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-10.1
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EX-10.2
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EX-10.3
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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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June 30,
2018 |
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December 31,
2017 |
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ASSETS
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Current assets:
|
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||||
Cash and cash equivalents
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$
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162,530
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$
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151,359
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Short-term investment
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21,042
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—
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Accounts receivable, net of allowances of approximately $4.5 million and $7.1 million at
June 30, 2018 and December 31, 2017, respectively |
2,899
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3,496
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Inventory, net
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3,689
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5,559
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Prepaid expenses and other current assets
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28,886
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11,688
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Current assets held for sale
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—
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391,202
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Total current assets
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219,046
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563,304
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Fixed assets, net
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15,818
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17,254
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Goodwill
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200,571
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200,571
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Restricted cash
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5,433
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5,541
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Contingent purchase price from sale of businesses
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326,207
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80,700
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Other assets
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28,762
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5,613
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Total assets
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$
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795,837
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$
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872,983
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$
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5,626
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$
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10,244
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Accrued expenses
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74,432
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95,197
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Current portion of contingent purchase price
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4,100
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4,995
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Other current liabilities
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259
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4,476
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Current liabilities held for sale
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—
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60,580
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Total current liabilities
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84,417
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175,492
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Contingent purchase price
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14,725
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14,655
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Convertible senior notes
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662,729
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649,198
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Other liabilities
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12,737
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8,724
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Total liabilities
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774,608
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848,069
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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, $0.001 par value per share, 187,500,000 authorized; 76,733,599 issued and 73,720,456 outstanding at June 30, 2018 and 76,191,958 issued and 73,178,815 outstanding at December 31, 2017
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76
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76
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Additional paid-in capital
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1,398,377
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1,377,393
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Treasury stock, at cost; 3,013,143 and 3,013,143 shares at June 30, 2018 and December 31, 2017, respectively
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(90,016
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)
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(90,016
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)
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Accumulated deficit
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(1,282,614
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)
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(1,257,356
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)
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Accumulated other comprehensive loss
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(4,594
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)
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(5,183
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)
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Total stockholders’ equity
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21,229
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24,914
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Total liabilities and stockholders’ equity
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$
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795,837
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$
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872,983
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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2018
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2017
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2018
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2017
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||||||||
Net revenues
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$
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1,667
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$
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10,861
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$
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9,438
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28,326
