|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
001-36257
|
|
27-4842691
|
|
|
(State or other
jurisdiction of
incorporation or
organization)
|
|
(Commission File
No.)
|
|
(I.R.S. Employer
Identification No.)
|
|
Large accelerated filer
|
¨
|
Accelerated filer
|
þ
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
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|
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Page No.
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||
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||
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||
|
||
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||
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||
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|
||
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September 30, 2015
|
|
December 31, 2014
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
|
|
||
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
140,596
|
|
|
$
|
18,204
|
|
Marketable securities
|
94,681
|
|
|
9,556
|
|
||
Accounts receivable, net
|
13,499
|
|
|
7,960
|
|
||
Inventory, net
|
2,650
|
|
|
801
|
|
||
Prepaid expenses and other current assets
|
2,002
|
|
|
813
|
|
||
Note receivable
|
46,526
|
|
|
—
|
|
||
Total current assets
|
299,954
|
|
|
37,334
|
|
||
|
|
|
|
||||
Property and equipment, net
|
478
|
|
|
671
|
|
||
Other asset
|
2,006
|
|
|
2,265
|
|
||
Intangible assets, net
|
162,997
|
|
|
94,265
|
|
||
Goodwill
|
936
|
|
|
936
|
|
||
Long term note receivable
|
45,259
|
|
|
—
|
|
||
Total assets
|
$
|
511,630
|
|
|
$
|
135,471
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity (Deficit)
|
|
|
|
|
|
||
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
||
Deferred technology purchase liability
|
$
|
1,000
|
|
|
$
|
1,000
|
|
Accounts payable
|
4,893
|
|
|
7,124
|
|
||
Accrued expenses
|
22,318
|
|
|
27,883
|
|
||
Other liability
|
1,027
|
|
|
938
|
|
||
Acquisition-related contingent consideration
|
5,069
|
|
|
2,118
|
|
||
Derivative financial instruments, warrants
|
42,120
|
|
|
27,990
|
|
||
Note payable
|
—
|
|
|
40,486
|
|
||
Short term deferred income tax liability, net
|
15,892
|
|
|
—
|
|
||
Taxes payable
|
9,628
|
|
|
—
|
|
||
Total current liabilities
|
101,947
|
|
|
107,539
|
|
||
|
|
|
|
||||
Convertible debt
|
43,747
|
|
|
43,288
|
|
||
Other liability
|
13,915
|
|
|
12,234
|
|
||
Acquisition-related contingent consideration, less current portion
|
48,651
|
|
|
9,520
|
|
||
Long term deferred income tax liability, net
|
12,358
|
|
|
141
|
|
||
Total liabilities
|
220,618
|
|
|
172,722
|
|
||
|
|
|
|
||||
Stockholders' Equity (Deficit):
|
|
|
|
|
|
||
Preferred stock $0.001 par value; 20,000,000 shares authorized; 0 issued and outstanding as of September 30, 2015 and December 31, 2014
|
—
|
|
|
—
|
|
||
Common stock $0.0001 par value; 100,000,000 shares authorized; 36,008,096 and 26,428,071 issued and 36,008,096 and 26,048,480 outstanding as of September 30, 2015 and December 31, 2014, respectively
|
4
|
|
|
3
|
|
||
Additional paid-in capital
|
353,794
|
|
|
140,851
|
|
||
Treasury stock, at cost, 0 and 379,591 shares as of September 30, 2015 and December 31, 2014, respectively
|
—
|
|
|
(3,215
|
)
|
||
Accumulated deficit
|
(62,684
|
)
|
|
(179,175
|
)
|
||
Accumulated other comprehensive income (loss)
|
(102
|
)
|
|
4,285
|
|
||
Total stockholders' equity (deficit)
|
291,012
|
|
|
(37,251
|
)
|
||
Total liabilities and stockholders' equity (deficit)
|
$
|
511,630
|
|
|
$
|
135,471
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
(As Restated)
|
|
|
|
(As Restated)
|
||||||||
Net product sales
|
$
|
28,005
|
|
|
$
|
8,349
|
|
|
$
|
69,444
|
|
|
$
|
14,118
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold
|
513
|
|
|
198
|
|
|
1,424
|
|
|
233
|
|
||||
Research and development
|
14,064
|
|
|
12,646
|
|
|
34,974
|
|
|
32,899
|
|
||||
Selling, general and administrative
|
22,308
|
|
|
17,372
|
|
|
56,856
|
|
|
42,097
|
|
||||
Change in valuation of contingent consideration
|
6,906
|
|
|
—
|
|
|
7,026
|
|
|
—
|
|
||||
Impairment of intangible assets
|
4,710
|
|
|
—
|
|
|
4,710
|
|
|
—
|
|
||||
Total operating expenses
|
48,501
|
|
|
30,216
|
|
|
104,990
|
|
|
75,229
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating loss
|
(20,496
|
)
|
|
(21,867
|
)
|
|
(35,546
|
)
|
|
(61,111
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expenses), net:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Litigation settlement gain
|
—
|
|
|
—
|
|
|
15,500
|
|
|
—
|
|
||||
Other income (expense), net
|
(314
|
)
|
|
170
|
|
|
35
|
|
|
545
|
|
||||
Interest expense, net
|
(695
|
)
|
|
(2,629
|
)
|
|
(7,415
|
)
|
|
(4,808
|
)
|
||||
Debt early payment penalty
|
—
|
|
|
—
|
|
|
(2,250
|
)
|
|
—
|
|
||||
Loss on extinguishment of debt
|
(4,151
|
)
|
|
—
|
|
|
(4,151
|
)
|
|
—
|
|
||||
Finance expense
|
—
|
|
|
(13
|
)
|
|
(600
|
)
|
|
(4,721
|
)
|
||||
Change in fair value of derivative instruments
