCO also addresses numerous US Government Requirements and Strategies including:
|
•
|
The PHEMCE Product Specific Requirement (PSR) for Medical Countermeasures to Antimicrobial Resistant Bacterial Infections. Carbavance, along with the potential additional antibiotic candidates identified by MDCO, directly address this requirement to develop and license novel products that are able to treat drug-resistant bacteria.
|
•
|
The President’s Executive Order 13676 for “Combating Antibiotic Resistant Bacteria”, dated September 18, 2014 requires the Department of Health and Human Services (HHS) through BARDA to develop new and next generation countermeasures that target antibiotic resistant bacteria that present a serious or urgent threat to public health. The AB Program strategy aligns with the Executive Order by seeking to develop novel antimicrobial drugs capable of treating those bacterial threats determined by the Centers for Disease Control and Prevention (CDC) to be either urgent (C. difficile, Carbapenem-resistant Enterobacteriaceae, drug-resistant N. gonorrhoeae) and serious (multidrug- resistant Acinetobacter, ESβLs, Pseudomonas, MRSA and Streptococcus pneumoniae).
|
•
|
The President’s September 2014 “National Strategy for Combating Antibiotic Resistant Bacteria” requires for the forming of both public-private partnerships and international collaborations to enhance and accelerate the research and development of new therapeutics to counter antibiotic resistance. This collaboration is the type of international collaboration sought by the President in the National Strategy.
|
•
|
The President’s March 2015 “National Action Plan for Combating Antibiotic Resistant Bacteria” that requires HHS through BARDA to create portfolio partnerships with
|
•
|
Lastly, the proposed partnership aligns with the Government’s and MDCO’s support of commonly accepted international principles of antimicrobial stewardship through responsible promotion and use. MDCO’s stewardship objective is to achieve optimal clinical outcomes which minimize toxicity and other adverse events, while supporting appropriate prescribing to limit the selection for antimicrobial resistant strains. MDCO encourages the responsible use of its antimicrobial products by promoting the selection of appropriate patients for treatment and by using the optimal drug regimen, dose, and duration of therapy.
|
B.
|
Definitions
|
(a)
|
Means:
|
(i)
|
Computer programs that comprise a series of instructions, rules, routines, or statements, regardless of the media in which recorded, that allow or cause a computer to perform a specific operation or series of operations; and
|
(ii)
|
Recorded information comprising source code listings, design details, algorithms, processes, flow charts, formulas, and related material that would enable the computer program to be produced, created, or compiled.
|
(b)
|
Does not include computer databases or computer software documentation.
|
C.
|
Scope
|
A.
|
Term of this Agreement
|
B.
|
Termination Provisions
|
C.
|
Extending the Term
|
A.
|
Recommendations for Modifications
|
B.
|
Minor Modifications
|
C.
|
Amending the Agreement
|
A.
|
Recipient/Government Joint OTAR Oversight Committee
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
[**]
|
B.
|
Project Meetings
|
C.
|
Document Review
|
A.
|
Administrative and contractual matters under this Agreement will be referred to the following representatives of the Parties:
|
B.
|
Technical matters under this Agreement will be referred to the following representatives:
|
A.
|
The terms of this Article VI apply to the cost sharing for the Base Period for non-clinical, non- clinical toxicology, clinical, CMC and regulatory activities for a Portfolio of Antibacterial Programs. This framework may be applied by mutual agreement to any of the Option periods or to any modifications to the effort required under the Base Period.
|
B.
|
Recipient has entered into a separate agreement with Monash University (Victoria, Australia) as a subcontractor under an NIH award to identify new lipopeptides of the polymyxin type that are as potent as polymyxin B but have significantly reduced nephrotoxicity in vivo. Activities completed by Monash University or funded by the NIH under grant
5R01AI098771
are not included in the scope of work or cost sharing to be completed under this Agreement. The NIH grant is not a subcontract under this Agreement.
|
C.