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Operating expenses:
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|||||||
Cost of revenues
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2,931
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12,490
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5,668
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22,468
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Asset impairment charges
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—
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329,097
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—
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329,097
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Research and development
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30,294
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23,249
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70,660
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49,693
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Selling, general and administrative
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21,013
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28,359
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49,964
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68,816
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Total operating expenses
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54,238
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393,195
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126,292
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470,074
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Loss from operations
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(52,571
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)
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(382,334
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)
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(116,854
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)
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(441,748
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)
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Co-promotion and license income
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254
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|
757
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|
482
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1,514
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Loss on short-term investment
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(3,474
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)
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—
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(33,463
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)
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—
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Interest expense
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(12,108
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)
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(12,521
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)
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(24,185
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)
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(24,943
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)
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Other income
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1,053
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1,033
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3,422
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1,144
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Loss from continuing operations before income taxes
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(66,846
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)
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(393,065
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)
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(170,598
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)
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(464,033
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)
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Benefit from income taxes
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12,393
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23,000
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31,309
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22,972
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Loss from continuing operations
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(54,453
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)
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(370,065
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)
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(139,289
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)
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(441,061
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)
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Income (loss) from discontinued operations, net of tax
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256
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(27,203
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)
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114,241
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(58,877
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)
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Net Loss
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$
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(54,197
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)
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$
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(397,268
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)
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$
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(25,048
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)
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$
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(499,938
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)
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||||||||
Basic (loss) earnings per common share:
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||||||||
Loss from continuing operations
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$
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(0.74
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)
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$
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(5.15
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)
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$
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(1.89
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)
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$
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(6.17
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)
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Earnings (loss) from discontinued operations
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—
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(0.38
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)
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1.55
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(0.82
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)
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Basic loss per share
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$
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(0.74
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)
|
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$
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(5.53
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)
|
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$
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(0.34
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)
