þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
04-3324394
(I.R.S. Employer
Identification No.)
|
|
|
|
8 Sylvan Way
Parsippany, New Jersey
(Address of principal executive offices)
|
|
07054
(Zip Code)
|
Large accelerated filer þ
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Accelerated filer o
|
Non-accelerated filer o
|
Smaller reporting company o
|
Emerging growth company o
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|
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|
|
Page
|
|
|
|
|
EX-10.1
|
|
EX-31.1
|
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EX-31.2
|
|
EX-32.1
|
|
EX-32.2
|
|
EX-101
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
199,736
|
|
|
$
|
238,310
|
|
Short-term investment
|
2,353
|
|
|
2,627
|
|
||
Inventory, net
|
1,098
|
|
|
864
|
|
||
Prepaid expenses and other current assets
|
54,912
|
|
|
53,002
|
|
||
Total current assets
|
258,099
|
|
|
294,803
|
|
||
Fixed assets, net
|
8,372
|
|
|
8,872
|
|
||
Goodwill
|
200,571
|
|
|
200,571
|
|
||
Restricted cash
|
6,709
|
|
|
6,710
|
|
||
Contingent purchase price from sale of businesses
|
325,806
|
|
|
325,806
|
|
||
Other assets
|
36,296
|
|
|
4,924
|
|
||
Total assets
|
$
|
835,853
|
|
|
$
|
841,686
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
11,786
|
|
|
$
|
695
|
|
Accrued expenses
|
43,813
|
|
|
57,716
|
|
||
Other current liabilities
|
7,546
|
|
|
—
|
|
||
Total current liabilities
|
63,145
|
|
|
58,411
|
|
||
Convertible senior notes
|
808,701
|
|
|
792,752
|
|
||
Other liabilities
|
39,396
|
|
|
12,787
|
|
||
Total liabilities
|
911,242
|
|
|
863,950
|
|
||
Stockholders’ (deficit) equity:
|
|
|
|
||||
Preferred stock, $1.00 par value per share, 5,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value per share, 187,500,000 authorized; 76,884,069 issued and 73,870,926 outstanding at March 31, 2019 and 76,861,668 issued and 73,848,525 outstanding at December 31, 2018
|
77
|
|
|
77
|
|
||
Additional paid-in capital
|
1,460,545
|
|
|
1,452,975
|
|
||
Treasury stock, at cost; 3,013,143 shares at March 31, 2019 and December 31, 2018
|
(90,016
|
)
|
|
(90,016
|
)
|
||
Accumulated deficit
|
(1,440,589
|
)
|
|
(1,380,724
|
)
|
||
Accumulated other comprehensive loss
|
(5,406
|
)
|
|
(4,576
|
)
|
||
Total stockholders’ deficit
|
(75,389
|
)
|
|
(22,264
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
835,853
|
|
|
$
|
841,686
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net revenues
|
$
|
—
|
|
|
$
|
7,771
|
|
Operating expenses:
|
|
|
|
||||
Cost of revenues
|
—
|
|
|
2,737
|
|
||
Research and development
|
27,011
|
|
|
40,366
|
|
||
Selling, general and administrative
|
16,982
|
|
|
28,951
|
|
||
Total operating expenses
|
43,993
|
|
|
72,054
|
|
||
Loss from operations
|
(43,993
|
)
|
|
(64,283
|
)
|
||
Co-promotion and license income
|
—
|
|
|
228
|
|
||
Loss on short-term investment
|
(266
|
)
|
|
(29,989
|
)
|
||
Interest expense
|
(16,024
|
)
|
|
(12,077
|
)
|
||
Other income
|
421
|
|
|
2,369
|
|
||
Loss from continuing operations before income taxes
|
(59,862
|
)
|
|
(103,752
|
)
|
||
(Provision for) benefit from income taxes
|
(3
|
)
|
|
18,916
|
|
||
Loss from continuing operations
|
(59,865
|
)
|
|
(84,836
|
)
|
||
Income from discontinued operations, net of tax
|
—
|
|
|
113,985
|
|
||
Net (loss) income
|
$
|
(59,865
|
)
|
|
$
|
29,149
|
|
|
|
|
|
||||
Basic (loss) earnings per common share:
|
|
|
|
||||
Loss from continuing operations
|
$
|
(0.80
|
)
|
|
$
|
(1.15
|
)
|
Earnings from discontinued operations
|
—
|
|
|
1.54
|
|
||
Basic (loss) earnings per share
|
$
|
(0.80
|
)
|
|
$
|
0.39
|
|
|
|
|
|
||||
Diluted (loss) earnings per common share:
|
|
|
|
||||
Loss from continuing operations
|
$
|
(0.80
|
)
|
|
$
|
(1.15
|
)
|
Earnings from discontinued operations
|
—
|
|
|
1.54
|
|
||
Diluted (loss) earnings per share
|
$
|
(0.80
|
)
|
|
$
|
0.39
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding:
|
|
|
|
||||
Basic
|
74,463
|
|
|
73,802
|
|
||
Diluted
|
74,463
|
|
|
73,802
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net (loss) income
|
$
|
(59,865
|
)
|
|
$
|
29,149
|
|
Other comprehensive (loss) income:
|
|
|
|
||||
Foreign currency translation adjustment
|
(830
|
)
|
|
(471
|
)