|
29,991
|
|
|
6,359
|
|
|
(36,180
|
)
|
|
(14,276
|
)
|
||||
Gain on sale of assets
|
140,004
|
|
|
—
|
|
|
140,004
|
|
|
—
|
|
||||
Bargain Purchase Gain
|
—
|
|
|
—
|
|
|
49,063
|
|
|
—
|
|
||||
Total other income (expense), net
|
164,835
|
|
|
3,887
|
|
|
154,006
|
|
|
(23,260
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (Loss) before provision for income taxes
|
144,339
|
|
|
(17,980
|
)
|
|
118,460
|
|
|
(84,371
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax benefit (provision)
|
(38,761
|
)
|
|
—
|
|
|
1,246
|
|
|
2,460
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
105,578
|
|
|
$
|
(17,980
|
)
|
|
$
|
119,706
|
|
|
$
|
(81,911
|
)
|
Net income (loss) per common share, basic
|
$
|
2.95
|
|
|
$
|
(0.67
|
)
|
|
$
|
3.67
|
|
|
$
|
(3.25
|
)
|
Net income (loss) per common share, diluted
|
$
|
1.78
|
|
|
$
|
(0.84
|
)
|
|
$
|
3.30
|
|
|
$
|
(3.25
|
)
|
Weighted average common shares outstanding, basic
|
35,741,877
|
|
|
26,682,510
|
|
|
32,650,408
|
|
|
25,229,847
|
|
||||
Weighted average common shares outstanding, diluted
|
42,752,859
|
|
|
28,210,225
|
|
|
36,800,536
|
|
|
25,229,847
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
$
|
105,578
|
|
|
$
|
(17,980
|
)
|
|
$
|
119,706
|
|
|
$
|
(81,911
|
)
|
Foreign currency translation
|
14
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Unrealized gain (loss) on marketable securities
|
(876
|
)
|
|
3,232
|
|
|
(4,395
|
)
|
|
3,751
|
|
||||
Comprehensive income (loss)
|
$
|
104,716
|
|
|
$
|
(14,748
|
)
|
|
$
|
115,319
|
|
|
$
|
(78,160
|
)
|
|
For the Nine Months Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
|
|
|
(As Restated)
|
||||
Cash Flows From Operating Activities:
|
|
|
|
|
|
||
Net income (loss)
|
$
|
119,706
|
|
|
$
|
(81,911
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
9,417
|
|
|
3,543
|
|
||
Realized loss on marketable securities
|
293
|
|
|
(544
|
)
|
||
Gain upon divestiture of Pediatric Priority Review Voucher
|
(140,004
|
)
|
|
—
|
|
||
Gain upon divestiture of other assets
|
(200
|
)
|
|
|
|||
Deferred income tax provision
|
(11,791
|
)
|
|
—
|
|
||
Amortization of debt discount and deferred financing costs
|
1,175
|
|
|
571
|
|
||
Lease liability
|
32
|
|
|
—
|
|
||
Settlement expense
|
—
|
|
|
5,684
|
|
||
Loss on early retirement of debt
|
4,151
|
|
|
—
|
|
||
Impairment of intangible assets
|
4,710
|
|
|
—
|
|
||
Loss on disposal of fixed assets
|
112
|
|
|
—
|
|
||
Bargain purchase gain
|
(49,063
|
)
|
|
—
|
|
||
Share based compensation
|
18,748
|
|
|
9,237
|
|
||
Derivative financial instruments, warrants, issued, recorded in interest expense
|
1,050
|
|
|
—
|
|
||
Change in estimated fair value of derivative financial instruments, warrants
|
36,180
|
|
|
14,276
|
|
||
Change in fair value of contingent consideration
|
7,026
|
|
|
|
|||
Non-cash financing cost
|
—
|
|
|
4,708
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
Accounts receivable
|
(5,540
|
)
|
|
(4,676
|
)
|
||
Inventory
|
(1,071
|
)
|
|
(165
|
)
|
||
Prepaid expenses and other assets
|
(1,712
|
)
|
|
(1,242
|
)
|
||
Accounts payable and accrued expenses
|
(852
|
)
|
|
13,764
|
|
||
Income Taxes Payable
|
9,628
|
|
|
—
|
|
||
Net cash provided by (used in) operating activities
|
1,995
|
|
|
(36,755
|
)
|
||
|
|
|
|
||||
Cash Flows From Investing Activities:
|
|
|
|
|
|
||
Purchase of fixed assets
|
(35
|
)
|
|
(581
|
)
|
||
Purchase of intangible assets
|
(5,271
|
)
|
|
(3,302
|
)
|
||
Proceeds from the sale of marketable securities
|
4,977
|
|
|
2,252
|
|
||
Purchase of marketable securities
|
(94,793
|
)
|
|
(10,149
|
)
|
||
Proceeds from securities sold, not yet purchased
|
—
|
|
|
7,500
|
|
||
Securities sold, not yet purchased
|
—
|
|
|
(5,310
|
)
|
||
Cash paid for investment
|
—
|
|
|
(400
|
)
|
||
Security deposits
|
—
|
|
|
(93
|
)
|
||
Cash received upon sale of assets, net
|
148,411
|
|
|
—
|
|
||
Cash paid upon acquisition, net of cash acquired
|
(33,430
|
)
|
|
(29,150
|
)
|
||
Net cash provided by (used in) investing activities
|
19,859
|
|
|
(39,233
|
)
|
||
|
|
|
|
||||
Cash Flows From Financing Activities:
|
|
|
|
|
|
||
Payment of acquisition-related contingent consideration
|
(2,498
|
)
|
|
(562
|
)
|
||
Payment of guaranteed minimum royalty
|
(527
|
)
|
|
—
|
|
||
Proceeds from the exercise of warrants
|
4,372
|
|
|
8,337
|
|
||
Proceeds from the exercise of stock options
|
5,237
|
|
|
—
|
|
||
Purchase of treasury stock, at cost
|
—
|
|
|
(2,257
|
)
|
||
Proceeds received from issuance of common stock
|
149,454
|
|
|
36,835
|
|
||
Financing costs from issuance of common stock
|
(9,500
|
)
|
|
—
|
|
||
Proceeds from credit agreement
|
—
|
|
|
42,366
|
|
||
Proceeds from Note Purchase Agreement
|
—
|
|
|
42,924
|
|
||
Payment of other liability
|
(1,000
|
)
|
|
(507
|
)
|
||
Repayment of credit facility
|
(45,000
|
)
|
|
—
|
|
||
Repayment of Manchester Note payable
|
—
|
|
|
(31,283
|
)
|
||
Net cash provided by financing activities
|
100,538