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$
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(6.99
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)
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||||||||
Diluted (loss) earnings per common share:
|
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|
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|
|
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||||||||
Loss from continuing operations
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$
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(0.74
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)
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$
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(5.15
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)
|
|
$
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(1.89
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)
|
|
$
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(6.17
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)
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Earnings (loss) from discontinued operations
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—
|
|
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(0.38
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)
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1.55
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(0.82
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)
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Diluted loss per share
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$
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(0.74
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)
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$
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(5.53
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)
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$
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(0.34
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)
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$
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(6.99
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)
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||||||||
Weighted average number of common shares outstanding:
|
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|
|
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||||||||
Basic
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73,349
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71,918
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73,574
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|
|
71,498
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|
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Diluted
|
73,349
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71,918
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|
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73,574
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|
|
71,498
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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2018
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|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss
|
$
|
(54,197
|
)
|
|
$
|
(397,268
|
)
|
|
$
|
(25,048
|
)
|
|
$
|
(499,938
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(123
|
)
|
|
368
|
|
|
(594
|
)
|
|
40
|
|
||||
Unrealized gain on available for sale securities
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
—
|
|
|
1,183
|
|
|
—
|
|
||||
Other comprehensive (loss) income
|
(123
|
)
|
|
361
|
|
|
589
|
|
|
33
|
|
||||
Comprehensive loss
|
$
|
(54,320
|
)
|
|
$
|
(396,907
|
)
|
|
$
|
(24,459
|
)
|
|
$
|
(499,905
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(25,048
|
)
|
|
$
|
(499,938
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,443
|
|
|
11,727
|
|
||
Asset impairment charges
|
—
|
|
|
329,097
|
|
||
Amortization of debt discount
|
13,531
|
|
|
13,822
|
|
||
Unrealized foreign currency transaction losses, net
|
127
|
|
|
523
|
|
||
Stock compensation expense
|
9,073
|
|
|
16,200
|
|
||
Gain on sale of business
|
(168,955
|
)
|
|
—
|
|
||
Loss on short-term investments
|
33,463
|
|
|
—
|
|
||
Deferred tax benefit
|
—
|
|
|
(22,989
|
)
|
||
Reserve for excess or obsolete inventory
|
(394
|
)
|
|
2,147
|
|
||
Changes in contingent purchase price
|
(258
|
)
|
|
(4,116
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
619
|
|
|
6,708
|
|
||
Inventory, net
|
2,258
|
|
|
(2,605
|
)
|
||
Prepaid expenses and other assets
|
6,687
|
|
|
4,595
|
|
||
Accounts payable
|
(4,618
|
)
|
|
(12,070
|
)
|
||
Accrued expenses
|
(33,253
|
)
|
|
1,530
|
|
||
Other current liabilities
|
(4,181
|
)
|
|
(4,960
|
)
|
||
Payments on contingent purchase price
|
(57
|
)
|
|
(12,437
|
)
|
||
Other liabilities
|
4,222
|
|
|
(2,586
|
)
|
||
Net cash used in operating activities
|
(165,341
|
)
|
|
(175,352
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of fixed assets
|
(7
|
)
|
|
(4,448
|
)
|
||
Purchases of available for sale securities
|
—
|
|
|
(131,560
|
)
|
||
Proceeds from sale of business
|
166,383
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
166,376
|
|
|
(136,008
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuances of common stock, net
|
11,913
|
|
|
35,859
|
|
||
Payments on contingent purchase price
|
(511
|
)
|
|
(9,565
|
)
|
||
Repayments of convertible senior notes
|
—
|
|
|
(54,997
|
)
|
||
Purchase of shares of non-controlling interest
|
—
|
|
|
(167
|
)
|
||
Net cash provided by financing activities
|
11,402
|
|
|
(28,870
|
)
|
||
Effect of exchange rate changes on cash
|
(1,374
|
)
|
|
818
|
|
||
Increase (decrease) in cash, cash equivalents and restricted cash
|
11,063
|
|
|
(339,412
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
156,900
|
|
|
546,867
|
|
||
Cash, cash equivalents and restricted cash at end of period
(a)
|
$
|
167,963
|
|
|
$
|
207,455
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
10,534
|
|
|
$
|
11,988
|
|
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
|
|
Reconciliation of cash, cash equivalents and restricted cash
|
|
|
|
||||
Cash and cash equivalents
|
$
|
162,530
|
|
|
202,422
|
|
|
Restricted cash
|
5,433
|
|
|
5,033
|
|
||
Total cash, cash equivalents and restricted cash at end of period
|
$
|
167,963
|
|
|
$
|
207,455
|
|
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.
|
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 liabilities consist of the contingent purchase prices associated with the Company’s business combinations. 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.
|
|
As of June 30, 2018
|
|
As of December 31, 2017
|
||||||||||||||||||||||||||||
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 June 30, 2018
|
|
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, 2017
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
|
$
|
12,182
|
|
|
|
|
$
|
—
|
|
|
$
|
12,182
|
|
|
$
|
12,100
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,100
|
|
||
Short-term investment
|
21,042
|
|
|
—
|
|
|
—
|
|
|
21,042
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total assets at fair value
|
$
|
33,224
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,224
|
|
|
$
|
12,100
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,100
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contingent purchase price
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,825
|
|
|
$
|
18,825
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,650
|
|
|
$
|
19,650
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,825
|
|
|
$
|
18,825
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,650
|
|
|
$
|
19,650
|
|
|
|
Fair Value as of
June 30, 2018 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
(Weighted Average)
|
||
|
|
(in thousands)
|
|
|
|
|
|
|
||
Rempex:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price: Event-based milestones
|
|
$
|
18,825
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of successes
|
|
18% - 90% (46%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2018 - 2024
|
||
|
|
|
|
|
|
Discount rate
|
|
4.8% - 7.3%
|
|
|
Fair Value as of
December 31, 2017 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
