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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Emerging growth company
o
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(Do not check if a smaller reporting company)
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Page
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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,
2017 |
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December 31,
2016 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
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$
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166,734
|
|
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$
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541,835
|
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Available for sale securities
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42,168
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—
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|
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Accounts receivable, net of allowances of approximately $6.7 million and $2.9 million at
September 30, 2017 and December 31, 2016, respectively |
7,793
|
|
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22,087
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Inventory, net
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67,169
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70,898
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|
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Prepaid expenses and other current assets
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13,974
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|
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19,133
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|
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Total current assets
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297,838
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653,953
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|
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Fixed assets, net
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18,022
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30,961
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In-process research & development
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—
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253,620
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|
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Product licenses, net
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—
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26,987
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|
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Developed product rights, net
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285,965
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334,614
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Goodwill
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255,629
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255,629
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|
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Restricted cash
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5,048
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5,032
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Contingent purchase price from sale of businesses
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143,700
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143,700
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Other assets
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778
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|
715
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|
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Total assets
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$
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1,006,980
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|
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$
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1,705,211
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
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$
|
11,698
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|
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$
|
28,450
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Accrued expenses
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81,246
|
|
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88,524
|
|
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Current portion of contingent purchase price
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28,700
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55,000
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|
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Convertible senior notes
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—
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53,749
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|
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Deferred revenue
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7,269
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18,902
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|
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Total current liabilities
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128,913
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|
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244,625
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|
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Contingent purchase price
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34,183
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82,289
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|
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Convertible senior notes
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642,655
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|
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623,584
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|
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Deferred tax liabilities
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—
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89,992
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|
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Other liabilities
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13,174
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11,705
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Total liabilities
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818,925
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1,052,195
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Equity component of currently redeemable convertible senior notes (Note 10)
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—
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1,033
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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; 75,791,437 issued and 72,778,294 outstanding at September 30, 2017 and 73,212,545 issued and 71,019,563 outstanding at December 31, 2016
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76
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73
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Additional paid-in capital
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1,362,040
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1,256,890
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Treasury stock, at cost; 3,013,143 and 2,192,982 shares at September 30, 2017 and December 31, 2016, respectively
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(90,016
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)
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(50,000
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)
|
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Accumulated deficit
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(1,079,096
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)
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(548,983
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)
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Accumulated other comprehensive loss
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(4,949
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)
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(5,479
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)
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Total The Medicines Company stockholders’ equity
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188,055
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652,501
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Non-controlling interest in joint venture
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—
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(518
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)
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Total stockholders’ equity
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188,055
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651,983
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Total liabilities and stockholders’ equity
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$
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1,006,980
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$
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1,705,211
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
||||||||||||
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2017
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2016
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2017
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|
2016
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||||||||
Net product revenues
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$
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10,935
|
|
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$
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18,843
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$
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38,135
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$
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80,542
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Royalty revenues
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5,936
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18,756
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21,694
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62,094
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Total net revenues
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16,871
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37,599
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59,829
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|
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142,636
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Operating expenses:
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|
|
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Cost of product revenues
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9,601
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20,777
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39,436
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54,804
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|
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Asset impairment charges
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—
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|
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—
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|
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329,097
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|