|
||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
1,183
|
|
||
Other comprehensive (loss) income
|
(830
|
)
|
|
712
|
|
||
Comprehensive (loss) income
|
$
|
(60,695
|
)
|
|
$
|
29,861
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-in
|
|
Accumulated
|
|
Accumulated
Comprehensive
Income
|
|
Total
Stockholders’
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
(Loss)
|
|
Equity (Deficit)
|
||||||||||||||
Balance at January 1, 2018
|
76,191
|
|
|
$
|
76
|
|
|
(3,013
|
)
|
|
$
|
(90,016
|
)
|
|
$
|
1,377,393
|
|
|
$
|
(1,257,356
|
)
|
|
$
|
(5,183
|
)
|
|
$
|
24,914
|
|
Employee stock purchases
|
335
|
|
|
—
|
|
|
|
|
|
|
8,637
|
|
|
|
|
|
|
8,637
|
|
||||||||||
Issuance of restricted stock awards
|
35
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||
Non-cash stock compensation
|
|
|
|
|
|
|
|
|
4,454
|
|
|
|
|
|
|
4,454
|
|
||||||||||||
Adoption of new accounting standard related to revenue recognition
|
|
|
|
|
|
|
|
|
|
|
(210
|
)
|
|
|
|
(210
|
)
|
||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
29,149
|
|
|
|
|
29,149
|
|
||||||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
(471
|
)
|
|
(471
|
)
|
||||||||||||
Amounts reclassified from accumulated other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
1,183
|
|
|
1,183
|
|
||||||||||||
Balance at March 31, 2018
|
76,561
|
|
|
$
|
76
|
|
|
(3,013
|
)
|
|
$
|
(90,016
|
)
|
|
$
|
1,390,484
|
|
|
$
|
(1,228,417
|
)
|
|
$
|
(4,471
|
)
|
|
$
|
67,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at January 1, 2019
|
76,862
|
|
|
$
|
77
|
|
|
(3,013
|
)
|
|
$
|
(90,016
|
)
|
|
$
|
1,452,975
|
|
|
$
|
(1,380,724
|
)
|
|
$
|
(4,576
|
)
|
|
$
|
(22,264
|
)
|
Employee stock purchases
|
33
|
|
|
—
|
|
|
|
|
|
|
672
|
|
|
|
|
|
|
672
|
|
||||||||||
Issuance of restricted stock awards
|
(10
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||
Non-cash stock compensation
|
|
|
|
|
|
|
|
|
4,446
|
|
|
|
|
|
|
4,446
|
|
||||||||||||
Equity component of 2024 Notes issuance, net
|
|
|
|
|
|
|
|
|
2,452
|
|
|
|
|
|
|
2,452
|
|
||||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
(59,865
|
)
|
|
|
|
(59,865
|
)
|
||||||||||||
Currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
(830
|
)
|
|
(830
|
)
|
||||||||||||
Balance at March 31, 2019
|
76,885
|
|
|
$
|
77
|
|
|
(3,013
|
)
|
|
$
|
(90,016
|
)
|
|
$
|
1,460,545
|
|
|
$
|
(1,440,589
|
)
|
|
$
|
(5,406
|
)
|
|
$
|
(75,389
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net (loss) income
|
$
|
(59,865
|
)
|
|
$
|
29,149
|
|
Adjustments to reconcile net (loss) income to net cash used in operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
501
|
|
|
728
|
|
||
Amortization of debt discount
|
9,161
|
|
|
6,745
|
|
||
Unrealized foreign currency transaction losses, net
|
706
|
|
|
768
|
|
||
Stock compensation expense
|
4,446
|
|
|
4,454
|
|
||
Gain on sale of business
|
—
|
|
|
(168,955
|
)
|
||
Gain on sale of assets
|
(500
|
)
|
|
—
|
|
||
Loss on short-term investments
|
266
|
|
|
29,989
|
|
||
Reserve for excess or obsolete inventory
|
—
|
|
|
(410
|
)
|
||
Changes in contingent purchase price
|
—
|
|
|
(262
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
—
|
|
|
(4,206
|
)
|
||
Inventory, net
|
(138
|
)
|
|
1,213
|
|
||
Prepaid expenses and other assets
|
1,727
|
|
|
5,552
|
|
||
Accounts payable
|
11,098
|
|
|
(4,351
|
)
|
||
Accrued expenses
|
(14,313
|
)
|
|
(9,931
|
)
|
||
Other current liabilities
|
—
|
|
|
(4,047
|
)
|
||
Payments on contingent purchase price
|
—
|
|
|
(19
|
)
|
||
Other liabilities
|
(2,912
|
)
|
|
4,262
|
|
||
Net cash used in operating activities
|
(49,823
|
)
|
|
(109,321
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Proceeds from sale of assets
|
500
|
|
|
—
|
|
||
Purchases of fixed assets
|
—
|
|
|
(7
|
)
|
||
Proceeds from sale of business
|
—
|
|
|
166,383
|
|
||
Net cash provided by investing activities
|
500
|
|
|
166,376
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuances of common stock, net
|
672
|
|
|
8,683
|
|
||
Payments on contingent purchase price
|
—
|
|
|
(171
|
)
|
||
Proceeds from the issuance of convertible senior notes
|
9,500
|
|
|
—
|
|
||
Debt and equity issuance costs
|
(280
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