(Weighted Average)
|
||
|
|
(in thousands)
|
|
|
|
|
|
|
||
Rempex:
|
|
|
|
|
|
|
|
|
||
Contingent purchase price: Event-based milestones
|
|
$
|
19,650
|
|
|
Probability-adjusted discounted cash flow
|
|
Probabilities of successes
|
|
18% - 90% (71%)
|
|
|
|
|
|
|
Period in which milestones are expected to be achieved
|
|
2018 - 2024
|
||
|
|
|
|
|
|
Discount rate
|
|
4.8% - 7.5%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
|
|
||||||||||
Balance at beginning of period
|
$
|
19,198
|
|
|
$
|
19,278
|
|
|
$
|
19,650
|
|
|
$
|
31,832
|
|
Payments
|
(377
|
)
|
|
—
|
|
|
(567
|
)
|
|
—
|
|
||||
Fair value adjustments to contingent purchase prices included in net loss
|
4
|
|
|
1,022
|
|
|
(258
|
)
|
|
(11,532
|
)
|
||||
Balance at end of period
|
$
|
18,825
|
|
|
$
|
20,300
|
|
|
$
|
18,825
|
|
|
$
|
20,300
|
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
(in thousands)
|
||||||
Raw materials
|
|
$
|
919
|
|
|
$
|
1,389
|
|
Work-in-progress
|
|
2,501
|
|
|
3,608
|
|
||
Finished goods
|
|
269
|
|
|
562
|
|
||
Total
|
|
$
|
3,689
|
|
|
$
|
5,559
|
|
•
|
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
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
402,500
|
|
|
$
|
402,500
|
|
Less: Debt discount, net
(1)
|
|
(83,869
|
)
|
|
(90,552
|
)
|
||
Net carrying amount
|
|
$
|
318,631
|
|
|
$
|
311,948
|
|
(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 June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Contractual interest expense
|
$
|
2,767
|
|
|
$
|
2,767
|
|
|
$
|
5,534
|
|
|
$
|
5,526
|
|
Amortization of debt discount
|
3,351
|
|
|
3,104
|
|
|
6,682
|
|
|
6,179
|
|
||||
Total
|
$
|
6,118
|
|
|
$
|
5,871
|
|
|
$
|
12,216
|
|
|
$
|
11,705
|
|
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
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
399,997
|
|
|
$
|
399,997
|
|
Less: Debt discount, net
(1)
|
|
(55,899
|
)
|
|
(62,747
|
)
|
||
Net carrying amount
|
|
$
|
344,098
|
|
|
$
|
337,250
|
|
(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 June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Contractual interest expense
|
$
|
2,500
|
|
|
$
|
2,500
|
|
|
$
|
5,000
|
|
|
$
|
5,000
|
|
Amortization of debt discount
|
3,434
|
|
|
3,205
|
|
|
6,848
|
|
|
6,392
|
|
||||
Total
|
$
|
5,934
|
|
|
$
|
5,705
|
|
|
$
|
11,848
|
|
|
$
|
11,392
|
|
Effective interest rate of the liability component
|
6.5
|
%
|
|
6.5
|
%
|
|
6.5
|
%
|
|
6.5
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Contractual interest expense
|
$
|
—
|
|
|
$
|
126
|
|
|
$
|
—
|
|
|
$
|
315
|
|
Amortization of debt discount
|
—
|
|
|
540
|
|
|
—
|
|
|
1,251
|
|
||||
Total
|
$
|
—
|
|
|
$
|
666
|
|
|
$
|
—
|
|
|
$
|
1,566
|
|
Effective interest rate of the liability component
|
—
|
%
|
|
6.02
|
%
|
|
—
|
%
|
|
6.02
|
%
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||||||||||
|
|
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
|
|
$
|
(4,471
|
)
|
|
$
|
—
|
|
|
$
|
(4,471
|
)
|
|
$
|
(5,807
|
)
|
|
$
|
—
|
|
|
$
|
(5,807
|
)
|
Other comprehensive (loss) income
|
|
(123
|
)
|
|
—
|
|
|
(123
|
)
|
|
368
|
|
|
(7
|
)
|
|
361
|
|
||||||
Total other comprehensive (loss) income
|
|
(123
|
)
|
|
—
|
|
|
(123
|
)
|
|
368
|
|
|
(7
|
)
|
|
361
|
|
||||||
Balance at end of period
|
|
$
|
(4,594
|
)
|
|
$
|
—
|
|
|
$
|
(4,594
|
)
|
|
$
|
(5,439
|
)
|
|
$
|
(7
|
)
|
|
$
|
(5,446
|
)
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||||||||||
|
|
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
|
|
$
|
(5,183
|
)
|
|
$
|
—
|
|
|
$
|
(5,183
|
)
|
|
$
|
(5,479
|
)
|
|
$
|
—
|
|
|
$
|
(5,479
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
(594
|
)
|
|
—
|
|
|
(594
|
)
|
|
40
|
|
|
(7
|
)
|
|
33
|
|
||||||
Amounts reclassified from accumulated other comprehensive income
(1)
|
|
1,183
|
|
|
—
|
|
|
1,183
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total other comprehensive income (loss)
|
|
589
|
|
|
—
|
|
|
589
|
|
|
40
|
|
|
(7
|
)
|
|
33
|
|
||||||
Balance at end of period
|
|
$
|
(4,594
|
)
|
|
$
|
—
|
|
|
$
|
(4,594
|
)
|
|
$
|
(5,439
|
)
|
|
$
|
(7
|
)
|
|
$
|
(5,446
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||||||
|
($ in thousands)
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
$
|
1,639
|
|
|
98.3
|
%
|
|
$
|
9,565
|
|
|
88.1
|
%
|
|
$
|
8,841
|
|
|
93.7
|
%
|
|
$
|
24,970
|
|
|
88.1
|
%
|
Europe
|
28
|
|
|
1.7
|
%
|
|
1,252
|
|
|
11.5
|
%
|
|
322
|
|
|
3.4
|
%
|
|
3,147
|
|
|
11.1
|
%
|
||||
Rest of world
|
—
|
|
|
—
|
%
|
|
44
|
|
|
0.4
|
%
|
|
275
|
|
|
2.9
|
%
|
|
209
|
|
|
0.8
|
%
|
||||
Total net revenues
|
$
|
1,667
|
|
|
100
|
%
|
|
$
|
10,861
|
|
|
100
|
%
|
|
$
|
9,438
|
|
|
100.0
|
%
|
|
$
|
28,326
|
|
|
100.0
|
%
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
|
($ in thousands)
|
||||||||||||
Long-lived assets:
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
570,936
|
|
|
99.0
|
%
|
|
$
|
308,843
|
|
|
99.7
|
%
|
Europe
|
5,855
|
|
|
1.0
|
%
|
|
836
|
|
|
0.3
|
%
|
||
Total long-lived assets
|
$
|
576,791
|
|
|
100.0
|
%
|
|
$
|
309,679
|
|
|
100.0
|
%
|
|
Balance as of January 1, 2018
|
|
Expenses,
Net
|
|
Cash
|
|
Noncash
|
|
Balance as of June 30, 2018
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
2018 Restructuring Plan:
|
$
|
—
|
|
|
$
|
13,304
|
|
|
$
|
(9,249
|
)
|
|
$
|
(1,956
|
)
|
|
$
|
2,099
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Net product revenues
|
$
|
(81
|
)
|
|
$
|
7,881
|
|
|
$
|
(107
|
)
|
|
$
|
14,632
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
(17
|
)
|
|
3,792
|
|
|
197
|
|
|
7,367
|
|
||||
Research and development
|
98
|
|
|
9,822
|
|
|
510
|
|
|
21,805
|
|
||||
Selling, general and administrative
|
(19
|
)
|
|
21,242
|
|
|
3,077
|
|
|
43,967
|
|
||||
Total operating expenses
|
62
|
|
|
34,856
|
|
|
3,784
|
|
|
73,139
|
|
||||
Loss from operations
|
(143
|
)
|
|
(26,975
|
)
|
|
(3,891
|
)
|
|
(58,507
|
)
|
||||
Gain from sale of business
|
—
|
|
|
—
|
|
|
168,955
|
|
|
—
|
|
||||
Other income (expense), net
|
484
|
|
|
(248
|
)
|
|
410
|
|
|
(368
|
)
|
||||
Income (loss) from discontinued operations before income taxes
|
341
|
|
|
(27,223
|
)
|
|
165,474
|
|
|
(58,875
|
)
|
||||
Provision for (benefit from) income taxes
|
85
|
|
|
(20
|
)
|
|
51,233
|
|
|
2
|
|
||||
Income (loss) from discontinued operations, net of tax
|
$
|
256
|
|
|
$
|
(27,203
|
)
|
|
$
|
114,241
|
|
|
$
|
(58,877
|
)
|
|
December 31,
|
||
|
2017
|
||
|
(In thousands)
|
||
Assets:
|
|
||
Accounts receivable, net
|
$
|
9,595
|
|
Inventory
|
41,412
|
|
|
Other receivables
|
2,740
|
|
|
Intangibles, net
|
282,398
|
|
|
Goodwill
|
55,057
|
|
|
Total assets held for sale
|
$
|
391,202
|
|
|
|
||
Liabilities:
|
|
||
Accounts payable
|
$
|
1,127
|
|
Accrued expenses
|
22,945
|
|
|
Contingent purchase price
|
35,785
|
|
|
Deferred revenue
|
723
|
|
|
Total liabilities held for sale
|
$
|
60,580
|
|
|
Six months ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Amortization from discontinued operations
|
$
|
—
|
|
|
$
|
3,966
|
|
Changes in contingent purchase price
|
—
|
|
|
7,416
|
|
||
Gain on sale of business
|
(168,955
|
)
|
|
—
|
|
||
Reserve for excess or obsolete inventory
|
—
|
|
|
(435
|
)
|
||
Proceeds from sale of business
|
166,383
|
|
|
—
|
|
||
Payments on contingent purchase price
|
—
|
|
|
(22,002
|
)
|
•
|
On February 1, 2016, we completed the sale of our hemostasis portfolio, consisting of PreveLeak, Raplixa and Recothrom, to wholly owned subsidiaries of Mallinckrodt plc, or Mallinckrodt. At the completion of the sale, we received approximately $174.1 million in cash, and may receive up to an additional $235.0 million in the aggregate following the achievement of certain specified calendar year net sales milestones with respect to net sales of PreveLeak and Raplixa.
|
•
|
On June 21, 2016, we completed the sale of Cleviprex, Kengreal and rights to Argatroban for Injection, which we refer to collectively as Non-Core ACC Assets, to Chiesi USA, Inc., or Chiesi USA, and its parent company Chiesi Farmaceutici S.p.A., or Chiesi. At the completion of the sale, we received approximately $263.8 million in cash, which included the value of product inventory, and may receive up to an additional $480.0 million in the aggregate following the achievement of certain specified calendar year net sales milestones with respect to net sales of each of Cleviprex and Kengreal.