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—
|
|
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Research and development
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45,838
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23,537
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117,337
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94,595
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|
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Selling, general and administrative
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47,198
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69,022
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159,980
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242,478
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|
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Total operating expenses
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102,637
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113,336
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645,850
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391,877
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Loss from operations
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(85,766
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)
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(75,737
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)
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(586,021
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)
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(249,241
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)
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Co-promotion and license income
|
769
|
|
|
757
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2,283
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|
|
3,073
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|
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Gain on sale of assets
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—
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|
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—
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|
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—
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288,301
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|
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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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(5,380
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)
|
||||
Interest expense
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(11,886
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)
|
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(12,089
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)
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(36,898
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)
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(32,198
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)
|
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Other income
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71
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|
865
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|
|
916
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|
741
|
|
||||
(Loss) income from continuing operations before income taxes
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(96,812
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)
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(86,204
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)
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(619,720
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)
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|
5,296
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|
||||
Benefit (provision) for income taxes
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66,637
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(163
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)
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89,607
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|
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(220
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)
|
||||
Net (loss) income from continuing operations
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(30,175
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)
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(86,367
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)
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(530,113
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)
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|
5,076
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|
||||
Income (loss) from discontinued operations, net of tax
|
—
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|
96
|
|
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—
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|
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(1,390
|
)
|
||||
Net (loss) income
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(30,175
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)
|
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(86,271
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)
|
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(530,113
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)
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|
3,686
|
|
||||
Net loss attributable to non-controlling interest
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—
|
|
|
13
|
|
|
—
|
|
|
50
|
|
||||
Net (loss) income attributable to The Medicines Company
|
$
|
(30,175
|
)
|
|
$
|
(86,258
|
)
|
|
$
|
(530,113
|
)
|
|
$
|
3,736
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts attributable to The Medicines Company:
|
|
|
|
|
|
|
|
||||||||
Net (loss) income from continuing operations
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$
|
(30,175
|
)
|
|
$
|
(86,354
|
)
|
|
$
|
(530,113
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)
|
|
$
|
5,126
|
|
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
96
|
|
|
—
|
|
|
(1,390
|
)
|
||||
Net (loss) income attributable to The Medicines Company
|
$
|
(30,175
|
)
|
|
$
|
(86,258
|
)
|
|
$
|
(530,113
|
)
|
|
$
|
3,736
|
|
|
|
|
|
|
|
|
|
||||||||
Basic (loss) earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
|
|
||||||||
(Loss) earnings from continuing operations
|
$
|
(0.42
|
)
|
|
$
|
(1.23
|
)
|
|
$
|
(7.39
|
)
|
|
$
|
0.07
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
||||
Basic (loss) earnings per share
|
$
|
(0.42
|
)
|
|
$
|
(1.23
|
)
|
|
$
|
(7.39
|
)
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted (loss) earnings per common share attributable to The Medicines Company:
|
|
|
|
|
|
|
|
||||||||
(Loss) earnings from continuing operations
|
$
|
(0.42
|
)
|
|
$
|
(1.23
|
)
|
|
$
|
(7.39
|
)
|
|
$
|
0.07
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
||||
Diluted (loss) earnings per share
|
$
|
(0.42
|
)
|
|
$
|
(1.23
|
)
|
|
$
|
(7.39
|
)
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
72,286
|
|
|
70,194
|
|
|
71,763
|
|
|
69,711
|
|
||||
Diluted
|
72,286
|
|
|
70,194
|
|
|
71,763
|
|
|
72,920
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net (loss) income
|
$
|
(30,175
|
)
|
|
$
|
(86,271
|
)
|
|
$
|
(530,113
|
)
|
|
$
|
3,686
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
487
|
|
|
(70
|
)
|
|
527
|
|
|
208
|
|
||||
Unrealized gain on available for sale securities
|
10
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,665
|
)
|
||||
Other comprehensive income (loss)
|
497
|
|
|
(70
|
)
|
|
530
|
|
|
(9,457
|
)
|
||||
Comprehensive loss
|
(29,678
|
)
|
|
(86,341
|
)
|
|
(529,583
|
)
|
|
(5,771
|
)
|
||||
Less: comprehensive loss attributable to non-controlling interest
|
—
|
|
|
13
|
|
|
—
|
|
|
50
|
|
||||
Comprehensive loss attributable to The Medicines Company
|
$
|
(29,678
|
)
|
|
$
|
(86,328
|
)
|
|
$
|
(529,583
|
)
|
|
$
|
(5,721
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net (loss) income
|
$
|
(530,113
|
)
|
|
$
|
3,686
|
|
Adjustments to reconcile net (loss) income to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
17,674
|
|
|
22,517
|
|
||
Asset impairment charges
|
329,097
|
|
|
—
|
|
||
Amortization of debt discount
|
20,325
|
|
|
19,392
|
|
||
Unrealized foreign currency transaction losses (gains), net
|
1,276
|
|
|
(125
|
)
|
||
Stock compensation expense
|
24,078
|
|
|
24,541
|
|
||
Gain on sale of businesses
|
—
|
|
|
(289,305
|
)
|
||
Loss on disposal of fixed assets
|
72
|
|
|
1
|
|
||
Deferred tax benefit
|
(89,992
|
)
|
|
(1,661
|
)
|
||
Extinguishment of debt
|
—
|
|
|
5,380
|
|
||
Reserve for excess or obsolete inventory
|
1,797
|
|
|
7,350
|
|
||
Changes in contingent purchase price
|
(11,788
|
)
|
|
13,573
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
14,476
|
|
|
24,125
|
|
||
Inventory, net
|
1,976
|
|
|
(14,077
|
)
|
||
Prepaid expenses and other current assets
|
5,886
|
|
|
1,907
|
|
||
Accounts payable
|
(16,898
|
)
|
|
(17,265
|
)
|
||
Accrued expenses
|
(5,245
|
)
|
|
(49,110
|
)
|
||
Deferred revenue
|
(11,707
|
)
|
|
(5,761
|
)
|
||
Payments on contingent purchase price
|
(52,499
|
)
|
|
—
|
|
||
Other liabilities
|
(3,189
|
)
|
|
(6,153
|
)
|
||
Net cash used in operating activities
|
(304,774
|
)
|
|
(260,985
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of fixed assets
|
(4,525
|
)
|
|
(920
|
)
|
||
Purchases of available for sale securities
|
(131,560
|
)
|
|
—
|
|
||
Proceeds from maturities and sales of available for sale securities
|
89,344
|
|
|
—
|
|
||
Payments for intangible assets
|
—
|
|
|
(10,000
|
)
|
||
Proceeds from sale of businesses
|
—
|
|
|
437,875
|
|
||
Change in restricted cash
|
10
|
|
|
(3,660
|
)
|
||
Net cash (used in) provided by investing activities
|
(46,731
|
)
|
|
423,295
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuances of common stock, net
|
40,708
|
|
|
27,404
|
|
||
Payments on contingent purchase price
|
(10,119
|
)
|
|
(7,921
|
)
|
||
Proceeds from the issuance of convertible senior notes
|
—
|
|
|
402,500
|
|
||
Repayments of convertible senior notes
|
(55,000
|
)
|
|
(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
|
)
|
||
Purchase of shares of non-controlling interest
|
(167
|
)
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
(24,578
|
)
|
|
65,687
|
|
||
Effect of exchange rate changes on cash
|
982
|
|
|
(814
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
(375,101
|
)
|
|
227,183
|
|
||
Cash and cash equivalents at beginning of period
|
541,835
|
|
|
373,173
|
|
||
Cash and cash equivalents at end of period
|
$
|
166,734
|
|
|
$
|
600,356
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
22,561
|
|
|
$
|
11,891
|
|
Non-cash investing and financing activities
|
|
|
|
||||
Issuance of common stock upon conversion of convertible notes
|
$
|
32,018
|
|
|
$
|
—
|
|
Receipt of common stock upon settlement of 2017 Note hedge
|
$
|
40,015
|
|
|
$
|
—
|
|
Issuance of common stock upon the exercise of the 2017 Warrants
|
$
|
887
|
|
|
$
|
—
|
|
Operating expenses:
|
|
||
Cost of product revenue
|
$
|
8,458
|
|
Asset impairment charges
|
264,097
|
|
|
Research and development
|
1,032
|
|
|
Selling, general and administrative
|
3,331
|
|
|
Total operating expenses
|
276,918
|
|
|
Loss from operations
|
(276,918
|
)
|
|
(Loss) income from continuing operations before income taxes
|
(276,918
|
)
|
|
Benefit (provision) for income taxes
|
—
|
|
|
Net (loss) income from continuing operations
|
$
|
(276,918
|
)
|
|
As of September 30, 2017
|
|
||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Unrealized
Gain
|
|
||||||
|
(in thousands)
|
|
||||||||||
Asset backed securities
|
8,192
|
|
|
8,192
|
|
|
—
|
|
|
|||
Corporate debt securities
|
33,973
|
|
|
33,976
|
|
|
3
|
|
|
|||
Total
|
$
|
42,165
|
|
|
$
|
42,168
|
|
|
$
|
3
|
|
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities. The Company’s Level 1 assets consist of money market investments.