|
Based upon Recipient’s commercial estimating practices, the Recipient estimates that the cost of completing the Base Period is $[**]. This amount reflects Recipient’s estimate and may overstate or understate the actual cost of performing this Agreement. The Recipient estimates that it will fund approximately $[**], in the aggregate, of the activities proposed under the Base Period. Estimated cost sharing amounts for any Option periods will be subject to mutual agreement.
|
The Medicines Company
|
[**]
|
DIRECT LABOR
|
[**]
|
SUBCONTRACTS
|
[**]
|
CONSULTANTS
|
[**]
|
MATERIALS & SUPPLIES
|
[**]
|
DIRECT TRAVEL
|
[**]
|
US GOVERNMENT
|
$32,000,000
|
DIRECT LABOR
|
[**]
|
SUBCONTRACTS
|
[**]
|
Government Fiscal Year
|
Estimated Total Program
|
Government Share
|
FY16
|
$[**]
|
$32,000,000
|
FY17
|
TBD
|
Up to $25,000,000
|
FY18
|
TBD
|
Up to $25,000,000
|
FY19
|
TBD
|
Up to $25,000,000
|
FY20
|
TBD
|
Up to $25,000,000
|
D.
|
The Government will reimburse Recipient for Recipient’s actual direct costs paid to approved Sub-recipients under this Agreement and materials during the Base Period up to the amounts obligated to this Agreement in paragraph C of this Article. The Government also will reimburse Recipient for Recipient’s direct labor costs (per Article XVII.N Salary Limitation) under this Agreement during the Base Period up to the amounts obligated to this Agreement in paragraph C of this Article.
|
E.
|
Recipient will be entitled to reimbursement for its program management costs. The costs that are not subject to reimbursement under this Agreement constitute Recipient’s contribution or cost share for activities occurring in the Base Period.
|
F.
|
Recipient’s accounting for government-reimbursed and Recipient costs shall be in accordance with Recipient’s accounting practices but must comply with Generally Accepted Accounting Principles
|
G.
|
Recipient’s entitlement to reimbursement for its actual direct costs paid to approved Sub- recipients under this Agreement is not contingent upon Recipient’s cost share equaling any specific ratio or percentage of total costs. The Parties’ sole remedy to address the total BARDA cost exceeding or falling below the estimated total BARDA cost to perform the Statement of Work is to agree to a mutual modification of the Agreement or termination of the Agreement.
|
A.
|
Recipient will provide a monthly EVM/APR at an agreed upon reporting level using WBS and Variance Analysis report formats agreed upon by the OTAO, OTAS and/or OTTR
.
|
B.
|
The supplemental monthly Control Account Plan (CAP) report shall contain, at the work package level, time phased budget (budgeted cost of work scheduled), earned value (budgeted cost of work performed), and actual costs of work performed as captured in Recipient’s EVM systems. The Recipient shall provide a rationale in the package of its use of percent (%) complete as EVMS methodology, or identity if any other EVMS methodology is being used.
|
•
|
Recipient shall provide EVM/APR as part of the Monthly Progress Report
|
•
|
Recipient shall provide top level or key changes in baseline cost as a result of anticipated cost savings or risks
|
•
|
The OTAO, OTAS and/or OTTR may request, on a monthly or ad hoc basis that the Recipient provide raw data at a reporting level or lower level as the Government deems necessary.
|
•
|
Recipient must address, in writing, all concerns raised by the OTAO, OTAS and/or OTTR.
|
•
|
Reporting will commence after the EVM system has been implemented but no later than 90 days after start of Base Period and each exercised Option period.
|
A.
|
Obligation
|
B.
|
Payments
|
1.
|
Name and address of Recipient
|
2.
|
Invoice Date and Invoice Number
|
3.
|
Agreement Number
|
4.
|
Description, quantity, unit of measure, unit price, and extended price
|
5.
|
Recipient Cost Share
|
6.
|
Name and address of OTAR official to whom voucher is to be sent
|
7.
|
Name, title, phone number, and mailing address of person to notify in the event of a defective invoice.
|
8.
|
Taxpayer Identification Number (TIN)
|
9.
|
Electronic funds transfer (EFT) banking information.