|
|
|
95,853
|
|
||
|
|
|
|
||||
Net increase in cash
|
122,392
|
|
|
19,865
|
|
||
Cash, beginning of year
|
18,204
|
|
|
5,997
|
|
||
|
|
|
|
||||
Cash, end of period
|
$
|
140,596
|
|
|
$
|
25,862
|
|
|
|
|
|
||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
||
Cash paid for interest
|
$
|
4,994
|
|
|
$
|
3,114
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||
Accrued royalty in excess of minimum payable to the sellers of Thiola
®
|
$
|
2,237
|
|
|
$
|
—
|
|
Reclassification of derivative liability to equity due to exercise of warrants
|
$
|
23,100
|
|
|
$
|
23,365
|
|
Present value of contingent consideration payable to sellers of Manchester Pharmaceuticals LLC
|
$
|
—
|
|
|
$
|
12,238
|
|
Present value of guaranteed minimum royalty payable to sellers of Thiola
®
|
$
|
—
|
|
|
$
|
11,818
|
|
Note payable entered into upon consummation of Manchester Pharmaceuticals LLC
|
$
|
—
|
|
|
$
|
31,283
|
|
Present value of contingent consideration payable to sellers of Asklepion Pharmaceuticals LLC
|
$
|
42,010
|
|
|
$
|
—
|
|
Shares issued in connection with Cholbam
®
acquisition
|
$
|
15,844
|
|
|
$
|
—
|
|
Unrealized gain (loss) on marketable securities
|
$
|
(4,395
|
)
|
|
$
|
3,701
|
|
Unrealized loss on securities sold, not yet purchased
|
$
|
—
|
|
|
$
|
34
|
|
•
|
Chenodal
®
(chenodeoxycholic acid) is approved in the United States for the treatment of patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age. Chenodal
®
has been the standard of care for cerebrotendinous xanthomatosis (“CTX”) patients for more than three decades and the Company is currently pursuing adding this indication to the label.
|
•
|
Thiola
®
(tiopronin) is approved in the United States for the prevention of cysteine (kidney) stone formation in patients with cystinuria.
|
•
|
Cholbam
®
(cholic acid) is approved in the United States for the treatment of bile acid synthesis disorders due to single enzyme defects and is further indicated for adjunctive treatment of patients with peroxisomal disorders.
|
|
|
||
Cash paid upon consummation
|
$
|
33,430
|
|
Present value of contingent consideration and service fees
|
42,010
|
|
|
Fair Value of 661,279 shares issued to Asklepion
|
15,844
|
|
|
Total Purchase Price
|
$
|
91,284
|
|
|
|
|
|
Fair Value of Assets Acquired and Liabilities Assumed
|
|
|
|
Acquired product rights-Cholbam
®
(Intangible Asset)
|
$
|
83,200
|
|
Pediatric Priority Review Voucher
|
96,250
|
|
|
Inventory
|
777
|
|
|
Deferred tax liability
|
(39,880
|
)
|
|
Total Allocation of Purchase Price
|
$
|
140,347
|
|
Bargain Purchase Gain
|
(49,063
|
)
|
|
Total Purchase Price
|
$
|
91,284
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Marketable Equity Securities:
|
|
|
|
||||
Common Stock
|
$
|
—
|
|
|
$
|
9,556
|
|
Marketable Other than Equity Securities:
|
|
|
|
||||
Commercial paper
|
11,930
|
|
|
—
|
|
||
Corporate debt securities
|
72,746
|
|
|
—
|
|
||
Securities of government sponsored entities
|
10,005
|
|
|
—
|
|
||
Total Marketable Securities:
|
$
|
94,681
|
|
|
$
|
9,556
|
|
|
Contractual Maturity (in years)
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Aggregate Estimated Fair Value
|
||||||||
Marketable Other than Equity Securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
Less than 1
|
|
$
|
11,935
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
11,930
|
|
Corporate debt securities
|
Less than 1
|
|
34,123
|
|
|
1
|
|
|
(42
|
)
|
|
34,082
|
|
||||
Securities of government-sponsored entities
|
Less than 1
|
|
5,003
|
|
|
—
|
|
|
—
|
|
|
5,003
|
|
||||
Total maturity less than 1 year
|
|
|
51,061
|
|
|
1
|
|
|
(47
|
)
|
|
51,015
|
|
||||
Corporate debt securities
|
1 to 2
|
|
38,732
|
|
|
17
|
|
|
(85
|
)
|
|
38,664
|
|
||||
Securities of government-sponsored entities
|
1 to 2
|
|
5,000
|
|
|
2
|
|
|
—
|
|
|
5,002
|
|
||||
Total maturity 1 to 2 years
|
|
|
43,732
|
|
|
19
|
|
|
(85
|
)
|
|
43,666
|
|
||||
Total available-for-sale securities
|
|
|
$
|
94,793
|
|
|
$
|
20
|
|
|
$
|
(132
|
)
|
|
$
|
94,681
|
|
|
Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Marketable Equity Securities:
|
|
|
|
|
|
|
|
||||||||
Common Stock
|
$
|
5,160
|
|
|
$
|
4,499
|
|
|
$
|
(103
|
)
|
|
$
|
9,556
|
|
Total available-for-sale securities
|
$
|
5,160
|
|
|
$
|
4,499
|
|
|
$
|
(103
|
)
|
|
$
|
9,556
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Estimated Fair Value
|
|
Unrealized Losses
|
|
Estimated Fair Value
|
|
Unrealized Losses
|
|
Estimated Fair Value
|
|
Unrealized Losses
|
||||||||||||
September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial paper
|
$
|
11,930
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,930
|
|
|
$
|
(5
|
)
|
Corporate debt securities
|
62,492
|
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
62,492
|
|
|
(127
|
)
|
||||||
Securities of government-sponsored entities
|
3,002
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,002
|
|
|
—
|
|
||||||
Total
|
$
|
77,424
|
|
|
$
|
(132