|
Level 2
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Fair values are determined by utilizing quoted prices for similar assets and liabilities in active markets or other market observable inputs such as interest rates and yield curves. The Company’s Level 2 assets consist of U.S. government debt, corporate debt securities and asset back securities.
|
Level 3
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s Level 3 assets and liabilities consist of the contingent purchase prices associated with the Company’s business combinations, 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, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||||||||||
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, 2017
|
|
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, 2016
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
|
$
|
14,686
|
|
|
|
|
$
|
—
|
|
|
$
|
14,686
|
|
|
$
|
56,097
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56,097
|
|
||
Available for sale securities
|
—
|
|
|
42,168
|
|
|
—
|
|
|
42,168
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|||||
Total assets at fair value
|
$
|
14,686
|
|
|
$
|
42,168
|
|
|
$
|
—
|
|
|
$
|
56,854
|
|
|
$
|
56,097
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56,097
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase price
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,884
|
|
|
$
|
62,884
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
137,289
|
|
|
$
|
137,289
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
62,884
|
|
|
$
|
62,884
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
137,289
|
|
|
$
|
137,289
|
|
|
|
Fair Value as of
September 30, 2017 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
(Weighted Average)
|
||
|
|
(in thousands)
|
|
|
|
|
|
|
||
Targanta:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
1,584
|
|
|
Probability-adjusted discounted cash flow
|
|
Probability of success
|
|
5%
|
|
|
|
|
|
|
Period in which milestone is expected to be achieved
|
|
2021
|
||
|
|
|
|
|
|
Discount rate
|
|
11%
|
||
Rempex:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price: Event-based milestones
|
|
$
|
47,200
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of successes
|
|
18% - 90% (71%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2018 - 2024
|
||
|
|
|
|
|
|
Discount rate
|
|
4.4% - 7.3%
|
||
Contingent purchase price: Sales-based milestones
|
|
$
|
14,100
|
|
|
Risk-adjusted revenue simulation
|
|
Probabilities of successes
|
|
15% - 85% (72%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2020 - 2022
|
||
|
|
|
|
|
|
Discount rate
|
|
5.5% - 6.7%
|
|
|
Fair Value as of
December 31, 2016 |
|
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
|
|
2021
|
||
|
|
|
|
|
|
Discount rate
|
|
11%
|
||
Incline:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
1,269
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of successes
|
|
5%
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2019
|
||
|
|
|
|
|
|
Discount rate
|
|
18%
|
||
Rempex:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price: Event-based milestones
|
|
$
|
95,800
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of successes
|
|
18% - 95% (78%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2017 - 2024
|
||
|
|
|
|
|
|
Discount rate
|
|
5.2% - 8.5%
|
||
Contingent purchase price: Sales-based milestones
|
|
$
|
20,300
|
|
|
Risk-adjusted revenue simulation
|
|
Probabilities of successes
|
|
16% - 65% (56%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2018 - 2022
|
||
|
|
|
|
|
|
Discount rate
|
|
6.6% - 8.2%
|
||
Annovation:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price
|
|
$
|
14,063
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of successes
|
|
9% - 50% (34%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2018 - 2031
|
||
|
|
|
|
|
|
Discount rate
|
|
6.0% - 10.0%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance at beginning of period
|
$
|
111,171
|
|
|
$
|
118,571
|
|
|
$
|
137,289
|
|
|
$
|
123,757
|
|
Payments
|
(40,616
|
)
|
|
(1,564
|
)
|
|
(62,618
|
)
|
|
(8,811
|
)
|
||||
Fair value adjustments to contingent purchase prices included in net loss
|
(7,672
|
)
|
|
12,403
|
|
|
(11,788
|
)
|
|
14,464
|
|
||||
Balance at end of period
|
$
|
62,883
|
|
|
$
|
129,410
|
|
|
$
|
62,883
|
|
|
$
|
129,410
|
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
|
(in thousands)
|
||||||
Raw materials
|
|
$
|
57,818
|
|
|
$
|
56,962
|
|
Work-in-progress
|
|
4,615
|
|
|
12,033
|
|
||
Finished goods
|
|
4,736
|
|
|
1,903
|
|
||
Total
|
|
$
|
67,169
|
|
|
$
|
70,898
|
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Product licenses
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,000
|
|
|
$
|
(3,013
|
)
|
|
$
|
26,987
|
|
Developed product rights
(2)
|
309,180
|
|
|
(23,215
|
)
|
|
285,965
|
|
|
370,560
|
|
|
(35,946
|
)
|
|
334,614
|
|
||||||
Total amortizable intangible assets
|
309,180
|
|
|
(23,215
|
)
|
|
285,965
|
|
|
400,560
|
|
|
(38,959
|
)
|
|
361,601
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In-process research and development
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
253,620
|
|
|
$
|
—
|
|
|
$
|
253,620
|
|
Total intangible assets not subject to amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
253,620
|
|
|
—
|
|
|
253,620
|
|
||||||
Total intangible assets
|
$
|
309,180
|
|
|
$
|
(23,215
|
)
|
|
$
|
285,965
|
|
|
$
|
654,180
|
|
|
$
|
(38,959
|
)
|
|
$
|
615,221
|
|
(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.