|
[**]
|
[**]
|
DHHS/ASPR/BARDA
330 Independence Avenue, S.W., Room G640
Washington, DC 20201
|
[**]
|
[**]
|
|
[**]
|
[**]
|
|
C.
|
Limitation of Payments
|
1.
|
Allocability shall be determined in accordance with the standards set forth in FAR
|
2.
|
To be reasonable, a cost must: be generally recognized as an ordinary or necessary part of the business; follow sound business practices; follow what a prudent business person would accept; comply with federal, state, and local laws; and be consistent with the Recipient’s or Sub-recipient’s established practices.
|
3.
|
In addition, Recipient’s costs that are passed onto the Government for reimbursement shall comply with the procedures and cost principles set forth in this paragraph:
|
(a)
|
Reimbursement is subject to restrictions on allowable costs described in FAR 31.2.
|
(b)
|
The cost principles set forth in subparagraphs (a) shall only apply to the reimbursement of direct costs under cost-type Sub-recipient Agreements. These cost principles will be applicable to the pricing of fixed priced Sub-recipient Agreements only to the extent required by FAR 31.102.
|
(c)
|
A cost-type Sub-recipient will propose indirect rates as a component of its proposal to Recipient. The Government will review these indirect rates as part of the Sub-recipient approval process set forth in Article XIV. The Government’s approval to issue the Sub-recipient Agreement constitutes the Government’s agreement that the proposed indirect rate(s) may be used during the performance of the Sub-recipient Agreement to determine the Sub-recipient’s reimbursable indirect costs.
|
D.
|
Financial Records and Reports
|
E.
|
Comptroller General Access to Records
|
A.
|
General
|
B.
|
Dispute Resolution Procedures
|
4.
|
In the absence of a joint decision, upon written request to the DHHS, made within thirty
|
C.
|
Limitation of Damages
|
A.
|
Allocation of Principal Rights
|
B.
|
Marking of Data
|
(b)
|
This notice shall be marked on any reproduction of these data, in whole or in part.
|
C.
|
Lower Tier Agreements
|
D.
|
Identification and Disposition of Data
|
E.
|
Publication and Publicity
|
F.
|
Review of Press Releases
|
G.
|
Recipient Information
|
A.
|
Allocation of Principal Rights
|
B.
|
Invention Disclosure, Election of Title, and Filing of Patent Application
|
4.
|
Requests for extension of the time for disclosure, notice, and filing under this Article
|
C.
|
Conditions When the Government May Obtain Title
|
D.
|
Minimum Rights to Recipient and Protection of Recipient’s Right to File
|
E.
|
Action to Protect the Government’s Interest
|
F.
|
Lower Tier Agreements
|
G.
|
Reporting on Utilization of Subject Inventions
|
2.
|
All required reporting shall be submitted to the OTAS, OTAO, and OTTR.
|
H.
|
March-in Rights
|
A.
|
General
|
B.
|
Lower Tier Agreements
|
A.
|
Protection of Human Subjects
|
B.
|
Human Materials (Assurance of OHRP Compliance)
|
C.
|
Research Involving Human Fetal Tissue
|
D.
|
Needle Exchange
|
E.
|
Care of Live Vertebrate Animals
|
F.
|
Animal Welfare
|
G.
|
Protection of Personnel Who Work with Nonhuman Primates
|
H.
|
Information on Compliance with Animal Care Requirements
|
I.
|
Approval of Required Assurance by Law
|
J.
|
Registration with the Select Agent Program for Work Involving the Possession, Use, and/or Transfer of Select Biological Agents or Toxins
|
K.
|
Product Approval
|
L.
|
Manufacturing Standards
|
M.
|
Anti-Bribery and Anti-Corruption
|
N.
|
Salary Rate Limitation
|
O.
|
Person-In-Plant
|
P.
|
Reporting Matters Involving Fraud, Waste and Abuse
|
Q.
|
Prohibition on Recipient Involvement with Terrorist Activities
|
R.
|
Materials Transfer Agreement
|
S.
|
Inspection and Acceptance
|
3.
|
Inspection and acceptance will be performed at MDCO’s facilities or at:
|
A.
|
TECHNICAL REPORTS
|
B.