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77,424
|
|
|
$
|
(132
|
)
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Fair value of common stock
|
$
|
20.26
|
|
|
$
|
12.24
|
|
Expected life (in years), represents the weighted average period until next liquidity event
|
n/a**
|
|
|
0.33
|
|
||
Remaining life of the warrants (in years)
|
2.4 - 4.3
|
|
|
3.1 - 4.9
|
|
||
Risk-free interest rate
|
.75% – 1.21%
|
|
|
1.13-1.69%
|
|
||
Expected volatility
|
75-85%
|
|
|
85
|
%
|
||
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
As of September 30, 2015
|
|
Fair Value Hierarchy at September 30, 2015
|
||||||||||||
|
Total carrying and estimated fair value
|
|
Quoted prices in active markets (Level 1)
|
|
Significant other observable inputs (Level 2)
|
|
Significant unobservable inputs (Level 3)
|
||||||||
Asset:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketable securities, available-for-sale
|
$
|
94,681
|
|
|
$
|
—
|
|
|
$
|
94,681
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative liability related to warrants
|
$
|
42,120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42,120
|
|
Contingent consideration
|
$
|
53,720
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53,720
|
|
|
As of December 31, 2014
|
|
Fair Value Hierarchy at December 31, 2014
|
||||||||||||
|
Total carrying and estimated fair value
|
|
Quoted prices in active markets (Level 1)
|
|
Significant other observable inputs (Level 2)
|
|
Significant unobservable inputs (Level 3)
|
||||||||
Asset:
|
|
|
|
|
|
|
|
||||||||
Marketable securities, available-for-sale
|
$
|
9,556
|
|
|
$
|
9,556
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liability related to warrants
|
$
|
27,990
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,990
|
|
Acquisition-related contingent consideration
|
$
|
11,637
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,637
|
|
|
Fair Value Measurements of Common Stock Warrants Using Significant Unobservable Inputs (Level 3)
|
||
Balance at January 1, 2015
|
$
|
27,990
|
|
Reclassification of derivative liability to equity upon exercise of warrants
|
(23,100
|
)
|
|
Issuance of Warrants
|
1,050
|
|
|
Change in estimated fair value of liability classified warrants
|
36,180
|
|
|
Balance at September 30, 2015
|
$
|
42,120
|
|
|
Fair Value Measurements
of Acquisition-Related Contingent Consideration (Level 3) |
||
Balance at January 1, 2015
|
$
|
11,637
|
|
Present value of contingent consideration of Cholbam
®
, upon acquisition
|
39,107
|
|
|
Increase from revaluation of contingent consideration
|
7,026
|
|
|
Decrease of contingent consideration, asset divestiture
|
(604
|
)
|
|
Contractual Payments
|
(2,498
|
)
|
|
Contractual Payments Accrued at September 30, 2015
|
(948
|
)
|
|
Balance at September 30, 2015
|
$
|
53,720
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Finite-lived intangibles Assets
|
$
|
176,749
|
|
|
$
|
99,867
|
|
Less: Accumulated amortization
|
(13,752
|
)
|
|
(5,602
|
)
|
||
Net carrying value
|
$
|
162,997
|
|
|
$
|
94,265
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Research and development
|
$
|
200
|
|
|
$
|
261
|
|
|
$
|
614
|
|
|
$
|
566
|
|
Selling, general and administrative
|
3,675
|
|
|
1,554
|
|
|
8,803
|
|
|
2,901
|
|
||||
Total amortization expense
|
$
|
3,875
|
|
|
$
|
1,815
|
|
|
$
|
9,417
|
|
|
$
|
3,467
|
|
2015
|
$
|
—
|
|
2016
|
—
|
|
|
2017
|
—
|
|
|
2018
|
—
|
|
|
2019
|
46,000
|
|
|
Thereafter
|
—
|
|
|
|
$
|
46,000
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||
Government rebates payable
|
$
|
5,226
|
|
|
$
|
1,353
|
|
Compensation related costs
|
5,094
|
|
|
8,163
|
|
||
Accrued royalties
|
4,249
|
|
|
—
|
|
||
Research and development
|
2,222
|
|
|
3,720
|
|
||
Selling, general and administrative
|
1,807
|
|
|
2,411
|
|
||
Severance related costs
|
1,548
|
|
|
5,710
|
|
||
Accounting and legal fees
|
1,186
|
|
|
1,208
|
|
||
Interest
|
799
|
|
|
2,318
|
|
||
Miscellaneous accrued
|
187
|
|
|
—
|
|
||
License fee
|
—
|
|
|
3,000
|
|
||
|
$
|
22,318
|
|
|
$
|
27,883
|
|
|
Three Months Ended
|
||||||||||||||||||||
|
September 30, 2015
|
|
September 30, 2014
|
||||||||||||||||||
|
Shares
|
|
Net Income
|
|
EPS
|
|
Shares
|
|
Net Income
|
|
EPS
|
||||||||||
Basic Earnings per Share
|
35,741,877
|
|
|
$
|
105,578
|
|
|
$
|
2.95
|
|
|
26,682,510
|
|
|
$
|
(17,980
|
)
|
|
$
|
(0.67
|
)
|
Dilutive shares related to warrants
|
—
|
|
|
(29,991
|
)
|
|
—
|
|
|
—
|
|
|
(5,689
|
)
|
|
—
|
|
||||
Change in fair value of derivative instruments
|
2,053,934
|
|
|
—
|
|
|
—
|
|
|
1,527,715
|
|
|
—
|
|
|
—
|
|
||||
Convertible Debt
|
2,642,160
|
|
|
518
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Restricted Stock
|
409,166
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Stock Options
|
1,905,722
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|||||
Dilutive Earnings per Share
|
42,752,859
|
|
|
$
|
76,105
|
|
|
$
|
1.78
|
|
|
28,210,225
|
|
|
$
|
(23,669
|
)
|