|
•
|
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, 2017
|
|
December 31, 2016
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
402,500
|
|
|
$
|
402,500
|
|
Less: Debt discount, net
(1)
|
|
(93,778
|
)
|
|
(103,162
|
)
|
||
Net carrying amount
|
|
$
|
308,722
|
|
|
$
|
299,338
|
|
(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,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Contractual interest expense
|
$
|
2,767
|
|
|
$
|
2,777
|
|
|
$
|
8,293
|
|
|
$
|
3,381
|
|
Amortization of debt discount
|
3,205
|
|
|
2,923
|
|
|
9,384
|
|
|
3,650
|
|
||||
Total
|
$
|
5,972
|
|
|
$
|
5,700
|
|
|
$
|
17,677
|
|
|
$
|
7,031
|
|
Effective interest rate of the liability component
|
7.5
|
%
|
|
7.5
|
%
|
|
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, 2017
|
|
December 31, 2016
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
399,997
|
|
|
$
|
400,000
|
|
Less: Debt discount, net
(1)
|
|
(66,064
|
)
|
|
(75,754
|
)
|
||
Net carrying amount
|
|
$
|
333,933
|
|
|
$
|
324,246
|
|
(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,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Contractual interest expense
|
$
|
2,500
|
|
|
$
|
2,500
|
|
|
$
|
7,500
|
|
|
$
|
7,500
|
|
Amortization of debt discount
|
3,298
|
|
|
3,078
|
|
|
9,690
|
|
|
9,043
|
|
||||
Total
|
$
|
5,798
|
|
|
$
|
5,578
|
|
|
$
|
17,190
|
|
|
$
|
16,543
|
|
Effective interest rate of the liability component
|
6.5
|
%
|
|
6.5
|
%
|
|
6.5
|
%
|
|
6.5
|
%
|
Liability component
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
—
|
|
|
$
|
55,000
|
|
Less: Debt discount, net
(1)
|
|
—
|
|
|
(1,251
|
)
|
||
Net carrying amount
|
|
$
|
—
|
|
|
$
|
53,749
|
|
(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,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Contractual interest expense
|
$
|
—
|
|
|
$
|
189
|
|
|
$
|
315
|
|
|
$
|
1,912
|
|
Amortization of debt discount
|
—
|
|
|
621
|
|
|
1,251
|
|
|
6,699
|
|
||||
Total
|
$
|
—
|
|
|
$
|
810
|
|
|
$
|
1,566
|
|
|
$
|
8,611
|
|
Effective interest rate of the liability component
|
6.02
|
%
|
|
6.02
|
%
|
|
6.02
|
%
|
|
6.02
|
%
|
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
|
Foreign currency translation adjustment
|
|
Unrealized loss on available for sale securities
|
|
Total
|
|
Foreign currency translation adjustment
|
|
Unrealized loss on available for sale securities
|
|
Total
|
||||||||||||
|
|
(in thousands)
|
||||||||||||||||||||||
Balance at beginning of period
|
|
$
|
(5,439
|
)
|
|
$
|
(7
|
)
|
|
$
|
(5,446
|
)
|
|
$
|
(5,414
|
)
|
|
$
|
—
|
|
|
$
|
(5,414
|
)
|
Other comprehensive loss before reclassifications
|
|
487
|
|
|
10
|
|
|
497
|
|
|
(70
|
)
|
|
—
|
|
|
(70
|
)
|
||||||
Total other comprehensive loss
|
|
487
|
|
|
10
|
|
|
497
|
|
|
(70
|
)
|
|
—
|
|
|
(70
|
)
|
||||||
Balance at end of period
|
|
$
|
(4,952
|
)
|
|
$
|
3
|
|
|
$
|
(4,949
|
)
|
|
$
|
(5,484
|
)
|
|
$
|
—
|
|
|
$
|
(5,484
|
)
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
|
Foreign currency translation adjustment
|
|
Unrealized 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
|
|
$
|
(5,479
|
)
|
|
$
|
—
|
|
|
$
|
(5,479
|
)
|
|
$
|
3,924
|
|
|
$
|
49
|
|
|
$
|
3,973
|
|
Other comprehensive income before reclassifications
|
|
527
|
|
|
3
|
|
|
530
|
|
|
208
|
|
|
—
|
|
|
208
|
|
||||||
Amounts reclassified from accumulated other comprehensive income
(1) (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,616
|
)
|
|
(49
|
)
|
|
(9,665
|
)
|
||||||
Total other comprehensive (loss) income
|
|
527
|
|
|
3
|
|
|
530
|
|
|
(9,408
|
)
|
|
(49
|
)
|
|
(9,457
|
)
|
||||||
Balance at end of period
|
|
$
|
(4,952
|
)
|
|
$
|
3
|
|
|
$
|
(4,949
|
)
|
|
$
|
(5,484
|
)
|
|
$
|
—
|
|
|
$
|
(5,484
|
)
|
(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,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
($ in thousands)
|
||||||||||||||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