|
•
|
On January 5, 2018, we completed the sale of our infectious disease portfolio, consisting of the products Vabomere, Orbactiv and Minocin IV and line extensions thereof, and substantially all of the assets related thereto, other than certain pre-clinical assets, to Melinta Therapeutics, Inc., or Melinta. At the completion of the sale, we received approximately $166.4 million and 3,313,702 shares of Melinta common stock having a market value, based on Melinta's closing share price on January 5, 2018, of approximately $54.5 million. In addition, we are entitled to receive (i) a cash payment payable 12 months following the closing of the transaction equal to $25 million; (ii) a cash payment payable 18 months following the closing of the transaction equal to $25 million; and (iii) tiered royalty payments of 5% to 25% on worldwide net sales of (a) Vabomere and (b) Orbactiv and Minocin IV, collectively.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Net revenues
|
$
|
1,667
|
|
|
$
|
10,861
|
|
|
$
|
(9,194
|
)
|
|
(84.7
|
)%
|
|
$
|
9,438
|
|
|
$
|
28,326
|
|
|
$
|
(18,888
|
)
|
|
(66.7
|
)%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Angiomax
|
$
|
1,667
|
|
|
$
|
10,703
|
|
|
$
|
(9,036
|
)
|
|
(84.4
|
)%
|
|
$
|
9,360
|
|
|
$
|
27,958
|
|
|
$
|
(18,598
|
)
|
|
(66.5
|
)%
|
Other products
|
—
|
|
|
158
|
|
|
(158
|
)
|
|
(100.0
|
)%
|
|
78
|
|
|
368
|
|
|
(290
|
)
|
|
(78.8
|
)%
|
||||||
Net revenues
|
$
|
1,667
|
|
|
$
|
10,861
|
|
|
$
|
(9,194
|
)
|
|
(84.7
|
)%
|
|
$
|
9,438
|
|
|
$
|
28,326
|
|
|
$
|
(18,888
|
)
|
|
(66.7
|
)%
|
•
|
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;
|
•
|
logistics costs related to Angiomax and Ionsys, including distribution, storage, and handling costs;
|
•
|
royalty expenses under our agreement with Biogen Idec and Health Research Inc. related to Angiomax;
|
•
|
expenses associated with severance and other exist costs; and
|
•
|
for the
three and six months ended June 30, 2017
, 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.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2018
|
|
% of Total
|
|
2017
|
|
% of Total
|
|
2018
|
|
% of Total
|
|
2017
|
|
% of Total
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||
Manufacturing/Logistics
|
$
|
2,924
|
|
|
99.8
|
%
|
|
$
|
9,606
|
|
|
76.9
|
%
|
|
$
|
5,530
|
|
|
97.6
|
%
|
|
$
|
15,125
|
|
|
67.3
|
%
|
Royalties
|
7
|
|
|
0.2
|
%
|
|
120
|
|
|
1.0
|
%
|
|
138
|
|
|
2.4
|
%
|
|
504
|
|
|
2.2
|
%
|
||||
Impairment of inventory and amortization of acquired product rights and intangible assets
|
—
|
|
|
—
|
%
|
|
2,764
|
|
|
22.1
|
%
|
|
—
|
|
|
—
|
%
|
|
6,839
|
|
|
30.5
|
%
|
||||
Total cost of revenues
|
$
|
2,931
|
|
|
100.0
|
%
|
|
$
|
12,490
|
|
|
100.0
|
%
|
|
$
|
5,668
|
|
|
100.0
|
%
|
|
$
|
22,468
|
|
|
100.0
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2018
|
|
% of Total
|
|
2017
|
|
% of Total
|
|
2018
|
|
% of Total
|
|
2017
|
|
% of Total
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||
Marketed products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ionsys
|
$
|
85
|
|
|
0.3
|
%
|
|
$
|
2,393
|
|
|
10.3
|
%
|
|
219
|
|
|
0.3
|
%
|
|
3,669
|
|
|
7.4
|
%
|
||
Angiomax
|
25
|
|
|
0.1
|
%
|
|
9
|
|
|
—
|
%
|
|
56
|
|
|
0.1
|
%
|
|
47
|
|
|
0.1
|
%
|
||||
Other
|
(4
|
)
|
|
—
|
%
|
|
(19
|
)
|
|
(0.1
|
)%
|
|
(21
|
)
|
|
—
|
%
|
|
(180
|
)
|
|
(0.4
|
)%
|
||||
Total marketed products
|
106
|
|
|
0.3
|
%
|
|
2,383
|
|
|
10.2
|
%
|
|
$
|
254
|
|
|
0.4
|
%
|
|
$
|
3,536
|
|
|
7.1
|
%
|
||
Research and development product candidates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Inclisiran
|
24,575
|
|
|
81.1
|
%
|
|
15,903
|
|
|
68.4
|
%
|
|
61,197
|
|
|
86.6
|
%
|
|
36,415
|
|
|
73.3
|
%
|
||||
Other
|
5,613
|
|
|
18.5
|
%
|
|
4,963
|
|
|
21.3
|
%
|
|
9,209
|
|
|
13.0
|
%
|
|
9,742
|
|
|
19.6
|
%
|
||||
Total research and development product candidates
|
30,188
|
|
|
99.7
|
%
|
|
20,866
|
|
|
89.8
|
%
|
|
70,406
|
|
|
99.6
|
%
|
|
46,157
|
|
|
92.9
|
%
|
||||
Total research and development expenses
|
$
|
30,294
|
|
|
100.0
|
%
|
|
$
|
23,249
|
|
|
100.0
|
%
|
|
$
|
70,660
|
|
|
100.0
|
%
|
|
$
|
49,693
|
|
|
100.0
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Selling, marketing and promotional
|
$
|
1,971
|
|
|
13,084
|
|
|
$
|
(11,113
|
)
|
|
(84.9
|
)%
|
|
$
|
5,052
|
|
|
$
|
27,096
|
|
|
$
|
(22,044
|
)
|
|
(81.4
|
)%
|
|
General corporate and administrative
|
19,042
|
|
|
15,275
|
|
|
3,767
|
|
|
24.7
|
%
|
|
44,912
|
|
|
41,720
|