|
PROJECT MEETINGS
|
C.
|
REPORT DELIVERABLES
|
D.
|
DELIVERABLES
|
#
|
Type of Deliverable
|
Frequency/Time Periods
|
Description of Deliverable
|
Reporting Procedures
|
Quantity/Form
|
1.
|
Project Meeting
|
Every two weeks or as amended by OTAO and OTTR
|
The Recipient and the Government will participate in teleconferences every other week to discuss the performance of the Agreement. The Recipient will prepare a proposed agenda and will record, maintain and provide draft-meeting minutes to the OTTR for review and concurrence. The Recipient will send a final version of the meeting minutes to the OTTR. The OTTR will distribute the draft and final version to the OTAS and other the Government staff. (For avoidance of doubt, financial information is not expected at these updates, which will be technically focused. The Government reserves the right to include financial personnel in these project meetings, if needed.)
|
• The Recipient provides final agenda to the OTTR, OTAO, and the OTAS within 24 hours of meeting.
• OTTR (with OTAS concurrence) distributes agenda to the Government participants prior to meeting.
• The Recipient provides meeting minutes within 3 business days of the meeting.
• OTTR reviews and comments on minutes within 10 business days.
|
1 Electronic Copy emailed to the OTTR and OTAS; Final will be uploaded into eRoom
|
Every third month (Quarterly)
|
The Recipient and the Government will participate in quarterly face-to-face site visits or teleconferences in Washington,
D.C. and/or at work sites of the Recipient and its Sub-recipients to discuss the performance of the Agreement. The meetings will be used to discuss Agreement progress in relation to the Work Breakdown Structure (WBS), Integrated Master Schedule (IMS), and Agreement Performance Reports (APR) as well as study designs, technical, financial, regulatory, and ethical aspects of the program. These meetings may also include site visits to the Recipient and Sub-recipient’s facilities. The Recipient will provide data, reports, and presentations to groups of outside experts and USG personnel (subject to appropriate agreements to protect confidential or proprietary data).
|
• The Recipient shall provide itinerary and agenda at least 5 business days in advance of site visit.
• OTTR review and distributes itinerary and agenda within 3 business days of meeting.
|
#
|
Type of Deliverable
|
Frequency/Time Periods
|
Description of Deliverable
|
Reporting Procedures
|
Quantity/Form
|
|
|
MDCO/the Government Joint OTAR Oversight Committee meeting
(every 6 months or on an ad hoc basis as needed)
|
Members of the JOC will meet approximately every six months as detailed in Article IV.
|
• Meeting minutes will be taken by the Recipient and provided to the OTTR, OTAO, and OTAS within 5 business days of the meeting.
• OTTR will distribute the minutes to the JOC members and return any Government edits or comments to the Recipient within 3 business days of original receipt of the draft minutes.
|
|
2.
|
Monthly Status Report
|
The 30th calendar day of each month following the fractional portion of the initial month and first full month of the OTA award. Monthly reports are due each month within 30 days after the last day of that month, except on the month when the Annual Technical Progress Reports are due. The reporting period will reflect the prior month’s activities.
|
The Monthly Status Report will address the items listed below and cross-referenced to the Work Breakdown Structure (WBS), Scope of Work (SOW), Integrated Master Schedule (IMS), Performance Measurement Baseline Review (PMBR) report, and Agreement Performance Reports (APR).
1. An Executive Summary highlighting the progress, issues and relevant manufacturing, non-clinical toxicology, non-clinical, clinical and regulatory activities. The Executive Summary should highlight only critical issues for that reporting period and resolution approach; limited to 2-3 pages.
2. Progress in meeting contract milestones and targeted outcomes – broken out by subtasks within each milestone, overall project assessment, problems encountered and recommended solutions. The reports shall detail the planned and actual progress during the period covered, explaining occurrences of any differences between the two and the corrective steps.
3. The reports shall also include a three-month rolling forecast
|
Monthly Reports:
• The Recipient provides Monthly Status Report deliverables within 30 days after the last day of that month reflecting the prior month’s activities.