$
|
15,460
|
|
|
91.6
|
%
|
|
$
|
35,662
|
|
|
94.8
|
%
|
|
$
|
55,062
|
|
|
92.0
|
%
|
|
$
|
133,273
|
|
|
93.3
|
%
|
Europe
|
1,208
|
|
|
7.2
|
%
|
|
1,726
|
|
|
4.6
|
%
|
|
4,355
|
|
|
7.3
|
%
|
|
7,544
|
|
|
5.3
|
%
|
||||
Rest of world
|
203
|
|
|
1.2
|
%
|
|
211
|
|
|
0.6
|
%
|
|
412
|
|
|
0.7
|
%
|
|
1,819
|
|
|
1.4
|
%
|
||||
Total net revenues
|
$
|
16,871
|
|
|
100
|
%
|
|
$
|
37,599
|
|
|
100.0
|
%
|
|
$
|
59,829
|
|
|
100.0
|
%
|
|
$
|
142,636
|
|
|
100.0
|
%
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||
|
($ in thousands)
|
||||||||||||
Long-lived assets:
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
708,309
|
|
|
99.9
|
%
|
|
$
|
1,047,098
|
|
|
99.6
|
%
|
Europe
|
833
|
|
|
0.1
|
%
|
|
4,160
|
|
|
0.4
|
%
|
||
Total long-lived assets
|
$
|
709,142
|
|
|
100.0
|
%
|
|
$
|
1,051,258
|
|
|
100.0
|
%
|
|
Balance as of January 1, 2017
|
|
Expenses,
Net
|
|
Cash
|
|
Noncash
|
|
Balance as of September 30, 2017
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Employee severance and other personnel benefits:
|
$
|
—
|
|
|
$
|
5.9
|
|
|
$
|
(5.1
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
0.7
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended September 30,
|
||||
|
2016
|
|
2016
|
||||
|
|
||||||
Net product revenues
|
$
|
28
|
|
|
$
|
78
|
|
Operating expenses:
|
|
|
|
||||
Cost of product revenue
|
(9
|
)
|
|
1,695
|
|
||
Research and development
|
(15
|
)
|
|
104
|
|
||
Selling, general and administrative
|
(44
|
)
|
|
634
|
|
||
Total operating expenses
|
(68
|
)
|
|
2,433
|
|
||
Income (loss) from operations
|
96
|
|
|
(2,355
|
)
|
||
Gain from sale of business
|
—
|
|
|
1,004
|
|
||
Other expense, net
|
—
|
|
|
(39
|
)
|
||
Income (loss) from discontinued operations before income taxes
|
96
|
|
|
(1,390
|
)
|
||
Benefit for income taxes
|
—
|
|
|
—
|
|
||
Income (loss) from discontinued operations, net of tax
|
$
|
96
|
|
|
$
|
(1,390
|
)
|
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
|
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
|
Vabomere
|
|
Approved in the United States; MAA submission in the European Union accepted for review in third quarter 2017
|
|
Combination of vaborbactam, a proprietary, novel beta-lactamase inhibitor, with meropenem, a carbapenem antibiotic
|
|
Treatment of adult patients with complicated urinary tract infections, including pyelonephritis, caused by designated susceptible Enterobacteriaceae – Escherichia coli, Klebsiella pneumoniae and Enterobacter cloacae species complex
|
Research and Development Stage
|
|
|
|
|
|
|
Inclisiran
|
|
Phase 3
|
|
PCSK-9 gene antagonist addressing low-density lipoprotein cholesterol disease modification
|
|
Treatment of hypercholesterolemia
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Net product revenues
|
$
|
10,935
|
|
|
$
|
18,843
|
|
|
$
|
(7,908
|
)
|
|
(42.0
|
)%
|
|
$
|
38,135
|
|
|
$
|
80,542
|
|
|
$
|
(42,407
|
)
|
|
(52.7
|
)%
|
Royalty revenues
|
5,936
|
|
|
18,756
|
|
|
(12,820
|
)
|
|
(68.4
|
)%
|
|
21,694
|
|
|
62,094
|
|
|
(40,400
|
)
|
|
(65.1
|
)%
|
||||||
Total net revenues
|
$
|
16,871
|
|
|
$
|
37,599
|
|
|
$
|
(20,728
|
)
|
|
(55.1
|
)%
|
|
$
|
59,829
|
|
|
$
|
142,636
|
|
|
$
|
(82,807
|
)
|
|
(58.1
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Angiomax
|
$
|
1,972
|
|
|
$
|
10,154
|
|
|
$
|
(8,182
|
)
|
|
(80.6
|
)%
|
|
$
|
14,172
|
|
|
$
|
42,837
|
|
|
$
|
(28,665
|
)
|
|
(66.9
|
)%
|
Other products
|
8,963
|
|
|
8,689
|
|
|
274
|
|
|
3.2
|
%
|
|
23,963
|
|
|
37,705
|
|
|
(13,742
|
)
|
|
(36.4
|
)%
|
||||||
Net product revenues
|
$
|
10,935
|
|
|
$
|
18,843
|
|
|
$
|
(7,908
|
)
|
|
(42.0
|
)%
|
|
$
|
38,135
|
|
|
$
|
80,542
|
|
|
$
|
(42,407
|
)
|
|
(52.7
|
)%
|
•
|
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, and for the
nine months ended September 30, 2016
, 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.