9,892
|
|
|
8,512
|
|
||
Effect of exchange rate changes on cash
|
856
|
|
|
(962
|
)
|
||
(Decrease) increase in cash, cash equivalents and restricted cash
|
(38,575
|
)
|
|
64,605
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
245,020
|
|
|
156,900
|
|
||
Cash, cash equivalents and restricted cash at end of period(a)
|
$
|
206,445
|
|
|
$
|
221,505
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
10,534
|
|
|
$
|
10,534
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Reconciliation of cash, cash equivalents and restricted cash
|
|
|
|
||||
Cash and cash equivalents
|
$
|
199,736
|
|
|
215,962
|
|
|
Restricted cash
|
6,709
|
|
|
5,543
|
|
||
Total cash, cash equivalents and restricted cash at end of period
|
$
|
206,445
|
|
|
$
|
221,505
|
|
|
December 31, 2018
|
|
Adoption Adjustment
|
|
January 1, 2019
|
||||||
Other assets
|
$
|
4,924
|
|
|
$
|
34,925
|
|
|
$
|
39,849
|
|
|
|
|
|
|
|
||||||
Other current liabilities
|
$
|
—
|
|
|
$
|
7,508
|
|
|
$
|
7,508
|
|
Other liabilities
|
$
|
12,787
|
|
|
$
|
27,417
|
|
|
$
|
40,204
|
|
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.
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||||||||||||||||||||||||||
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 March 31, 2019
|
|
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, 2018
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents
|
$
|
12,366
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,366
|
|
|
$
|
12,298
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,298
|
|
Short-term investment
|
2,353
|
|
|
—
|
|
|
—
|
|
|
2,353
|
|
|
2,627
|
|
|
—
|
|
|
—
|
|
|
2,627
|
|
||||||||
Total assets at fair value
|
$
|
14,719
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,719
|
|
|
$
|
14,925
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,925
|
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
(in thousands)
|
||||||
Raw materials
|
|
$
|
—
|
|
|
$
|
864
|
|
Work-in-progress
|
|
1,089
|
|
|
—
|
|
||
Finished goods
|
|
9
|
|
|
—
|
|
||
Total
|
|
$
|
1,098
|
|
|
$
|
864
|
|
•
|
during any calendar quarter commencing on or after March 31, 2019 (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 2024 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; or
|
•
|
upon the occurrence of specified corporate events.
|
Liability component
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
172,500
|
|
|
$
|
163,000
|
|
Less: Debt discount, net(1)
|
|
(47,816
|
)
|
|
(47,010
|
)
|
||
Net carrying amount
|
|
$
|
124,684
|
|
|
$
|
115,990
|
|
(1)
|
Included in the accompanying consolidated balance sheets within convertible senior notes (due 2024) and amortized to interest expense over the remaining life of the 2024 Notes using the effective interest rate method.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Contractual interest expense
|
$
|
1,518
|
|
|
$
|
—
|
|
Amortization of debt discount
|
1,905
|
|
|
—
|
|
||
Total
|
$
|
3,423
|
|
|
$
|
—
|
|
Effective interest rate of the liability component
|
11.125
|
%
|
|
—
|
%
|
•
|
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
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
402,500
|
|
|
$
|
402,500
|
|
Less: Debt discount, net(1)
|
|
(73,329
|
)
|
|
(76,925
|
)
|
||
Net carrying amount
|
|
$
|
329,171
|
|
|
$
|
325,575
|
|
(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 March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Contractual interest expense
|
$
|
2,767
|
|
|
$
|
2,767
|
|
Amortization of debt discount
|
3,597
|
|
|
3,331
|
|
||
Total
|
$
|
6,364
|
|
|
$
|
6,098
|
|
Effective interest rate of the liability component
|
7.5
|
%
|
|
7.5
|
%
|
•
|
during any calendar quarter commencing on or after March 31, 2015 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
|
•
|
during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price (as defined in the 2022 Notes Indenture) per $1,000 principal amount of 2022 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;
|
•
|
during any period after the Company has issued notice of redemption until the close of business on the scheduled trading day immediately preceding the relevant redemption date; or
|
•
|
upon the occurrence of specified corporate events.