|
$
|
(0.84
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30, 2015
|
|
September 30, 2014
|
|
September 30, 2015
|
|
September 30, 2014
|
||||
Restricted Stock
|
26,033
|
|
|
438,416
|
|
|
41,132
|
|
|
467,162
|
|
Convertible Debt
|
—
|
|
|
2,642,160
|
|
|
—
|
|
|
3,106,345
|
|
Options
|
1,762,891
|
|
|
2,852,500
|
|
|
1,083,093
|
|
|
2,852,500
|
|
Warrants
|
—
|
|
|
337,500
|
|
|
2,691,589
|
|
|
337,500
|
|
Total Anti-Dilutive Shares
|
1,788,924
|
|
|
6,270,576
|
|
|
3,815,814
|
|
|
6,763,507
|
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Operating Leases
|
$
|
1,851
|
|
|
$
|
797
|
|
|
$
|
1,054
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other commitments
|
4,524
|
|
|
1,029
|
|
|
1,133
|
|
|
870
|
|
|
1,492
|
|
|||||
|
$
|
6,375
|
|
|
$
|
1,826
|
|
|
$
|
2,187
|
|
|
$
|
870
|
|
|
$
|
1,492
|
|
|
Number of
Restricted Stock Units
|
|
Weighted
Average
Grant Date Fair
Value
|
|||
Outstanding December 31, 2014
|
691,668
|
|
|
$
|
10.83
|
|
Granted
|
253,000
|
|
|
|
||
Vested
|
(159,666
|
)
|
|
|
||
Forfeited/canceled
|
(66,668
|
)
|
|
|
||
Outstanding September 30, 2015
|
718,334
|
|
|
$
|
16.89
|
|
|
Shares
Underlying
Options
|
|
Weighted
Average
Exercise
Price
|
|||
Outstanding at December 31, 2014
|
4,892,208
|
|
|
$
|
10.93
|
|
Granted
|
2,095,000
|
|
|
|
||
Exercised
|
(401,740
|
)
|
|
|
||
Forfeited/canceled
|
(842,875
|
)
|
|
|
||
Outstanding at September 30, 2015
|
5,742,593
|
|
|
$
|
16.86
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Research and Development
|
$
|
2,692
|
|
|
$
|
1,039
|
|
|
$
|
6,660
|
|
|
$
|
1,997
|
|
Selling, General &Administrative
|
5,489
|
|
|
2,075
|
|
|
12,088
|
|
|
4,877
|
|
||||
Selling, General &Administrative - Consultants
|
—
|
|
|
90
|
|
|
—
|
|
|
2,363
|
|
||||
Total
|
$
|
8,181
|
|
|
$
|
3,204
|
|
|
$
|
18,748
|
|
|
$
|
9,237
|
|
•
|
Chenodal
®
(chenodeoxycholic acid) is approved in the United States for the treatment of patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age. Chenodal
®
has been the standard of care for cerebrotendinous xanthomatosis (“CTX”) patients for more than three decades and the Company is currently pursuing adding this indication to the label.
|
•
|
Thiola
®
(tiopronin) is approved in the United States for the prevention of cysteine (kidney) stone formation in patients with severe homozygous cystinuria.
|
•
|
Cholbam
®
(cholic acid) is approved in the United States for the treatment of bile acid synthesis disorders due to single enzyme defects and is further indicated for adjunctive treatment of patients with peroxisomal disorders.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Increase
|
|
2015
|
|
2014
|
|
Increase
|
||||||||||||
Net product sales
|
$
|
28,005
|
|
|
$
|
8,349
|
|
|
$
|
19,656
|
|
|
$
|
69,444
|
|
|
$
|
14,118
|
|
|
$
|
55,326
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Increase
|
|
2015
|
|
2014
|
|
Increase
|
||||||||||||
Cost of goods sold
|
$
|
513
|
|
|
$
|
198
|
|
|
$
|
315
|
|
|
$
|
1,424
|
|
|
$
|
233
|
|
|
$
|
1,191
|
|
Research and development
|
14,064
|
|
|
12,646
|
|
|
1,418
|
|
|
34,974
|
|
|
32,899
|
|
|
2,075
|
|
||||||
Selling, general and administrative
|
22,308
|
|
|
17,372
|
|
|
4,936
|
|
|
56,856
|
|
|
42,097
|
|
|
14,759
|
|
||||||
Change in valuation of contingent consideration
|
6,906
|
|
|
—
|
|
|
6,906
|
|
|
7,026
|
|
|
—
|
|
|
7,026
|
|
||||||
Impairment of intangible assets
|
4,710
|
|
|
—
|
|
|
4,710
|
|
|
4,710
|
|
|
—
|
|
|
4,710
|
|
||||||
|
$
|
48,501
|
|
|
$
|
30,216
|
|
|
$
|
18,285
|
|
|
$
|
104,990
|
|
|
$
|
75,229
|
|
|
$
|
29,761
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Variance
|
|
2015
|
|
2014
|
|
Variance
|
||||||||||||
Litigation settlement
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,500
|
|
|
$
|
—
|
|
|
$
|
15,500
|
|
Other income (expense), net
|
(314
|
)
|
|
170
|
|
|
(484
|
)
|
|
35
|
|
|
545
|
|
|
(510
|
)
|
||||||
Interest expense, net
|
(695
|
)
|
|
(2,629
|
)
|
|
1,934
|
|
|
(7,415
|
)
|
|
(4,808
|
)
|
|
(2,607
|
)
|
||||||
Early payment penalty
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,250
|
)
|
|
—
|
|
|
(2,250
|
)
|
||||||
Loss on extinguishment of debt
|
(4,151
|
)
|
|
—
|
|
|
(4,151
|
)
|
|
(4,151
|
)
|
|
—
|
|
|
(4,151
|
)
|
||||||
Finance expense
|
—
|
|
|
(13
|
)
|
|
13
|
|
|
(600
|
)
|
|
(4,721
|
)
|
|
4,121
|
|
||||||
Change in fair value of derivative instruments-gain (loss)
|
29,991
|
|
|
6,359
|
|
|
23,632
|
|
|
(36,180
|
)
|
|
(14,276
|
)
|
|
(21,904
|
)
|
||||||
Gain on disposal of assets
|
140,004
|
|
|
—
|
|
|
140,004
|
|
|
140,004
|
|
|
—
|
|
|
140,004
|
|
||||||
Bargain purchase gain
|
—
|
|
|
—
|
|
|
—
|
|
|
49,063
|
|
|
—
|
|
|
49,063
|
|
||||||
|
$
|
164,835
|
|
|
$
|
3,887
|
|
|
|
|
|
$
|
154,006
|
|
|
$
|
(23,260
|
)
|
|
|
|
•
|
We have implemented a new accounting system which allows for us to generate data in a form and format that facilitates the timely analysis of information needed to produce accurate financial reports.