• OTTR and OTAS will review Monthly Reports with Recipient and provide feedback.
|
1 Electronic Copy emailed to the OTTR and OTAS; uploaded into eRoom.
Final will be uploaded into eRoom
|
#
|
Type of Deliverable
|
Frequency/Time Periods
|
Description of Deliverable
|
Reporting Procedures
|
Quantity/Form
|
|
|
|
of the key planned activities, referencing the WBS/IMS.
4. A tracking log of progress on regulatory submissions with the FDA number, description of submission, date of submission, status of submission and next steps.
5. Provide updated EVM/APR.
6. Estimated and Actual Expenses.
This report shall contain a narrative or table detailing whether there is a significant discrepancy (>[**]%) at this time between the % of work completed and the cumulative costs incurred to date. Monthly and actual expenses should be broken down to the appropriate WBS level. This section of the report should also contain estimates for the Sub- recipients’ expenses from the previous month if the Sub- recipient did not submit a bill in the previous month. If the Sub- recipient(s) was not working or did not incur any costs in the previous month, then a statement to this effect should be included in this report for those respective Sub- recipients. If the OTTR and OTAO are satisfied that the contractor’s EVM reporting (deliverable 04) is sufficient to convey this information, this section may be waived.
|
|
|
#
|
Type of Deliverable
|
Frequency/Time Periods
|
Description of Deliverable
|
Reporting Procedures
|
Quantity/Form
|
3.
|
Integrated Master Schedule (IMS)
|
Within 60 days of OTA award and updated monthly
|
The Recipient will provide an IMS and monthly status updates in the monthly report to reflect changes in schedule, performance, and critical path. The Recipient will include the Government Portfolio Management Milestones in their IMS and provide monthly updates within their IMS. The IMS will be a standalone schedule containing only those activities that are applicable to the SOW. Individual project schedules for the assets within the portfolio agreement will be provided on a monthly basis within the IMS.
|
• The Recipient shall provide an IMS within 60 days of OTA award and updated within 30 days after the last day of each month.
• IMS shall be in both PDF and Microsoft Project Form.
• The OTAO, OTAS and/or OTTR shall provide the Recipient with a written list of concerns in response to the Recipient’s submitted IMS, and the Recipient must address, in writing, all concerns raised by the OTAO, OTASA and/or OTTR within 10 business days of Recipient’s receipt of this list of concerns.
|
1 Electronic Copy (PDF and Microsoft Project Schedule (.mmp) format to OTTR and OTAS; Upload to eRoom.
|
4.
|
Earned Value Management (EVM)/
Agreement Performance Report (APR)
|
The 30th calendar day of each month following the fractional portion of the initial month and first full month of the OTA award. Financial Status Reports and updated monthly within 30 days after the last day of that month in the Project Status Report.
|
Recipient will provide a monthly Agreement Performance Report (APR) Format 1 at an agreed upon reporting level using the Government provided WBS and a Variance Analysis Report (Format 5).
The supplemental monthly CAP report shall contain, at the work package level, time phased budget (budgeted cost of work scheduled), earned value (budgeted cost of work performed), and actual costs of work performed as captured in Recipient’s EVM systems. The Recipient shall provide a rationale in the package of its use of % complete as EVMS methodology or identity if any other EVMS methodology is being used.
|
• Recipient shall provide EVM/APR as part of the Monthly Progress Report on the 30th day of the month after the end of each month reflecting the prior month’s activities.
• Recipient shall provide top level or key changes in baseline cost as a result of anticipated cost savings or risks.
• The OTAO, OTAS and/or OTTR may request, on a monthly or ad hoc basis that the Recipient provide raw data at a reporting level or lower level as the Government deems necessary.
• The OTAO, OTAS and/or OTTR may raise, in writing, concerns for Recipient to address; Recipient must address, in writing, all concerns raised by the OTAO, OTAS and/or OTTR.