|
|
3,192
|
|
|
7.7
|
%
|
||||||
Total selling, general and administrative expenses
|
$
|
21,013
|
|
|
$
|
28,359
|
|
|
$
|
(7,346
|
)
|
|
(25.9
|
)%
|
|
$
|
49,964
|
|
|
$
|
68,816
|
|
|
$
|
(18,852
|
)
|
|
(27.4
|
)%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Co-promotion and license income
|
$
|
254
|
|
|
$
|
757
|
|
|
$
|
(503
|
)
|
|
(66.4
|
)%
|
|
$
|
482
|
|
|
$
|
1,514
|
|
|
$
|
(1,032
|
)
|
|
(68.2
|
)%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Loss on short-term investment
|
$
|
(3,474
|
)
|
|
$
|
—
|
|
|
$
|
(3,474
|
)
|
|
100.0
|
%
|
|
$
|
(33,463
|
)
|
|
$
|
—
|
|
|
$
|
(33,463
|
)
|
|
100.0
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Interest expense
|
$
|
12,108
|
|
|
$
|
12,521
|
|
|
$
|
(413
|
)
|
|
(3.3
|
)%
|
|
$
|
24,185
|
|
|
$
|
24,943
|
|
|
$
|
(758
|
)
|
|
(3.0
|
)%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Other income
|
$
|
1,053
|
|
|
$
|
1,033
|
|
|
$
|
20
|
|
|
1.9
|
%
|
|
$
|
3,422
|
|
|
$
|
1,144
|
|
|
$
|
2,278
|
|
|
199.1
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Benefit from income taxes
|
$
|
12,393
|
|
|
$
|
23,000
|
|
|
$
|
(10,607
|
)
|
|
(46.1
|
)%
|
|
$
|
31,309
|
|
|
$
|
22,972
|
|
|
$
|
8,337
|
|
|
36.3
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
|
2018
|
|
2017
|
|
Change $
|
|
Change %
|
||||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax
|
$
|
256
|
|
|
$
|
(27,203
|
)
|
|
$
|
27,459
|
|
|
100.9
|
%
|
|
$
|
114,241
|
|
|
$
|
(58,877
|
)
|
|
$
|
173,118
|
|
|
294.0
|
%
|
•
|
$68.4 million
relating to our research and development infectious disease portfolio acquired in our Rempex acquisition (and which was not divested in the Melinta transactions).
|
•
|
the progress, level, timing and cost of our research and development activities related to our clinical trials and non-clinical studies with respect to inclisiran;
|
•
|
whether we develop and commercialize inclisiran on our own or through licenses and collaborations with third parties and the terms and timing of such arrangements, if any;
|
•
|
the extent to which our submissions and planned submissions for regulatory approval of inclisiran are approved on a timely basis, if at all;
|
•
|
if inclisiran receives regulatory approval, the extent to which it is commercially successful;
|
•
|
the extent to which we are able to realize additional funds through our sources of liquidity from the Melinta transaction;
|
•
|
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, including scaling our operations in anticipation of a potential launch of inclisiran;
|
•
|
the amounts of our payment obligations to third parties with respect to inclisiran or other assets; 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.
|
•
|
we may not be able to demonstrate that inclisiran is safe and effective as a treatment for our targeted indications to the satisfaction of the FDA;
|
•
|
the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA for marketing approval;
|
•
|
a clinical research organization, or CRO, that we retain to conduct clinical trials or any other third parties involved in the conduct of trials may take actions outside of our control that materially adversely impact our clinical trials;
|
•
|
the FDA may not find the data from pre-clinical studies and clinical trials sufficient to demonstrate that the clinical and other benefits of inclisiran outweigh the safety risks;
|
•
|
the FDA may disagree with our interpretation of data from our pre-clinical studies and clinical trials or may require that we conduct additional studies or trials;
|
•
|
the FDA may not accept data generated at our clinical trial sites;
|
•
|
if our NDA is reviewed by an advisory committee, the FDA may have difficulties scheduling an advisory committee meeting in a timely manner or the advisory committee may recommend against approval of our application or may recommend that the FDA require, as a condition of approval, additional pre-clinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions;
|
•
|
the advisory committee may recommend that the FDA require, as a condition of approval, additional pre-clinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions;
|
•
|
the FDA may require development of a Risk Evaluation and Mitigation Strategy as a condition to approval;
|
•
|
the FDA may identify deficiencies in the manufacturing processes or facilities of our third-party manufacturers; or
|
•
|
the FDA may change its approval policies or adopt new regulations.