|
•
|
expenses associated with the discontinuance and market withdrawal of Ionsys in the United States market, including a write-off of inventory, severance and other exit costs.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2017
|
|
% of Total
|
|
2016
|
|
% of Total
|
|
2017
|
|
% of Total
|
|
2016
|
|
% of Total
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||
Manufacturing/Logistics
|
$
|
5,760
|
|
|
60.0
|
%
|
|
$
|
7,134
|
|
|
34.3
|
%
|
|
$
|
23,075
|
|
|
58.5
|
%
|
|
$
|
29,175
|
|
|
53.2
|
%
|
Royalties
|
804
|
|
|
8.4
|
%
|
|
715
|
|
|
3.5
|
%
|
|
2,259
|
|
|
5.7
|
%
|
|
5,063
|
|
|
9.2
|
%
|
||||
Impairment of inventory and amortization of acquired product rights and intangible assets
|
3,037
|
|
|
31.6
|
%
|
|
12,928
|
|
|
62.2
|
%
|
|
14,102
|
|
|
35.8
|
%
|
|
20,566
|
|
|
37.6
|
%
|
||||
Total cost of product revenues
|
$
|
9,601
|
|
|
100.0
|
%
|
|
$
|
20,777
|
|
|
100.0
|
%
|
|
$
|
39,436
|
|
|
100.0
|
%
|
|
$
|
54,804
|
|
|
100.0
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2017
|
|
% of Total
|
|
2016
|
|
% of Total
|
|
2017
|
|
% of Total
|
|
2016
|
|
% of Total
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||
Marketed products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Orbactiv
|
$
|
6,273
|
|
|
13.7
|
%
|
|
$
|
1,439
|
|
|
6.1
|
%
|
|
$
|
8,864
|
|
|
7.6
|
%
|
|
$
|
4,442
|
|
|
4.7
|
%
|
Ionsys
|
126
|
|
|
0.3
|
%
|
|
1,390
|
|
|
5.9
|
%
|
|
3,795
|
|
|
3.2
|
%
|
|
4,520
|
|
|
4.8
|
%
|
||||
Angiomax
|
2
|
|
|
—
|
%
|
|
303
|
|
|
1.3
|
%
|
|
49
|
|
|
—
|
%
|
|
1,365
|
|
|
1.4
|
%
|
||||
Other
|
713
|
|
|
1.6
|
%
|
|
688
|
|
|
2.9
|
%
|
|
881
|
|
|
0.8
|
%
|
|
4,081
|
|
|
4.3
|
%
|
||||
Total marketed products
|
$
|
7,114
|
|
|
15.5
|
%
|
|
$
|
3,820
|
|
|
16.2
|
%
|
|
$
|
13,589
|
|
|
11.6
|
%
|
|
$
|
14,408
|
|
|
15.2
|
%
|
Registration stage product candidates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Vabomere
|
5,501
|
|
|
12.0
|
%
|
|
—
|
|
|
—
|
%
|
|
24,070
|
|
|
20.5
|
%
|
|
—
|
|
|
—
|
%
|
||||
Total registration stage product candidates
|
5,501
|
|
|
12.0
|
%
|
|
—
|
|
|
—
|
%
|
|
24,070
|
|
|
20.5
|
%
|
|
—
|
|
|
—
|
%
|
||||
Research and development product candidates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
MDCO-216
|
223
|
|
|
0.5
|
%
|
|
4,104
|
|
|
17.4
|
%
|
|
472
|
|
|
0.4
|
%
|
|
26,824
|
|
|
28.4
|
%
|
||||
Vabomere
|
—
|
|
|
—
|
%
|
|
5,281
|
|
|
22.4
|
%
|
|
—
|
|
|
—
|
%
|
|
21,210
|
|
|
22.4
|
%
|
||||
Inclisiran
|
30,015
|
|
|
65.5
|
%
|
|
5,751
|
|
|
24.5
|
%
|
|
66,430
|
|
|
56.6
|
%
|
|
15,903
|
|
|
16.8
|
%
|
||||
Other
|
2,985
|
|
|
6.5
|
%
|
|
4,581
|
|
|
19.5
|
%
|
|
12,776
|
|
|
10.9
|
%
|
|
16,250
|
|
|
17.2
|
%
|
||||
Total research and development product candidates
|
33,223
|
|
|
72.5
|
%
|
|
19,717
|
|
|
83.8
|
%
|
|
79,678
|
|
|
67.9
|
%
|
|
80,187
|
|
|
84.8
|
%
|
||||
Total research and development expenses
|
$
|
45,838
|
|
|
100.0
|
%
|
|
$
|
23,537
|
|
|
100.0
|
%
|
|
$
|
117,337
|
|
|
100.0
|
%
|
|
$
|
94,595
|
|
|
100.0
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Selling, marketing and promotional
|
$
|
26,667
|
|
|
$
|
30,351
|
|
|
$
|
(3,684
|
)
|
|
(12.1
|
)%
|
|
$
|
83,097
|
|
|
$
|
119,607
|
|
|
$
|
(36,510
|
)
|
|
(30.5
|
)%
|
General corporate and administrative
|
20,531
|
|
|
38,671
|
|
|
(18,140
|
)
|
|
(46.9
|
)%
|
|
76,883
|
|
|
122,871
|
|
|
(45,988
|
)
|
|
(37.4
|
)%
|
||||||
Total selling, general and administrative expenses
|
$
|
47,198
|
|
|
$
|
69,022
|
|
|
$
|
(21,824
|
)
|
|
(31.6
|
)%
|
|
$
|
159,980
|
|
|
$
|
242,478
|
|
|
$
|
(82,498
|
)
|
|
(34.0
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Co-promotion and license income
|
$
|
769
|
|
|
$
|
757
|
|
|
$
|
12
|
|
|
1.6
|
%
|
|
$
|
2,283
|
|
|
$
|
3,073
|
|
|
$
|
(790
|
)
|
|
(25.7
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Interest expense
|
$
|
11,886
|
|
|
$
|
12,089
|
|
|
$
|
(203
|
)
|
|
(1.7
|
)%
|
|
$
|
36,898
|
|
|
$
|
32,198
|
|
|
$
|
4,700
|
|
|
14.6
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Other income
|
$
|
71
|
|
|
$
|
865
|
|
|
$
|
(794
|
)
|
|
(91.8
|
)%
|
|
$
|
916
|
|
|
$
|
741
|
|
|
$
|
175
|
|
|
23.6
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||
Benefit (provision) for income taxes
|
$
|
66,637
|
|
|
$
|
(163
|
)
|
|
$
|
66,800
|
|
|
*
|
|
$
|
89,607
|
|
|
$
|
(220
|
)
|
|
$
|
89,827
|
|
|
*
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
|
2017
|
|
2016
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
96
|
|
|
$
|
(96
|
)
|
|
(100.0
|
)%
|
|
$
|
—
|
|
|
$
|
(1,390
|
)
|
|
$
|
1,390
|
|
|
100.0
|
%
|
•
|
$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;
|
•
|
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 extent to which our products are commercially successful globally;
|
•
|
whether we are successful in further 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 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;
|
•
|
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 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.