|
Liability component
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
(in thousands)
|
||||||
Principal
|
|
$
|
399,997
|
|
|
$
|
399,997
|
|
Less: Debt discount, net(1)
|
|
(45,151
|
)
|
|
(48,810
|
)
|
||
Net carrying amount
|
|
$
|
354,846
|
|
|
$
|
351,187
|
|
(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 March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Contractual interest expense
|
$
|
2,500
|
|
|
$
|
2,500
|
|
Amortization of debt discount
|
3,659
|
|
|
3,414
|
|
||
Total
|
$
|
6,159
|
|
|
$
|
5,914
|
|
Effective interest rate of the liability component
|
6.5
|
%
|
|
6.5
|
%
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
Foreign currency translation adjustment
|
|
Foreign currency translation adjustment
|
||||
|
|
(in thousands)
|
||||||
Balance at beginning of period
|
|
$
|
(4,576
|
)
|
|
$
|
(5,183
|
)
|
Other comprehensive loss
|
|
(830
|
)
|
|
(471
|
)
|
||
Amounts reclassified from accumulated other comprehensive loss(1)
|
|
—
|
|
|
1,183
|
|
||
Total other comprehensive (loss) income
|
|
(830
|
)
|
|
712
|
|
||
Balance at end of period
|
|
$
|
(5,406
|
)
|
|
$
|
(4,471
|
)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
|
($ in thousands)
|
||||||||||||
Long-lived assets:
|
|
|
|
|
|
|
|
||||||
United States
|
$
|
572,158
|
|
|
99.0
|
%
|
|
$
|
541,268
|
|
|
99.0
|
%
|
Europe
|
5,596
|
|
|
1.0
|
%
|
|
5,615
|
|
|
1.0
|
%
|
||
Total long-lived assets
|
$
|
577,754
|
|
|
100.0
|
%
|
|
$
|
546,883
|
|
|
100.0
|
%
|
|
Balance as of January 1, 2019
|
|
Expenses,
Net
|
|
Cash
|
|
Noncash
|
|
Balance as of March 31, 2019
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
2018 Workforce reduction
|
$
|
2,334
|
|
|
$
|
—
|
|
|
$
|
(1,517
|
)
|
|
$
|
—
|
|
|
$
|
817
|
|
|
Three Months Ended March 31, 2018
|
||
|
(In thousands)
|
||
Net product revenues
|
$
|
(26
|
)
|
Operating expenses:
|
|
||
Cost of revenue
|
214
|
|
|
Research and development
|
412
|
|
|
Selling, general and administrative
|
3,096
|
|
|
Total operating expenses
|
3,722
|
|
|
Loss from operations
|
(3,748
|
)
|
|
Gain from sale of business
|
168,955
|
|
|
Other income (expense), net
|
(74
|
)
|
|
Income (loss) from discontinued operations before income taxes
|
165,133
|
|
|
Provision for (benefit from) income taxes
|
51,148
|
|
|
Income (loss) from discontinued operations, net of tax
|
$
|
113,985
|
|
|
Three months ended March 31, 2018
|
||
|
(In thousands)
|
||
Gain on sale of business
|
$
|
(168,955
|
)
|
Proceeds from sale of business
|
166,383
|
|
|
|
March 31,
2019 |
||
|
|
(in thousands)
|
||
Other assets
|
|
$
|
33,819
|
|
|
|
|
||
Liabilities
|
|
|
||
Other current liabilities
|
|
$
|
7,546
|
|
Other liabilities
|
|
32,513
|
|
|
Total Lease Liabilities
|
|
$
|
40,059
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
Change $
|
|
Change %
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Net revenues
|
$
|
—
|
|
|
$
|
7,771
|
|
|
$
|
(7,771
|
)
|
|
(100.0
|
)%
|
•
|
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, or Biogen, and Health Research Inc. related to Angiomax; and
|
•
|
expenses associated with severance and other exit costs
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
% of Total
|
|||
|
|
(in thousands)
|
|
|
|||
Manufacturing/Logistics
|
|
$
|
2,606
|
|
|
95.2
|
%
|
Royalties
|
|
131
|
|
|
4.8
|
%
|
|
Total cost of revenues
|
|
$
|
2,737
|
|
|
100.0
|
%
|
|
Three Months Ended March 31,
|
||||||||||||
|
2019
|
|
% of Total
|
|
2018
|
|
% of Total
|
||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||
Marketed products
|
|
|
|
|
|
|
|
||||||
Total marketed products
|
$
|
2
|
|
|
—
|
%
|
|
$
|
148
|
|
|
0.4
|
%
|
Research and development product candidates
|
|
|
|
|
|
|
|
||||||
Inclisiran
|
26,344
|
|
|
97.5
|
%
|
|
36,622
|
|
|
90.7
|
%
|
||
Other
|
665
|
|
|
2.5
|
%
|
|
3,596
|
|
|
8.9
|
%
|
||
Total research and development product candidates
|
27,009
|
|
|
100.0
|
%
|
|
40,218
|
|
|
99.6
|
%
|
||
Total research and development expenses
|
$
|
27,011
|
|
|
100.0
|
%
|
|
$
|
40,366
|
|
|
100.0
|
%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
Change $
|
|
Change %
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Selling, marketing and promotional
|
$
|
4,265
|
|
|
3,081
|
|
|
$
|
1,184
|
|
|
38.4
|
%
|
|
General corporate and administrative
|
12,717
|
|
|
25,870
|
|
|
(13,153
|
)
|
|
(50.8
|
)%
|
|||
Total selling, general and administrative expenses
|
$
|
16,982
|
|
|
$
|
28,951
|
|
|
$
|
(11,969
|
)
|
|
(41.3
|
)%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
Change $
|
|
Change %
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Co-promotion and license income
|
$
|
—
|
|
|
$
|
228
|
|
|
$
|
(228
|
)
|
|
(100.0
|
)%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
Change $
|
|
Change %
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Loss on short-term investment
|
$
|
(266
|
)
|
|
$
|
(29,989
|
)
|
|
$
|
29,723
|
|
|
(99.1
|
)%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
Change $
|
|
Change %
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Interest expense
|
$
|
16,024
|
|
|
$
|
12,077
|
|
|
$
|
3,947
|
|
|
32.7
|
%
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
Change $
|
|
Change %
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Other income
|
$
|
421
|
|
|
$
|
2,369
|
|
|
$
|
(1,948
|
)
|
|
(82.2
|
)%
|
|
Three Months Ended March 31,
|
||||||||||||
|
2019
|
|
2018
|
|
Change $
|
|
Change %
|
||||||
|
(in thousands)
|
|
|
||||||||||
(Provision for) benefit from income taxes
|
$
|
(3
|
)
|
|
$
|
18,916
|
|
|
$
|
(18,919
|
)
|
|
*
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
Change $
|
|
Change %
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Income from discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
113,985
|
|
|
$
|
(113,985
|
)
|
|
100.0
|
%
|
•
|
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 or from the future payments, if any, which we are entitled from Melinta due to the sale of the infectious disease business and connected to our ongoing litigation with Melinta;
|
•
|
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;
|
•
|
our ability to defend and enforce our intellectual property rights; and
|
•
|
our ability to defend ourselves and prevail in current and, if any, future litigation matters.
|
•
|
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;
|
•
|
attract and retain qualified management, sales, professional, scientific and technical operating personnel; and
|
•
|
enter into suitable partnerships with third parties, as needed, to provide a viable platform to commercialize inclisiran.
|
•
|
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 or from the future payments, if any, which we are entitled from Melinta due to the sale of the infectious disease business and connected to our ongoing litigation with Melinta;
|
•
|
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;
|
•
|
our ability to defend and enforce our intellectual property rights; and
|
•
|
our ability to defend ourselves and prevail in current and, if any, future litigation matters.
|
•
|
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 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.
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•