• Reporting will commence after the EVM system has been implemented but no later than 3 months after start of Base Period.
|
1 Electronic Copy emailed to the OTTR and OTAS; uploaded into eRoom
|
#
|
Type of Deliverable
|
Frequency/Time Periods
|
Description of Deliverable
|
Reporting Procedures
|
Quantity/Form
|
5.
|
Risk Management Plan
|
90 days following OTA award and updated quarterly (additional submissions as requested by OTAS or OTTR)
|
The Recipient will provide a Risk Management Plan that outlines the impacts of each risk in relation to the cost, schedule and performance objectives. The Risk Management Plan will include risk mitigation strategies. Each risk mitigation strategy will capture how the corrective action will reduce impacts on cost, schedule and performance.
|
• The Recipient will provide a Risk Management Plan 90 days following OTA award and update Quarterly in their Monthly or Annual Project Status Reports.
• The OTAO, OTAS and/or OTTR will provide the Recipient with a written list of concerns (if any exist) in response to the Recipient’s submitted Risk Management Plan, and Recipient must address in writing all concerns raised by the OTAO, OTAS and /or OTTR within 20 business days of Recipient’s receipt of this list of concerns.
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
6.
|
Deviation Notification and Mitigation Strategy
|
As needed
|
Process for changing IMS activities associated with cost and schedule as baselined at the PMBR.
|
• The Recipient will notify The OTAO, OTAS and/or OTTR of significant changes to the IMS. This includes increases in cost above [**]% or schedule slippage of more than [**] days, which would require a POP extension. The Recipient will provide a high level management strategy for risk mitigation.
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
7.
|
In-Process Review Presentation
|
Annual or event driven review may occur following completion of a pre-defined stage of product development and prior to initiation of a new stage
|
The Recipient will provide a presentation to the Government and other Intergovernmental agency invitees on the Portfolio Progress at an In-Process Review meeting.
|
• The Recipient will provide an update to technical progress made towards Portfolio Progress at an In-Process Review meeting and provide the presentation to the Government 10 business days prior to the meeting.
|
1 Electronic to OTTR and OTAS; Upload to eRoom.
|
#
|
Type of Deliverable
|
Frequency/Time Periods
|
Description of Deliverable
|
Reporting Procedures
|
Quantity/Form
|
10.
|
Study Protocols
|
At least 10 business days prior to FDA Submission
|
The Recipient will provide Pre- Clinical/Non-Clinical/ Clinical Trial Protocols to OTAO, OTAS and/or OTTR for evaluation, prior to FDA submission.
The OTAS and OTTR reserve the right to request within the period of performance a non-proprietary Study Protocol for distribution within the United States Government (USG).
|
• The Recipient and the Government will collaboratively develop draft and final protocols for all Pre- Clinical/Non-Clinical/ Clinical activities within the SOW.
• The Recipient will submit draft and final protocols to OTAO, OTAS and/or OTTR for review and comment.
• If the draft protocols are to be submitted to the FDA, the Government review will take place prior to FDA submission.
• The OTAO, OTAS, and/or OTTR will return comments to Recipient on the protocols no later than 10 business days from the date of receipt.
• The Recipient will address, in writing, all concerns raised by the Government.
• The Recipient is not required to make any protocol revisions based on the Government’s concerns and/or recommendations.
• In the event that the Government disagrees with the final study protocol design, the OTAO, OTAS, and/or OTTR will notify the Recipient of non- concurrence in writing.
• Final FDA submissions shall be submitted to OTAO, OTAS and/or OTTR concurrently or no later than 5 calendar days after its submission to CDER.
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
#
|
Type of Deliverable
|
Frequency/Time Periods
|
Description of Deliverable
|
Reporting Procedures
|
Quantity/Form
|
11.
|
Study Reports
|
Within 10 (ten) calendar days of the reports being available to MDCO and 10 business days prior to anticipated submission to FDA
|
The OTAS and OTTR reserve the right to request within the period of performance a non-proprietary Study Report for distribution within the USG.
The Recipient will submit an interim study report to the OTAO, OTAS and/or OTTR for any severable discrete work segments. If funding for a severable study is scheduled in two separate periods of performance then an interim study report is due on or before the completion date of the POP.
|
• The Recipient will provide Draft and Final Pre-Clinical/Non- Clinical Study Reports to the OTAO, OTAS and/or OTTR for review and comment within 10 (ten) calendar days of these reports being available to the Recipient.