|
•
|
We have hired additional staff with expertise in applying complex accounting and financial reporting and disclosure rules required under GAAP and SEC reporting regulations.
|
•
|
We have hired additional staff to assist in segregating duties.
|
•
|
Effective October 2014, Gary A. Lyons and Jeffrey Meckler were appointed as independent members of the Board of Directors.
|
•
|
On November 1, 2014, Margaret Valeur-Jensen, Ph.D. became our General Counsel. Ms. Valeur-Jensen has more than 25 years of experience working with public pharmaceutical and biotechnology companies.
|
•
|
On November 10, 2014, Stephen Aselage became our Chief Executive Officer. Mr. Aselage has more than 30 years of pharmaceutical and biotechnology experience.
|
•
|
On November 17, 2014, Laura Clague became our Chief Financial Officer. Mrs. Clague has more than 30 years of experience in accounting and finance, and pharmaceutical and biotechnology experience.
|
•
|
On February 3, 2015, the Company held a Special Meeting of Stockholders at which the Company’s stockholders voted to approve a proposal ratifying the prior issuance of stock options to purchase 1,928,000 shares of common stock and 230,000 restricted shares of common stock granted to employees between February 24, 2014 and August 18, 2014. In fiscal 2015, the Company instituted controls over the granting and tracking of stock options.
|
•
|
Effective March 31, 2015, Timothy Coughlin was appointed as an independent member of the Board of Directors.
|
•
|
Effective April 1, 2015, Dr. John W. Kozarich was appointed as an independent member of the Board of Directors.
|
•
|
Effective June 8, 2015, Jeffrey A. Meckler was appointed as the Chairman of the Board of Directors.
|
•
|
lower demonstrated efficacy, safety and/or tolerability compared to other drugs;
|
•
|
prevalence and severity of adverse side-effects;
|
•
|
lack of cost-effectiveness;
|
•
|
lack of coverage and adequate reimbursement availability from third-party payers;
|
•
|
a decision to wait for the approval of other therapies in development that have significant perceived advantages over our drug;
|
•
|
convenience and ease of administration;
|
•
|
other potential advantages of alternative treatment methods; and
|
•
|
ineffective marketing and/or distribution support.
|
•
|
our preclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical testing or clinical trials or we may abandon projects that we expect to be promising;
|
•
|
regulators may require us to conduct studies of the long-term effects associated with the use of our product candidates;
|
•
|
regulators or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site;
|
•
|
the FDA or any non-United States regulatory authority may impose conditions on us regarding the scope or design of our clinical trials or may require us to resubmit our clinical trial protocols to institutional review boards for re-inspection due to changes in the regulatory environment;
|
•
|
the number of patients required for our clinical trials may be larger than we anticipate or participants may drop out of our clinical trials at a higher rate than we anticipate;
|
•
|
our third-party contractors or clinical investigators may fail to comply with regulatory requirements or fail to meet their contractual obligations to us in a timely manner;
|
•
|
we might have to suspend or terminate one or more of our clinical trials if we, regulators or institutional review boards determine that the participants are being exposed to unacceptable health risks;
|
•
|
regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;
|
•
|
the cost of our clinical trials may be greater than we anticipate;
|
•
|
the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate or we may not be able to reach agreements on acceptable terms with prospective clinical research organizations; and
|
•
|
the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.
|
•
|
be delayed in obtaining, or may not be able to obtain, marketing approval for one or more of our product candidates;
|
•
|
obtain approval for indications that are not as broad as intended or entirely different than those indications for which we sought approval; and
|
•
|
have the product removed from the market after obtaining marketing approval.
|
•
|
obtaining supplies of sparsentan, RE-024 and RE-034 and subsequent product candidates for completion of our clinical trials on a timely basis;
|
•
|
successful completion of pre-clinical and clinical studies;
|
•
|
obtaining marketing approvals from the FDA and similar regulatory authorities outside the United States;
|
•
|
establishing commercial-scale manufacturing arrangements with third-party manufacturers whose manufacturing facilities are operated in compliance with cGMP regulations;
|
•
|
launching commercial sales of the product, whether alone or in collaboration with others;
|
•
|
acceptance of the product by patients, the medical community and third-party payers;
|
•
|
competition from other companies;
|
•
|
successful protection of our intellectual property rights from competing products in the United States and abroad; and
|
•
|
a continued acceptable safety and efficacy profile of our product candidates following approval.
|
•
|
regulatory authorities may require the addition of restrictive labeling statements;
|
•
|
regulatory authorities may withdraw their approval of the product; and
|
•
|
we may be required to change the way the product is administered or conduct additional clinical trials.
|
•
|
the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling;
|
•
|
the efficacy and potential advantages over alternative treatments;
|
•
|
the pricing of our product candidates;
|
•
|
relative convenience and ease of administration;
|
•
|
the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
|
•
|
the strength of marketing and distribution support and timing of market introduction of competitive products;
|
•
|
publicity concerning our products or competing products and treatments; and
|
•
|
sufficient third-party insurance coverage or reimbursement.
|
•
|
we or our licensors were the first to make the inventions covered by each of our pending patent applications;
|
•
|
we or our licensors were the first to file patent applications for these inventions;
|
•
|
others will not independently develop similar or alternative technologies or duplicate any of our technologies;
|
•
|
any patents issued to us or our licensors that provide a basis for commercially viable products will provide us with any competitive advantages or will not be challenged by third parties;
|
•
|
we will develop additional proprietary technologies that are patentable;
|
•
|
we will file patent applications for new proprietary technologies promptly or at all;
|
•
|
the claims we make in our patents will be upheld by patent offices in the United States and elsewhere;
|
•
|
our patents will not expire prior to or shortly after commencing commercialization of a product; and
|
•
|
the patents of others will not have a negative effect on our ability to do business.
|
•
|
reliance on the third party for regulatory compliance and quality assurance;
|
•
|
limitations on supply availability resulting from capacity and scheduling constraints of the third parties;
|
•
|
impact on our reputation in the marketplace if manufacturers of our products fail to meet the demands of our customers;
|
•
|
the possible breach of the manufacturing agreement by the third party because of factors beyond our control; and
|
•
|
the possible termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.