|
•
|
train, deploy and support a qualified sales force to market and sell our newly launched product;
|
•
|
have third parties manufacture and release the product in sufficient quantities;
|
•
|
implement and maintain agreements with wholesalers and distributors;
|
•
|
receive adequate levels of coverage and reimbursement for the product from governments and third-party payors;
|
•
|
develop and execute marketing and sales strategies and programs for the product; and
|
•
|
enter into suitable partnerships with third parties, as needed, to provide a viable platform to commercialize the product.
|
•
|
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.
|
•
|
$150.0 million
for the license and collaboration agreement with Alnylam; and
|
•
|
$68.4 million
relating to our research and development infectious disease portfolio acquired in our Rempex acquisition (and which was not divested in the Melinta 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 inclisiran;
|
•
|
whether we develop and commercialize inclisiran on our own or through licenses and collaborations with third parties and the terms and timing of such arrangements, if any;
|
•
|
the extent to which our submissions and planned submissions for regulatory approval of inclisiran are approved on a timely basis, if at all;
|
•
|
the decline in Angiomax sales and the extent to which sales of the authorized generic of Angiomax are generated;
|
•
|
if inclisiran receives regulatory approval, the extent to which it is commercially successful;
|
•
|
the extent to which we are able to realize additional funds through our sources of liquidity from the Melinta transaction;
|
•
|
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, including scaling our operations in anticipation of a potential launch of inclisiran;
|
•
|
the amounts of our payment obligations to third parties with respect to inclisiran or other assets; 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.
|
•
|
delay or otherwise adversely impact the manufacturing, development or commercialization of Angiomax, inclisiran 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 inclisiran 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 inclisiran, repeat or conduct new clinical trials or require a new formulation of inclisiran 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.
|
•
|
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 inclisiran may not be the desired effects or may include undesirable side effects or inclisiran 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 inclisiran;
|
•
|
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.
|
•
|
announcements of results of clinical trials or nonclinical studies by us or third parties relating to inclisiran or Angiomax or products of our competitors or of regulatory proceedings by us or our competitors;
|
•
|
approval or rejection of submissions for marketing approval for inclisiran;
|
•
|
changes in securities analysts’ estimates of our financial performance;
|
•
|
changes in valuations of similar companies;
|
•
|
variations in our operating results;
|
•
|
acquisitions and strategic partnerships;
|
•
|
announcements of technological innovations or new commercial products by us or our competitors or the filing of ANDAs, NDAs or BLAs for products competitive with ours;
|
•
|
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 may be removed with or without cause but only by the affirmative vote of the holders of at least 75% of the votes which all stockholders would be entitled to cast in any annual election of directors;
|
•
|
the size of our board of directors is determined by resolution of the board of directors;
|
•
|
any vacancy on our board of directors, however occurring, including a vacancy resulting from an enlargement of our board, may only be filled by vote of a majority of our directors then in office, even if less than a quorum;
|
•
|
only our board of directors may call special meetings of stockholders;
|
•
|
our by-laws may be amended, altered or repealed by (i) the affirmative vote of a majority of our directors, subject to any limitations set forth in the by-laws, or (ii) the affirmative vote of the holders of at least 75% of the votes which all the stockholders would be entitled to cast in any annual election of directors;
|
•
|
stockholders must provide us with advance notice, and certain information specified in our by-laws, in connection with nominations or proposals by such stockholder for consideration at an annual meeting;
|
•
|
stockholders may not take any action by written consent in lieu of a meeting; and
|
•
|
our certificate of incorporation may only be amended or repealed by the affirmative vote of a majority of our directors and the affirmative vote of the holders of at least 75% of the votes which all the stockholders would be entitled to cast in any annual election of directors (and plus any separate class vote that might in the future be required pursuant to the terms of any series of preferred stock that might be outstanding at the time any of these amendments are submitted to stockholders).
|
•
|
responding to proxy contests and other actions by activist shareholders may be costly and time-consuming and may disrupt our operations and divert the attention of management and our employees;
|
•
|
perceived uncertainties as to our future direction may result in our inability to consummate potential acquisitions, collaborations or in-licensing opportunities and may make it more difficult to attract and retain qualified personnel and business partners; and
|
•
|
if individuals are elected to our board of directors with a specific agenda different from ours, it may adversely affect our ability to effectively and timely implement our strategic plan and create additional value for our stockholders.
|
|
|
|
|
THE MEDICINES COMPANY
|
|
|
|
|
|
Date:
|
August 2, 2018
|
|
By:
|
/s/ Christopher J. Visioli
|
|
|
|
|
Christopher J. Visioli
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
Exhibit Number
|
|
Description
|
|
|
|
|
Amendment No. 4 to the 2013 Stock Incentive Plan (incorporated by reference to Appendix I to the registrant's definitive proxy statement, dated and filed with the Securities and Exchange Commission on April 30, 2018, for the registrant’s 2018 Annual Meeting of Stockholders)
|
|
10.2
#
|
|
Form of performance stock option agreement under 2013 Stock Incentive Plan
|
10.3
†
|
|
Tenth Amendment to Second Amended and Restated Distribution Agreement, effective April 30, 2018, by and between the registrant and Integrated Commercialization Solutions LLC, /f/k/a Integrated Commercialization Solutions, Inc.
|
|
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
|
|
|
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
|
|
|
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
|
|
|
Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
101
|
|
The following materials from The Medicines Company Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, 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.