• The Recipient will submit proposed Pre-Clinical/Non- Clinical Study Report to the OTAO, OTAS and/or OTTR at least 10 business days prior to the anticipated FDA Submission date.
If corrective action is recommended, Recipient will address, in writing or by corrective action, all concerns raised by the Government prior to FDA submission.
• Final FDA submissions shall be provided to the OTAO, OTAS and/or OTTR concurrently or no later than 2 business days of its submission to CDER.
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
12.
|
Manufacturing Campaign Reports (For avoidance of doubt, this relates to the clinical supply material during the PoP and not once the product is commercially available)
|
Within 30 calendar days after receipt of batch records and 10 business days prior to submission to FDA
|
The OTAS and OTTR reserve the right to request within the period of performance non-proprietary Manufacturing Campaign Reports for distribution within the USG.
|
• The Recipient will submit Batch Analysis Reports or Manufacturing Campaign Reports to the OTAO, OTAS and/or OTTR at least 10 business days prior to anticipate FDA Submission.
• If corrective action is recommended, Recipient will address in writing or by corrective action all concerns raised by the Government.
• The Recipient will consider revising reports to address the Government’s concerns and/or recommendations prior to FDA submission.
• Final FDA submissions shall be submitted to the OTAO, OTAS and/or OTTR electronically concurrently or no later than five calendar days after its submission to CDER.
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
#
|
Type of Deliverable
|
Frequency/Time Periods
|
Description of Deliverable
|
Reporting Procedures
|
Quantity/Form
|
17.
|
QA Audit Reports
|
5 business days of report completion
|
The Recipient will inform the OTTR and OTAS of upcoming, ongoing, or recent audits/site visits of Sub- recipients as part of the weekly communications, including goals and agenda. The Government reserves the right to participate in the QA audits. Upon completion of the audit/site visit the Recipient shall provide a report capturing the findings, results and next steps in proceeding with the Sub- recipient. If action is requested of the Sub-recipient, details addressing areas of non- conformance to FDA regulations for GLP, GMP, or GCP guidelines, as identified in the audit report, must be provided to the OTAO, OTAS and/or OTTR. Recipient shall provide responses from the Sub- recipients to address these concerns and plans for corrective action execution
For avoidance of doubt, as our Sub-recipients may be involved in other activities for the Recipient, the reportable audit information will only pertain to that which materially affects those programs funded under the portfolio partnership.
|
• The Recipient will inform the OTTR and OTAS of upcoming, ongoing or recent audits/site visits of Sub-recipients.
• The Recipient will notify the OTTR and OTAS within 5 business days of report completion.
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
18.
|
Government Audit
|
Ad Hoc
|
The Recipient shall accommodate for periodic or ad hoc site visits by the Government. If the Government, Recipient or other parties identifies any issues during an audit, Recipient shall capture the issues, identify potential solutions and provide a report to the OTAO, OTAS and/or OTTR.
|
• If the Government, the Recipient or other parties identifies any issues during an audit, Recipient shall capture the issues, identify potential solutions and provide a report to the OTAO, OTAS and/or OTTR within 10 business days.
• The OTTR and OTAS will review the deliverable and provide a response to Recipient.
• Once any corrective action undertaken by Recipient is completed, Recipient will provide a final report to the OTAO, OTAS and/or OTTR.
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
#
|
Type of Deliverable
|
Frequency/Time Periods
|
Description of Deliverable
|
Reporting Procedures
|
Quantity/Form
|
19.
|
Technical Documents
|
Within 10 business days upon request by OTAS/OTTR and 10 business days prior to anticipated submission to FDA
|
The Recipient will provide the OTTR and OTAS upon request with deliverables from the following contract funded activities: Process Development Reports, Assay Qualification Plan/Report, Assay Validation Plan/Report, Assay Technology Transfer Report, Batch Records, SOPs, Master Production Records, and Certificate of Analysis.
(The OTAS and OTTR reserve the right to request within the period of performance non-proprietary technical Documents for distribution within the USG).
|
• The Recipient will provide technical documents within 10 business days upon request by OTAS/OTTR.