|
•
|
restrictions on such products, manufacturers or manufacturing processes;
|
•
|
warning letters;
|
•
|
withdrawal of the products from the market;
|
•
|
our ability to obtain and maintain marketing approvals from the FDA or similar regulatory authorities outside the United States;
|
•
|
refusal to approve pending applications or supplements to approved applications that we submit;
|
•
|
voluntary or mandatory recall;
|
•
|
fines;
|
•
|
suspension or withdrawal of regulatory approvals or refusal to approve pending applications or supplements to approved applications that we submit;
|
•
|
refusal to permit the import or export of our products;
|
•
|
product seizure or detentions;
|
•
|
injunctions or the imposition of civil or criminal penalties; and
|
•
|
adverse publicity.
|
•
|
a covered benefit under its health plan;
|
•
|
safe, effective and medically necessary;
|
•
|
appropriate for the specific patient;
|
•
|
cost-effective; and
|
•
|
neither experimental nor investigational.
|
•
|
our inability to recruit and retain adequate numbers of effective sales and marketing personnel;
|
•
|
the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our products;
|
•
|
the lack of complementary products to be offered by our sales personnel, which may put us at a competitive disadvantage against companies with broader product lines;
|
•
|
unforeseen costs associated with expanding our own sales and marketing team for new products or with entering into a partnering agreement with an independent sales and marketing organization; and
|
•
|
efforts by our competitors to commercialize competitive products.
|
•
|
complete enrollment in the Phase 2 DUET trial of sparsentan for the treatment of FSGS;
|
•
|
continue our ongoing clinical development of RE-024 for the treatment of PKAN;
|
•
|
continue our ongoing clinical development of RE-034;
|
•
|
continue the research and development of additional product candidates;
|
•
|
expand our sales and marketing infrastructure to commercialize Cholbam
®
and any new products for which we may obtain regulatory approval; and
|
•
|
expand operational, financial, and management information systems and personnel, including personnel to support product development efforts and our obligations as a public company.
|
•
|
the progress and results of our pre-clinical and clinical studies of sparsentan, RE-024 and RE-034 and other drug candidates;
|
•
|
the costs, timing and outcome of regulatory review of our product candidates;
|
•
|
the number and development requirements of other product candidates that we pursue;
|
•
|
the costs of commercialization activities, including product marketing, sales and distribution;
|
•
|
the emergence of competing technologies and other adverse market developments;
|
•
|
the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property related claims;
|
•
|
the extent to which we acquire or invest in businesses, products and technologies; and
|
•
|
our ability to establish collaborations and obtain milestone, royalty or other payments from any such collaborators.
|
•
|
results of clinical trials of our product candidates or those of our competitors;
|
•
|
our entry into or the loss of a significant collaboration;
|
•
|
regulatory or legal developments in the United States and other countries, including changes in the health care payment systems;
|
•
|
our ability to obtain and maintain marketing approvals from the FDA or similar regulatory authorities outside the United States;
|
•
|
variations in our financial results or those of companies that are perceived to be similar to us;
|
•
|
changes in the structure of healthcare payment systems;
|
•
|
market conditions in the pharmaceutical and biotechnology sectors and issuance of new or changed securities analysts’ reports or recommendations;
|
•
|
general economic, industry and market conditions;
|
•
|
results of clinical trials conducted by others on drugs that would compete with our product candidates;
|
•
|
developments or disputes concerning patents or other proprietary rights;
|
•
|
public concern over our product candidates or any products approved in the future;
|
•
|
litigation;
|
•
|
future sales or anticipated sales of our common stock by us or our stockholders; and
|
•
|
the other factors described in this “Risk Factors” section.
|
•
|
integrating personnel, operations and systems, while maintaining focus on producing and delivering consistent, high quality products;
|
•
|
coordinating geographically dispersed organizations;
|
•
|
distracting employees from operations;
|
•
|
retaining existing customers and attracting new customers; and
|
•
|
managing inefficiencies associated with integrating the operations of the Company.
|
•
|
decreased demand for any product candidates or products that we may develop;
|
•
|
damage to our reputation;
|
•
|
regulatory investigations that could require costly recalls or product modifications;
|
•
|
withdrawal of clinical trial participants;
|
•
|
costs to defend the related litigation;
|
•
|
substantial monetary awards to trial participants or patients, including awards that substantially exceed our product liability insurance, which we would then be required to pay from other sources, if available, and would damage our ability to obtain liability insurance at reasonable costs, or at all, in the future;
|
•
|
loss of revenue;
|
•
|
the diversion of management’s attention from managing our business; and
|
•
|
the inability to commercialize any products that we may develop.
|
•
|
our failure to demonstrate to the satisfaction of the FDA or comparable regulatory authorities that a product candidate is safe and effective for a particular indication;
|
•
|
the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable regulatory authorities for approval;
|
•
|
our inability to demonstrate that a product candidate’s benefits outweigh its risks;
|
•
|
our inability to demonstrate that the product candidate presents an advantage over existing therapies;
|
•
|
the FDA’s or comparable regulatory authorities’ disagreement with the manner in which we interpret the data from preclinical studies or clinical trials;
|
•
|
failure of the third-party manufacturers with which we contract for clinical or commercial supplies to satisfactorily complete an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s cGMP regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and
|
•
|
a change in the approval policies or regulations of the FDA or comparable regulatory authorities or a change in the laws governing the approval process.
|
•
|
make it more difficult for us to satisfy our obligations with respect to any other debt we may incur in the future;
|
•
|
increase our vulnerability to general adverse economic and industry conditions;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness and related interest, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
•
|
increase our cost of borrowing;
|
•
|
place us at a competitive disadvantage compared to our competitors that may have less debt; and
|
•
|
limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes.
|
•
|
failure to pay (for more than 30 days) interest when due;
|
•
|
failure to pay principal when due;
|
•
|
failure to deliver shares of Common Stock upon conversion of a Note;
|
•
|
failure to provide notice of a fundamental change;
|
•
|
acceleration on other indebtedness of the Company in excess of $10 million (other than indebtedness that is non-recourse to the Company); or
|
•
|
certain types of bankruptcy or insolvency involving the Company.