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collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;
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•
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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;
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•
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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;
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•
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collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products in development if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
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•
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a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products;
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•
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collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or otherwise expose us to potential litigation;
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•
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collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;
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•
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disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaborations;
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•
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disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our products or products in development or that result in costly litigation or arbitration that diverts management attention and resources; and
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•
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collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable products and products in development.
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•
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our clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials which even if undertaken cannot ensure we will gain approval;
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•
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data obtained from pre-clinical testing and clinical trials may be subject to varying interpretations, which could result in the FDA or other regulatory authorities deciding not to approve a product in a timely fashion, or at all;
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the cost of clinical trials may be greater than we currently anticipate;
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•
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regulators, ethics committees or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site;
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•
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we, or the FDA or other regulatory authorities, might suspend or terminate a clinical trial at any time on various grounds, including a finding that participating patients are being exposed to unacceptable health risks. For example, we have in the past voluntarily suspended enrollment in one of our clinical trials to review an interim analysis of safety data from the trial; and
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•
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the effects of inclisiran may not be the desired effects or may include undesirable side effects or inclisiran may have other unexpected characteristics.
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•
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delay in approving or refusal to approve a product;
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•
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product recall or seizure;
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•
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suspension or withdrawal of an approved product from the market;
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•
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delays in, suspension of or prohibition of commencing, clinical trials of inclisiran;
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•
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interruption of production;
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•
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operating restrictions;
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•
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untitled or warning letters;
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•
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injunctions;
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fines and other monetary penalties;
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•
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the imposition of civil or criminal penalties;
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disruption of importing and exporting activities; and
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•
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unanticipated expenditures.
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•
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the Federal Anti-Kickback Law, which prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual or furnishing or arranging for a good or service for which payment may be made under federal health care programs such as Medicare and Medicaid;
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•
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other Medicare laws and regulations that prescribe the requirements for coverage and payment for services performed by our customers, including the amount of such payment;
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the Federal False Claims Act, which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government;
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•
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the Federal False Statements Act, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with delivery of or payment for health care benefits, items or services; and
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•
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various state laws that impose similar requirements and liability with respect to state healthcare reimbursement and other programs.
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obtain and maintain U.S. and foreign patents, including defending those patents against adverse claims;
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secure patent term extension for the patents covering our approved products;
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protect trade secrets;
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operate without infringing the proprietary rights of others; and
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•
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prevent others from infringing our proprietary rights.