|
•
|
conduct clinical trials and make regulatory submissions and obtain regulatory approvals in the timeframes anticipated;
|
•
|
train, deploy and support a qualified sales force to market and sell our 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; and
|
•
|
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;
|
•
|
$224.3 million
for the Rempex transaction;
|
•
|
$170.0 million
for the license and collaboration agreement with Alnylam; and
|
•
|
$2.2 million
for other transaction milestones.
|
•
|
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 extent to which our products are commercially successful globally;
|
•
|
whether we are successful in further 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 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;
|
•
|
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 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;
|
•
|
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;
|
•
|
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;
|
•
|
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
|
•
|
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.
|
•
|
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;
|
•
|
increasing our vulnerability to general adverse economic, industry and market conditions;
|
•
|
limiting our ability to obtain additional financing in the future or engage in certain strategic transactions without securing bondholder consent;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and
|
•
|
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.
|
•
|
continue to improve operating, administrative, and information systems;
|
•
|
accurately predict future personnel and resource needs to meet contract commitments;
|
•
|
track the progress of ongoing projects; and
|
•
|
attract and retain qualified management, sales, professional, scientific and technical operating personnel.
|
•
|
political and economic determinations that adversely impact pricing or reimbursement policies;
|
•
|
our customers’ ability to obtain reimbursement for procedures using our products in foreign markets;
|
•
|
compliance with complex and changing foreign legal, tax, accounting and regulatory requirements;
|
•
|
language barriers and other difficulties in providing long-range customer support and service;
|
•
|
longer accounts receivable collection times;
|
•
|
significant foreign currency fluctuations, which could result in increased operating expenses and reduced revenues;
|
•
|
trade restrictions and restrictions on direct investment by foreign entities;
|
•
|
reduced protection of intellectual property rights in some foreign countries; and
|
•
|
the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
|
•
|
unilaterally reduce or modify the government’s obligations under such contracts, including by imposing equitable price adjustments, without the consent of the other party;
|
•
|
cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable;
|
•
|
decline, in whole or in part, to exercise an option to renew the contracts;
|
•
|
claim rights to data, including intellectual property rights, developed under such contracts;
|
•
|
audit contract-related costs and fees, including allocated indirect costs;
|
•
|
suspend the contractor from receiving new contracts pending resolution of alleged violations of procurement laws or regulations in the event of wrongdoing by us;
|
•
|
take actions that result in a longer development timeline than expected;
|
•
|
direct the course of a development program in a manner not chosen by the government contractor;
|
•
|
impose U.S. manufacturing requirements for products that embody inventions conceived or first reduced to practice under such contracts;
|
•
|
suspend or debar the contractor from doing future business with the government or a specific government agency;
|
•
|
pursue criminal or civil remedies under the False Claims Act, False Statements Act and similar remedy provisions specific to government agreements; and
|
•
|
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.
|
•
|
specialized accounting systems unique to government contracts;
|
•
|
potential liability for price adjustments or recoupment of government funds after such funds have been spent;
|
•
|
public disclosures of certain non-proprietary contract information, which may enable competitors to gain insights into our research program; and
|
•
|
mandatory socioeconomic compliance requirements, including labor standards, non-discrimination and affirmative action programs and environmental compliance requirements.
|
•
|
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;
|
•
|
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;
|
•
|
export and import control laws and regulations; and
|
•
|
laws, regulations and executive orders restricting the exportation of certain products and technical data.
|
•
|
termination of any government contracts, including our BARDA contracts;
|
•
|
suspension of payments;
|
•
|
fines; and
|
•
|
suspension or prohibition from conducting business with the U.S. government.
|
•
|
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;
|
•
|
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
|
•
|
result in the termination of the development or commercialization of our products.
|
•
|
reliance on the third party for regulatory compliance and quality assurance;
|
•
|
the possible breach of the manufacturing or supply agreement by the third party; and
|
•
|
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.
|
•
|
collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
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;
|
•
|
collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;
|
•
|
disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaborations;
|
•
|
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
|
•
|
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.
|
•
|
delay or prevent the successful commercialization of any of the products or product candidates in the jurisdiction for which approval is sought;
|
•
|
diminish our competitive advantage; and
|
•
|
defer or decrease our receipt of revenue.
|
•
|
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;
|
•
|
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;
|
•
|
the cost of clinical trials may be greater than we currently anticipate;
|
•
|
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;
|
•
|
we, or the FDA or other regulatory authorities, might suspend or terminate a clinical trial at any time on various grounds, including a finding that participating patients are being exposed to unacceptable health risks. For example, we have in the past voluntarily suspended enrollment in one of our clinical trials to review an interim analysis of safety data from the trial; and
|
•
|
the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.
|
•
|
delay in approving or refusal to approve a product;
|
•
|
product recall or seizure;
|
•
|
suspension or withdrawal of an approved product from the market;
|
•
|
delays in, suspension of or prohibition of commencing, clinical trials of products in development;
|
•
|
interruption of production;
|
•
|
operating restrictions;
|
•
|
untitled or warning letters;
|
•
|
injunctions;
|
•
|
fines and other monetary penalties;
|
•
|
the imposition of civil or criminal penalties;
|
•
|
disruption of importing and exporting activities; and
|
•
|
unanticipated expenditures.