|
3.1
|
Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Company’s General Form for Registration of Securities on Form 10-12G, filed with the SEC on October 28, 2010).
|
3.2
|
Certificate of Amendment of Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 11, 2015).
|
3.3
|
Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 11, 2015).
|
4.1
|
Form of Warrant Certificate, dated June 30, 2014, issued to the Lenders under the Credit Agreement (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 7, 2014).
|
4.2
|
Form of Warrant issued to the purchasers in the private placement of 3,045,929 shares of common stock, dated February 14, 2013 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 19, 2013).
|
4.3
|
Form of Common Stock Purchase Warrant, dated August 15, 2013, issued to the purchasers of securities in the private placement of the Company closed on August 15, 2013 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 20, 2013).
|
4.4
|
Form of Note Purchase Agreement for principal senior convertible notes with an interest rate of 4.50% due 2019 (“2019 Notes”), dated May 29, 2014, by and among the Company and the investors identified therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 4, 2014).
|
4.5
|
Form of Indenture for 2019 Notes, dated May 30, 2014 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 4, 2014).
|
4.6
|
Form of Note for 2019 Notes, dated May 30, 2014 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on May 29, 2014).
|
4.7
|
Form of Indenture for Senior Debt Securities (incorporated by reference to Exhibit 4.10 to the Company’s Registration Statement on Form S-8, filed with the SEC on September 9, 2014).
|
4.8
|
Form of Indenture for Subordinated Debt Securities (incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement on Form S-8, filed with the SEC on September 9, 2014).
|
10.1
|
Amendment No. 4 to Sublicense Agreement dated as of September 17, 2015, between Retrophin Inc. adn Ligand Pharmaceuticals Incorporated**
|
10.2
|
Addendum to Trademark License and Supply Agreement, dated October 19, 2015, by and between to Company and Mission Pharmacal
|
10.3
|
2015 Retrophin Inc. Executive/Designated Officer Annual Bonus Plan (incorporated by by reference to Exhibit 99.1 to the Company's current report in Form 8-K filed with the SEC on July 29, 2015)
|
31.1
|
Chief Executive Officer's Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
|
31.2
|
Chief Financial Officer's Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
|
32.1
|
Chief Executive Officer’s Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002 *
|
32.2
|
Chief Financial Officer’s Certification pursuant to Section 906 of the Sarbanes Oxley Act of 2002 *
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
**
|
Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted parties have filed separately with the SEC.
|
Date: November 6, 2015
|
RETROPHIN, INC.
|
||
|
|
|
|
|
By:
|
/s/ Stephen Aselage
|
|
|
|
Name:
|
Stephen Aselage
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
By:
|
/s/ Laura Clague
|
|
|
|
Name:
|
Laura Clague
|
|
|
Title:
|
Chief Financial Officer
|
a)
|
Development Milestone Payments.
Table 1 of Section 8.2.1 of the Agreement is hereby amended in its entirety as follows:
|
|
[…***…]
-1
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…**…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
[…***…]
|
b)
|
Section 8.10 of the Sublicense Agreement is hereby deleted in its entirety.
|
i.
|
Section 13.4 (b) of the Upstream Agreement amended to read as set forth below:
|
ii.
|
Section 13.4(f) amended as set forth below:
|
iii.
|
Section 13.4(i) deleted.
|
5.
|
Amendments to Sublicense Agreement.
|
a)
|
For the avoidance of doubt, none of the following amendments to the Sublicense Agreement are intended to cause a breach of the Upstream Agreement and any amendment that would otherwise cause such a breach shall be null and void ab initio.
|
b)
|
Section 1 of the Sublicense Agreement is hereby amended to include the following:
|
c)
|
Section 2.2.2 (vi) is hereby revised as set forth below:
|
d)
|
Section 3.2 of the Sublicense Agreement is hereby amended to include the following:
|
e)
|
Section 13.1.1 is hereby amended to add at the beginning of the first sentence “Subject to Section 13.7…”
|
f)
|
Section 13.2.6 is hereby deleted.
|
g)
|
Section 13.3 is hereby amended to add prior to the first sentence:
|
h)
|
The following amendments will be effective (i) as between Ligand and Retrophin at a time when there is no breach claimed by BMS under the Upstream Agreement, and/or (ii) at any time upon BMS’s agreement to amend or waive the applicable sections of the termination provisions in the Upstream Agreement;
|
a.
|
Section 13.4(b) is hereby amended as set forth below:
|
b.
|
Section 13.4(f) amended as set forth below:
|
c.
|
Section 13.4(i) deleted.
|
a)
|
Ligand further agrees that it will not, by act or omission, cause the termination of the Upstream Agreement provided however Ligand may terminate the Upstream Agreement for good cause with Retrophin’s prior written consent, not to be unreasonably withheld. Upon receipt by Ligand of any notice of default or any event that could likely lead to termination of the Upstream Agreement, Ligand will promptly notify Retrophin and work with Retrophin to effect cure of the default or concession with BMS.
|
b)
|
To the extent BMS shall not agree to the amendments proposed in Section 4 above, Ligand will, to the extent it does not cause a default under the Upstream Agreement, work with Retrophin in good faith and without further consideration and without refund of payments made hereunder to achieve the objectives contemplated by this Amendment by making further efforts to seek agreement from BMS.
|
8.
|
Governing Law.
This Amendment shall be governed by, enforced, and shall be construed in accordance with the laws of the State of New York without regard to its conflicts of law provisions
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9.
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Counterparts.
This Amendment may be executed in counter-parts with the same effect as if both Parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Retrophin, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) 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(s) 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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Date: November 6, 2015
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/s/ Stephen Aselage
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Stephen Aselage
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Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Retrophin, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) 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(s) 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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Date: November 6, 2015
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/s/ Laura Clague
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Laura Clague
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Chief Financial Officer
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(Principle Financial Officer)
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Date: November 6, 2015
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/s/ Stephen Aselage
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Stephen Aselage
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Chief Executive Officer
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(Principal Executive Officer)
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Date: November 6, 2015
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/s/ Laura Clague
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Laura Clague
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Chief Financial Officer
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(Principal Financial Officer)
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