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•
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announcements of results of clinical trials or nonclinical studies by us or third parties relating to inclisiran or products of our competitors or of regulatory proceedings by us or our competitors;
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•
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approval or rejection of submissions for marketing approval for inclisiran;
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•
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changes in securities analysts’ estimates of our financial performance;
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•
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changes in valuations of similar companies;
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•
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variations in our operating results;
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•
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acquisitions and strategic partnerships;
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•
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announcements of technological innovations or new commercial products by us or our competitors or the filing of Abbreviated New Drug Applications, NDAs or BLAs for products competitive with ours;
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•
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changes in governmental regulations;
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•
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developments in patent rights or other proprietary rights;
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•
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the extent to which our products are commercially successful globally;
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•
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developments in our ongoing litigation and significant new litigation;
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developments or issues with our contract manufacturers;
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•
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changes in our management; and
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•
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general market conditions.
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•
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Section 203 of the Delaware General Corporation Law, which provides that we may not enter into a business combination with an interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in the manner prescribed in Section 203;
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•
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our board of directors has the authority to issue, without a vote or action of stockholders, up to 5,000,000 shares of a new series of preferred stock and to fix the price, rights, preferences and privileges of those shares, each of which could be superior to the rights of holders of our common stock;
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•
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our directors may be removed with or without cause 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;
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•
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the size of our board of directors is determined by resolution of the board of directors;
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•
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any vacancy on our board of directors, however occurring, including a vacancy resulting from an enlargement of our board, may only be filled by vote of a majority of our directors then in office, even if less than a quorum;
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only our board of directors may call special meetings of stockholders;
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•
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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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•
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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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•
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stockholders may not take any action by written consent in lieu of a meeting; and
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•
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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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•
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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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•
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if individuals are elected to our board of directors with a specific agenda different from ours, it may adversely affect our ability to effectively and timely implement our strategic plan and create additional value for our stockholders.
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THE MEDICINES COMPANY
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Date:
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April 26, 2019
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By:
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/s/ Christopher J. Visioli
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Christopher J. Visioli
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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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Separation Agreement, dated March 15, 2019, between Christopher Cox and the registrant (filed herewith)
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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 March 31, 2019, 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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You will receive payments of any wages owed through the Termination Date and any unused vacation time accrued through the Termination Date;
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◦
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You may elect to purchase group medical insurance pursuant to the federal “COBRA” law, 29 U.S.C. § 1161 et seq., with all premium costs paid by you on a monthly basis for as long as, and to the extent that, you remain eligible for COBRA continuation. You will receive an enrollment packet from our COBRA administrator, Discovery Benefits, with instructions on how to elect coverage;
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◦
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Health, dental and vision benefits, if elected, provided to you as an employee of the Company will cease on March 31, 2019. Welfare benefits such as life insurance and long-term disability will cease upon the Termination Date; and
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◦
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Vesting under any stock option grants you have received from the Company ends on the Termination Date, subject to Paragraph 2(ii) below. Nothing in this letter agreement shall constitute a waiver or amendment of any rights you may have under any stock option grants you have received from the Company. You will have a period of three (3) months after the Termination Date to exercise all of the options that have vested, subject to Paragraph 2(iii) below.
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1.
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Termination of Employment - Your employment with the Company terminates on March 15, 2019 and all benefits of employment cease on such date with the exception of health, dental and vision benefits, if elected, which will cease on March 31, 2019.
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2.
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Description of Severance Benefits – Subject to your compliance with the terms of this letter agreement, the Company will pay to you, and you will be entitled to receive, the following (collectively, the “Severance Benefits”):
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3.
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Release - In consideration of the payment and provision of the Severance Benefits, you hereby fully, forever, irrevocably and unconditionally release, remise and discharge the Company, its officers, directors, stockholders, corporate affiliates, subsidiaries, parent companies, agents and employees (each in their individual and corporate capacities) (hereinafter, the "Released Parties") from any and all claims, charges, complaints, demands, actions, causes of action, suits, rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions, damages, executions, obligations, liabilities, and expenses (including attorneys’ fees and costs), of every kind and nature which you ever had or now have against the Released Parties arising out of your employment with and/or separation from the Company, including, but not limited to:
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(i)
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any agreement (other than this letter agreement) you have with the Company relating to your employment with the Company;
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(ii)
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all employment discrimination claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Americans With Disabilities Act of 1990, 42 U.S.C., §12101 et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the Older Workers Benefits Protection Act, the Equal Pay Act, the Worker Adjustment Retraining and Notification Act, the Federal Fair Labor Standards Act, any applicable Executive Order Programs and their state and local counterparts, the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq., all claims arising out of the Fair Credit Reporting Act, 15 U.S.C. §1681 et seq., the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1001 et seq., the New Jersey Conscientious Employee Protection Act, N.J.S.A. 34:19-1 et seq., the New Jersey Family Leave Act, N.J.S.A. 34:11B-1 et seq., the New Jersey Workers’ Compensation Act, the New Jersey Millville Dallas Airmotive Plant Job Loss Notification Act, the New Jersey State Wage and Hour Law, the New Jersey Wage Payment Law and the New Jersey Political Activities of Employees law, all as amended;
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(iii)
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all common law claims including, but not limited to, actions in tort, defamation, infliction of emotional distress and breach of contract; all claims arising under any policies, practices or procedures of the Company; all claims to any non-vested ownership interest in the Company, contractual or otherwise, including but not limited to claims to stock or stock options;
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(iv)
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any other claim for damage arising out of your employment with or separation from the Company (including a claim for retaliation) under any common law theory or any federal, state or local statute or ordinance not expressly referenced above; and
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(v)
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Nothing in this letter agreement, including paragraphs 3, 4, 7 and 12, shall prohibit or restrict you (or your attorney) from filing a charge, testifying, assisting, or participating in any manner in an investigation, hearing or proceeding; responding to any inquiry; or otherwise communicating with, any administrative or regulatory (including any self-regulatory) agency or authority, including, but not limited to, the Securities and Exchange Commission (SEC), the US Department of Justice (DOJ), the US Congress, any agency Inspector General, the Equal Employment Opportunity Commission (EEOC) and the National Labor Relations Board (NLRB).