• If additional time is required, Recipient will request additional time from the OTAO, OTAS and/or OTTR on a per deliverable basis.
• If corrective action is recommended, Recipient will address, in writing or by corrective action, concerns raised by the OTAO, OTAS and/or OTTR.
• The Recipient will submit proposed FDA technical documents to the OTAO, OTAS and/or OTTR at least 10 business days prior to anticipate FDA submission.
• The Recipient will consider revising technical documents to address the Government’s concerns and recommendation prior to FDA submission.
|
For Final Documents:
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
20.
|
Animal Model or Other Technology Transfer Package
|
Within 10 business days of request by OTAS/OTTR
|
The Recipient shall provide Animal Model or Other Technology Transfer Package relevant data.
|
• The Recipient will provide Animal Model or other Technology Transfer Package within 10 business days of request by OTAS/OTTR.
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
21.
|
Raw Data or Data Analysis
|
Within 20 business days, or as available, after receipt of request by OTAS/OTTR
|
The Recipient shall provide Raw Data or Data Analysis for review by the OTAO, OTAS and/or OTTR, if requested. (For avoidance of doubt, clinical data will be subject to human subject privacy policies.)
|
• The Recipient will provide Raw Data or Data Analysis within 20 business days (or as available) of request by OTAS/OTTR.
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
#
|
Type of Deliverable
|
Frequency/Time Periods
|
Description of Deliverable
|
Reporting Procedures
|
Quantity/Form
|
22.
|
Publications
|
No less than thirty (30) calendar days for manuscripts and fifteen (15) calendar days for abstracts before submission for public presentation or publication
|
Any manuscript or scientific meeting abstract containing data generated under this agreement period of performance must be submitted to the OTAO, OTAS and/or OTTR for review prior to submission. Acknowledgment of Government funding must be included
|
• Recipient must submit all manuscript or scientific meeting abstract to PO and CO prior to submission or presentation by 30 business days for manuscripts and 10 business days for abstracts or posters
• Recipient must address in writing all concerns raised by the Government in writing
• Final manuscript submissions shall be submitted to the OTAO, OTAS and/or OTTR concurrently or no later than one (1) calendar day of its submission
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
23.
|
Press Releases
|
Not less than five (5) business days prior to issuance and final press releases no later than one (1) calendar day prior to issuance
|
Recipient agrees to accurately and factually represent the work conducted under this contract in all press releases
|
• Recipient shall ensure that the CO has received and approved an advanced copy of any press release concerning this contract not less than 5 business days prior to the issuance of the press release
• If corrective action is required, the Recipient agrees to accurately and factually represent the work conducted under this contract in all press releases
• Any final press releases shall be submitted to the OTAO, OTAS and/or OTTR no later than one (1) calendar day prior to its release
|
1 Electronic Copy to OTTR and OTAS; Upload to eRoom.
|
Contract Milestones
|
|||||||
Mstn #
|
Milestones
|
Deliverable(s)
|
Go Criteria
|
No-Go Criteria
|
WBS #
|
Date
|
CLIN
|
1.
|
[**]
|
[**]
|
[**]
|
[**]
|
1.6.2
|
[**]
|
1
|
2.
|
[**]
|
[**]
|
[**]
|
[**]
|
1.6.4
|
[**]
|
1
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of The Medicines Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Clive A. Meanwell
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Clive A. Meanwell
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Chief Executive Officer
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Dated:
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October 27, 2016
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1.
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I have reviewed this Quarterly Report on Form 10-Q of The Medicines Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
/s/ William B. O'Connor
|
|
|
|
William B. O'Connor
|
|
|
|
Chief Financial Officer
|
Dated:
|
October 27, 2016
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
By:
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/s/ Clive A. Meanwell
|
|
|
|
|
Clive A. Meanwell
|
|
|
|
|
Chief Executive Officer
|
Dated:
|
October 27, 2016
|
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
By:
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/s/ William B. O'Connor
|
|
|
|
|
William B. O'Connor
|
|
|
|
|
Chief Financial Officer
|
Dated:
|
October 27, 2016
|
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