|
•
|
the Federal Anti-Kickback Law, which prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual or furnishing or arranging for a good or service for which payment may be made under federal health care programs such as Medicare and Medicaid;
|
•
|
other Medicare laws and regulations that prescribe the requirements for coverage and payment for services performed by our customers, including the amount of such payment;
|
•
|
the Federal False Claims Act, which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government;
|
•
|
the Federal False Statements Act, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with delivery of or payment for health care benefits, items or services; and
|
•
|
various state laws that impose similar requirements and liability with respect to state healthcare reimbursement and other programs.
|
•
|
obtain and maintain U.S. and foreign patents, including defending those patents against adverse claims;
|
•
|
secure patent term extension for the patents covering our approved products;
|
•
|
protect trade secrets;
|
•
|
operate without infringing the proprietary rights of others; and
|
•
|
prevent others from infringing our proprietary rights.
|
•
|
approval or rejection of submissions for marketing approval for our products and products in development;
|
•
|
regulatory actions by the FDA or a foreign jurisdiction limiting or revoking the use of our products or products in development;
|
•
|
changes in securities analysts’ estimates of our financial performance;
|
•
|
changes in valuations of similar companies;
|
•
|
variations in our operating results;
|
•
|
whether we are successful in further 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;
|
•
|
acquisitions and strategic partnerships;
|
•
|
announcements of technological innovations or new commercial products by us or our competitors or the filing of ANDAs, NDAs or BLAs for products competitive with ours;
|
•
|
announcements of results of clinical trials or nonclinical studies by us or third parties relating to our products, products in development or those of our competitors or of regulatory proceedings by us or our competitors;
|
•
|
the timing, amount and receipt of revenue from sales of our products and margins on sales of our products;
|
•
|
changes in governmental regulations;
|
•
|
developments in patent rights or other proprietary rights;
|
•
|
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;
|
•
|
changes in our management; and
|
•
|
general market conditions.
|
•
|
Section 203 of the Delaware General Corporation Law, which provides that we may not enter into a business combination with an interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in the manner prescribed in Section 203;
|
•
|
our board of directors has the authority to issue, without a vote or action of stockholders, up to 5,000,000 shares of a new series of preferred stock and to fix the price, rights, preferences and privileges of those shares, each of which could be superior to the rights of holders of our common stock;
|
•
|
our directors 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);
|
•
|
the size of our board of directors is determined by resolution of the board of directors;
|
•
|
any vacancy on our board of directors, however occurring, including a vacancy resulting from an enlargement of our board, may only be filled by vote of a majority of our directors then in office, even if less than a quorum;
|
•
|
only our board of directors 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
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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;
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•
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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
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THE MEDICINES COMPANY
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Date:
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November 9, 2017
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By:
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/s/ William B. O'Connor
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William B. O'Connor
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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Exhibit Number
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Description
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10.1
†
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Amendment No. 2 to the Supply and Distribution Agreement, dated July 1, 2017, by and between registrant and Sandoz Inc.
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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
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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
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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
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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
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101
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The following materials from The Medicines Company Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, 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.
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†
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Confidential treatment requested as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Double asterisks denote omissions.
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1.
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Defined Terms
. Any capitalized terms used herein that are not otherwise defined in this Amendment shall have the meanings ascribed to them in the Agreement.
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2.
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Amendment Effective Date
. The “Amendment Effective Date” means July 1, 2017.
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3.
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Schedule A (“Angiomax®”)
. Schedule A is hereby amended as follows:
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a.
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Subsection (c) under “
Net Profit split
” is hereby deleted and replaced with the following:
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b.
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In addition, the following are hereby added as new subsections (d) and (e) under “Net Profit split”:
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c.
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The section entitled “Table 1: Product Cost by Unit Type” is here by deleted and replaced with the following:
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NDC Number
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Unit Type
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Product Cost
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0781-3158-94
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250mg vial
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$[**]
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0781-3158-95
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10 vial carton
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$[**]
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NDC Number
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Unit Type
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Product Cost
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0781-3158-94
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250mg vial
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$[**]
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0781-3158-95
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10 vial carton
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$[**]
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4.
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Profit Share Adjustment
.
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a.
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In addition to the adjustment of the Net Profit split percentages set forth in Paragraphs 3(a) and 3(b) above, within [**] Business Days after the Amendment Effective Date, the Innovator shall issue Sandoz a credit memo for an amount equal to $[**] and Sandoz shall be permitted to set-off any Net Profit payments that become due to the Medicines Company against such credit memo, until the amount of such credit memo has been exhausted in its entirety.
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5.
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Full Force and Effect
. Except as expressly provided in this Amendment, this Amendment does not in any way change, modify or delete the provisions of the Agreement (or the Parties’ rights, remedies or obligations thereunder), and all such provisions shall remain in full force and effect. On and after the date of this Amendment, each reference in the Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference to the Agreement in any other agreements, documents or instruments executed and delivered pursuant to the Agreement, shall mean and be a reference to the Agreement, as amended by this Amendment.
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6.
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Counterparts; Facsimile/PDF Signature
.
This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties hereto and delivered, in person or by facsimile or electronic image scan, receipt acknowledged in each case, to the other Party to this Amendment.
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7.
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Governing Law
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This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law principles thereof.
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8.
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Severability
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If any term or other provision of this Amendment is invalid, illegal or unenforceable, all other provisions of this Amendment shall remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto
.
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9.
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Amendment
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No amendment, supplement, modification or cancellation of this Amendment shall be effective unless it shall be in writing and signed by each Party
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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.
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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)
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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)
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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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November 9, 2017
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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.
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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)
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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)
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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/ William B. O'Connor
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William B. O'Connor
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Chief Financial Officer
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Dated:
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November 9, 2017
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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By:
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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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November 9, 2017
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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By:
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/s/ William B. O'Connor
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William B. O'Connor
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Chief Financial Officer
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Dated:
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November 9, 2017
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