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4.
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Continuing Obligations -
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(i)
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You acknowledge and reaffirm your obligation to keep confidential all non-public information concerning the Company which you acquired during the course of your employment with the Company, as stated more fully in the Invention and Non-Disclosure Agreement, and your obligations not to solicit or hire employees of the Company, as stated more fully in the Non-Solicitation Agreement, both of which agreements you executed at the inception of your employment and which remain in full force and effect following the termination of your employment. Notwithstanding, pursuant to the Defend Trade Secrets Act of 2016, an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer's trade secrets to the attorney and use the trade secret information in the court proceeding if the individual: (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.
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(ii)
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You also agree to make yourself reasonably available to assist the Company in the prosecution and/or defense of any legal proceedings in which your participation, as a witness or otherwise, may be required. You also agree to make yourself reasonably available to assist the Company in connection with the defense or prosecution of any claim that may be made against or by Company, or in connection with any ongoing or future investigation or dispute or claim of any kind involving the Company, including meeting with the Company’s counsel, any proceeding before any arbitral, administrative, judicial, legislative, or other body or agency, including testifying in any proceeding to the extent such claims, investigations or proceedings relate to services performed or required to be performed by you, pertinent knowledge possessed by you, or any act or omission by you. You further agree to perform all acts and execute and deliver any documents that may be reasonably necessary to carry out the provisions of this paragraph.
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(iii)
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You also agree to hold all equity of the Company for at least 12 months from the Termination Date, provided, however, that the restrictions imposed by this paragraph 4(iii) shall not apply to the tender, transfer or disposition of shares of Company common stock or any securities convertible into or exercisable or exchangeable for Company common stock (1) in connection with a change of control transaction of the Company, including pursuant to any tender offer for Company common stock that, if consummated, would result in a change of control of the Company, (2) as a bona fide gift or gifts, (3) to your immediate family, (4) to any trust for the direct or indirect benefit of you or your immediate family in a transaction not involving a disposition for value, (5) to any corporation, partnership, limited liability company or other entity all of the beneficial ownership interests of which are held by you or your immediate family in a transaction not involving a disposition for value or (6) by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of your immediate family; provided that, in cases (2) – (6) above, no filing by any party (donor, donee, transferor or transferee) under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other public announcement, reporting a reduction in beneficial ownership of shares of Common Stock held by the undersigned shall be required or shall be made voluntarily in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the 12-month period referred to above).
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5.
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Return of Company Property - You understand that you must return all property of the Company. By signing this letter agreement, you confirm and acknowledge that you have returned to the Company all keys, files, records (and copies thereof), equipment (including, but not limited to, computer hardware, software and printers, wireless handheld devices, cellular phones, pagers, etc.), Company identification, Company vehicles and any other Company-owned property in your possession or control and have left intact all electronic Company documents, including but not limited to those which you developed or help develop during your employment. You further confirm that you have cancelled all accounts for your benefit, if any, in the Company's name, including but not limited to, credit cards, telephone charge cards, cellular phone and/or pager accounts and computer accounts.
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6.
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Business Expenses and Compensation - You acknowledge that you have been reimbursed by the Company for all business expenses incurred in conjunction with the performance of your employment and that no other reimbursements are owed to you. You further acknowledge that you have received payment in full for all services rendered in conjunction with your employment by the Company and that no other compensation is owed to you.
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7.
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Non-Disparagement - You understand and agree that as a condition for payment to you of the consideration described herein, you shall not make any false, disparaging or derogatory statements to any media outlet, industry group or financial institution; current or former employee, consultant, client or customer of the Company; or any other person or entity with whom or which the Company has an actual or prospective business relationship, in each case regarding the Company or any of its directors, officers, employees, agents or representatives or about the Company’s business affairs and financial condition. The Company agrees that it will cause its current officers, directors and employees not to make any false, disparaging or derogatory statements about you to any media outlet, industry group or financial institution; current or former employee, consultant, client or customer of the Company; or any other person or entity with whom or which you have an actual or prospective business relationship.