|
#
|
Schedules (and similar attachments) have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally copies of any of the omitted schedules (or similar attachments) to the Securities and Exchange Commission upon request.
|
†
|
Confidential treatment requested as to certain portions, which portions have been omitted and filed separately with the Securities and Exchange Commission unless otherwise indicated, the exhibits incorporated herein by reference were filed under Commission file number 000-31191.
|
1.
|
Grant of Option
.
|
2.
|
Vesting Schedule
.
|
3.
|
Exercise of Option
.
|
4.
|
Withholding
.
|
5.
|
Non-transferability of Option
.
|
6.
|
Section 280G of the Code
.
|
7.
|
Interpretation
.
|
8.
|
Provisions of the Plan
.
|
|
PARTICIPANT:
|
|
|
A.
|
MDCO and Distributor are parties to a Second Amended and Restated Distribution Agreement effective as of October 1, 2010, as amended by the First Amendment dated July 1, 2011, the Second Amendment dated September 1, 2011, the Third Amendment dated April 23, 2012, the Fourth Amendment dated April 29, 2013, the Fifth Amendment dated September 12, 2013, the Sixth Amendment dated March 1, 2014, and the Seventh Amendment dated March 5, 2015, the Eighth Amendment dated April, 2016, and Ninth Amendment dated October 3, 2017 (as amended, the “Agreement”);
|
B.
|
Under the Agreement, among other things, MDCO engaged Distributor to perform distribution services for certain of MDCO’s pharmaceutical products;
|
B.
|
MDCO has sold certain products to Melinta Therapeutics, Inc.; and
|
C.
|
The Parties now wish to amend the Agreement in certain respects.
|
1.
|
Defined Terms
. Capitalized terms in this Amendment that are not defined in this Amendment have the meanings given to them in the Agreement. If there is any conflict between the Agreement and any provision of this Amendment, this Amendment will control.
|
2.
|
Exhibit A-1
. Exhibit A-1, added by Amendment 6, is hereby deleted in its entirety.
|
3.
|
Exhibit B
. Exhibit B to the Agreement is hereby deleted in its entirety and replaced with the attached Revised Exhibit B.
|
3.
|
Exhibit D
. Exhibit D to the Agreement is hereby deleted ion its entirety and replaced with the attached Revised Exhibit D.
|
3.
|
New Section
. The following language is hereby added to the Agreement:
|
4.
|
No Other Changes
. Except as otherwise provided in this Amendment, the terms and conditions of the Agreement will continue in full force, nothing in the Amendment modifies any term or provision in the Agreement or the Continuing Guaranty.
|
INTEGRATED COMMERCIALIZATION
SOLUTIONS, INC.
|
THE MEDICINES COMPANY
|
||
By:
|
/s/ Peter Belden
|
By:
|
/s/ Daniel Tokich
|
Name:
|
Peter Belden
|
Name:
|
_
Daniel Tokich
|
Title:
|
President ICS
|
Title:
|
SVP Supply Chain
|
|
|
|
|
NDC#:
|
65293-001-01
|
Drug Type:
|
RX
|
Sellable Package Size:
|
Carton (10 single use vials)
|
Dosage Form:
|
250mg vial
|
Current WAC Price*:
|
$[***] per Carton, (*which may change from time to time at MDCO’s sole discretion)
|
Case Pack Size
|
Thirty (30) Cartons
|
Shipping and Storage Requirements:
|
20 to 25°C
|
Product Name:
|
ANGIOMAX® (bivalirudin) Nova Plus for Injection
|
NDC#:
|
65293-004-22
|
Drug Type:
|
RX
|
Sellable Package Size:
|
Carton (10 single use vials)
|
Dosage Form:
|
250mg vial
|
Current WAC Price*:
|
$[***] per Carton, (*which may change from time to time at MDCO’s sole discretion)
|
Case Pack Size
|
Thirty (30) Cartons
|
Shipping and Storage Requirements:
|
20 to 25°C
|
Sellable Package Size:
|
Carton (6 single use vials)
|
Current WAC Price*
|
$[***] Carton, (*which may change from time to time at MDCO’s sole discretion)
|
Current WAC Price*
|
$[***] Carton, (*which may change from time to time at MDCO’s sole discretion)
|
Current WAC Price*
|
$[***] Carton, (*which may change from time to time at MDCO’s sole discretion)
|
•
|
Warehousing Management and Inventory Administration
|
•
|
Customer Service / Order Entry
|
•
|
Marketing and Distribution Services
|
•
|
Invoicing and Accounts Receivable Management
|
•
|
Direct Account Set Up
|
•
|
Information Technology
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of The Medicines Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
/s/ Clive A. Meanwell
|
|
|
|
Clive A. Meanwell
|
|
|
|
Chief Executive Officer
|
Dated:
|
August 2, 2018
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of The Medicines Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
/s/ Christopher J. Visioli
|
|
|
|
Christopher J. Visioli
|
|
|
|
Chief Financial Officer
|
Dated:
|
August 2, 2018
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
By:
|
/s/ Clive A. Meanwell
|
|
|
|
|
Clive A. Meanwell
|
|
|
|
|
Chief Executive Officer
|
Dated:
|
August 2, 2018
|
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
By:
|
/s/ Christopher Visioli
|
|
|
|
|
Christopher Visioli
|
|
|
|
|
Chief Financial Officer
|
Dated:
|
August 2, 2018
|
|
|
|