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8.
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Neutral Reference - You are directed to have all inquiries for references regarding your employment with the Company directed to Richard Fires, Chief Human Strategy Officer. The Company will then provide your dates of employment and position held and will not provide any other information to any such inquirer.
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9.
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Amendment - This letter agreement shall be binding upon the parties and may not be modified in any manner, except by an instrument in writing of concurrent or subsequent date signed by duly authorized representatives of the parties hereto. This letter agreement is binding upon and shall inure to the benefit of the parties and their respective agents, assigns, heirs, executors, successors and administrators.
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10.
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Waiver of Rights - No delay or omission by the Company in exercising any right under this letter agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.
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11.
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Validity - Should any provision of this letter agreement be declared or be determined by any court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of this letter agreement.
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12.
|
Confidentiality - You understand and agree that as a condition for payment to you of the Severance Benefits, the terms and contents of this letter agreement, and the negotiations and discussions resulting in this letter agreement, shall be maintained as confidential by you and your agents and representatives and shall not be disclosed by you or your agents or representatives to any person except you may make such disclosures: (a) to your immediate family, tax advisors, or taxing authorities, so long as such person or entity agrees to be bound by the confidential nature of this letter agreement; (b) to your legal counsel; (c) pursuant to the order of a court; (d) while engaging in the activities referenced in paragraph 3(v) of this letter agreement; (e) for purposes of securing enforcement of the terms and conditions of this letter agreement, should that ever be necessary; and (f) as agreed to in writing by the Company.
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13.
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409(A) – The Company may deduct or withhold from any compensation or benefits any applicable federal, state or local tax or employment withholdings or deductions resulting from any payments or benefits provided under this letter agreement. In addition, it is the Company’s intention that all payments or benefits provided under this letter agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), including without limitation the six month delay for payments of deferred compensation to “key employees” upon separation from service pursuant to Section 409A(a)(2)(B)(i) of the Code (if applicable), and this letter agreement shall be interpreted, administered and operated accordingly. If under this letter agreement an amount is to be paid in installments, each installment shall be treated as a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii). Notwithstanding anything to the contrary herein, the Company does not guarantee the tax treatment of any payments or benefits under this letter agreement, including without limitation under the Code, federal, state, local or foreign tax laws and regulations. In no event may you, directly or indirectly, designate the calendar year of any payment under this letter agreement. In the event the period of notice and severance benefits referenced in Paragraph 2 of this letter agreement ends in the taxable year following your termination of employment, any severance payment or deferred compensation payment shall be paid or commence in such subsequent taxable year if required under Section 409A of the Code.
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14.
|
Nature of Agreement - You understand and agree that this letter agreement is a severance agreement and does not constitute an admission of liability or wrongdoing on the part of the Company.
|
15.
|
Voluntary Assent - You affirm that no other promises or agreements of any kind have been made to or with you by any person or entity whatsoever to cause you to sign this letter agreement, and that you fully understand the meaning and intent of this letter agreement. You state and represent that you have had an opportunity to fully discuss and review the terms of this letter agreement with an attorney. You further state and represent that you have carefully read this letter agreement, understand the contents hereof, freely and voluntarily assent to all of the terms and conditions hereof, and sign your name of your own free act.
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16.
|
Acknowledgement –
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17.
|
Revocation - You may revoke your agreement to this letter agreement for a period of seven (7) days following the date you deliver the signed agreement to the Company. Any revocation within this period must be submitted in writing to Richard Fires and state “I hereby revoke my agreement to this letter agreement dated March 15, 2019.” The revocation must be delivered to, and received by, the Company within seven (7) days after the day you deliver the signed agreement to the Company. This letter agreement shall not become effective or enforceable until the revocation period has expired without your having revoked your agreement.
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18.
|
Applicable Law - This letter agreement shall be interpreted and construed by the laws of the State of New Jersey, without regard to conflict of laws provisions.
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19.
|
Entire Agreement - This letter agreement contains and constitutes the entire understanding and agreement between the parties hereto with respect to the termination of your employment with the Company, the Severance Pay and the release of claims against the Company and cancels all previous oral and written negotiations, agreements, commitments, writings in connection therewith. Nothing in this Paragraph 19, however, shall modify, cancel, or supersede your obligations set forth in Paragraph 3 herein.
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1.
|
I have reviewed this Quarterly Report on Form 10-Q of The Medicines Company;
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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
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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
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Mark Timney
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Mark Timney
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Chief Executive Officer
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Dated:
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April 26, 2019
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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;
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4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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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;
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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
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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
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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/ Christopher J. Visioli
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Christopher J. Visioli
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Chief Financial Officer
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Dated:
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April 26, 2019
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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/ Mark Timney
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Mark Timney
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Chief Executive Officer
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Dated:
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April 26, 2019
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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/ Christopher Visioli
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Christopher Visioli
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Chief Financial Officer
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Dated:
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April 26, 2019
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