EX-99.1 2 asrt4q2018earningsreleasee.htm EXHIBIT 99.1 Exhibit

Exhibit 99.1
 image0a01.jpg
Assertio Therapeutics Announces Fourth-Quarter and Full-Year 2018 Financial Results

-- Reports Neurology Franchise Annual Net Sales of $110.3 million, at the High End of Guidance Range --

-- Files NDA for Long-acting Cosyntropin and Receives FDA Notification of Acceptance --

-- Issues Full-Year 2019 Guidance for Earnings and Neurology Franchise Net Sales --

Lake Forest, Ill., March 6, 2019 - Assertio Therapeutics, Inc. (NASDAQ: ASRT) today reported financial results for the fourth quarter and year ended December 31, 2018, and provided an update on its business performance and strategic initiatives.

Financial Highlights:
(unaudited)
 
Fourth-Quarter 2018
Full-Year 2018
(in millions, except earnings per share)
GAAP
Non-GAAP (3)
GAAP
Non-GAAP (3)
Total Revenues (1) (2)
42.6
62.8
311.8
278.0
Net Income/(Loss)
(24.1)
23.1
36.9
93.2
Earnings/(Loss) Per Share
$(0.38)
$0.30
$0.57
$1.22
Adjusted EBITDA
41.0
155.3
(1) Fourth-quarter 2018 includes a $21.3 million adjustment reversal for the non-cash value assigned to inventory transferred to Collegium.
(2) Full-year 2018 includes a ($25.2) million adjustment reversal for the non-cash value assigned to inventory transferred to Collegium.
(3) All non-GAAP measures included in this earnings news release are reconciled to the corresponding GAAP measures in the schedules attached.

“Assertio’s 2018 financial performance met, or exceeded, our goals for the full year,” said Arthur Higgins, President and CEO of Assertio. “We delivered adjusted EBITDA at the high end of our current guidance range, and ahead of our original target, as well as neurology franchise sales at the high end of our current guidance range. In addition, we made significant progress throughout the year advancing our strategic, financial and operational goals, including the NDA filing of our long-acting cosyntropin. We look forward to another productive year ahead as we continue the transformation of Assertio into a biopharma company with sustainable growth and a promising pipeline."

Business Highlights:

FDA Accepted Filing of 505(b)(2) NDA Filing for Cosyntropin: On February 19, 2019, the Company received notification of acceptance for filing from the U.S. Food and Drug Administration for its 505(b)(2) New Drug Application for its injectable formulation of long-acting cosyntropin (synthetic adrenocorticotropic hormone, or ACTH). The Company, together with its partner West Therapeutic Development, LLC, seeks approval for the use of long-acting cosyntropin as a diagnostic drug in the screening of patients presumed to have adrenocortical insufficiency. The PDUFA date is October 19, 2019.

Strong Cash Generation and Debt Reduction: In 2018, the Company secured $97.0 million in non-dilutive cash through strategic transactions, of which approximately $65.0 million was received in 2018; the balance of $32 million was received on January 30, 2019. These cash inflows, as well as the Company’s own cash-flow generation, reduced total secured debt by $82.5 million from $365.0 million as of December 31, 2017 to $282.5 million as of December 31, 2018. As of December 31, 2018, the Company had cash and cash equivalents of $110.9 million.


1


Amended Senior Secured Credit Facility: On January 8, 2019, the Company amended its Senior Secured Credit Facility, replacing the previous fixed adjusted EBITDA covenant with a trailing 12-month debt-to-adjusted EBITDA ratio that declines over time. The amendment gives the Company greater flexibility to continue to pay down debt and invest in the core business, including potential business development transactions.

Strengthened NUCYNTA Collaboration with Collegium - Extends Minimum Term; Annual Royalty Payments Through 2021: On November 8, 2018, the Company announced an amendment to the Commercialization Agreement with Collegium Pharmaceutical, Inc. relating to the NUCYNTA® franchise. The amendment strengthens the collaboration and further aligns the parties’ mutual interest in growing the franchise. The amendment secures a minimum term of the Commercialization Agreement through at least December 31, 2021, prior to which Collegium may not terminate.

Completed Previously Announced Corporate Restructuring and HQ Relocation: In 2018, the Company completed its reincorporation from California to Delaware and changed its name from “Depomed, Inc.” to “Assertio Therapeutics, Inc.” In connection with the reincorporation and name change, the Company’s common stock began trading under a new ticker symbol “ASRT” and a new CUSIP number, 04545L 107, on August 15, 2018.

On August 15, 2018, the Company completed the relocation of its corporate headquarters from Newark, CA, to Lake Forest, IL. The relocation is consistent with the Company’s strategy to attract new pharmaceutical talent based in the Chicagoland area.

Additionally, the Company has sublet the entirety of its Newark facility.











2


Revenue Summary
(in thousands, unaudited)

 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
Product sales, net:
 

 
 

 
 

 
 

Gralise
$
14,805

 
$
20,208

 
$
58,077

 
$
77,034

CAMBIA
10,933

 
7,749

 
35,803

 
31,597

Zipsor
3,212

 
4,415

 
16,387

 
16,700

Total neurology product sales, net
28,950

 
32,372

 
110,267

 
125,331

 
 
 
 
 
 
 
 
Nucynta products (1)
162

 
60,018

 
18,944

 
239,539

Lazanda (2)
227

 
1,770

 
755

 
15,010

Total product sales, net
29,339

 
94,160

 
129,966

 
379,880

 
 
 
 
 
 
 
 
Commercialization agreement: (3)
 

 
 

 
 

 
 

Commercialization rights and facilitation services, net
12,983

 

 
100,038

 

Revenue from transfer of inventory

 

 
55,705

 

Royalties and milestone revenue
277

 
248

 
26,061

 
844

 
 
 
 
 
 
 
 
Total revenues
$
42,599

 
$
94,408

 
$
311,770

 
$
380,724


 
(1)
The Company transitioned the commercial rights to sell NUCYNTA to Collegium on January 9, 2018. NUCYNTA product sales for the three months ended December 31, 2018 relate to sales reserve estimate adjustments. NUCYNTA product sales for the twelve months ended December 31, 2018 reflect the Company's sales of NUCYNTA during a stub period between January 1st and January 8th, and also includes a $12.5 million benefit related to the release of sales reserves for which the Company is no longer financially responsible.
 
(2)
The Company divested Lazanda in November 2017. Product sales for the three and twelve months ended December 31, 2018 relate to sales reserve estimate adjustments.
 
(3)
The Commercialization Agreement revenues for the twelve months ended December 31, 2018 includes $100.0 million related to the commercialization rights and facilitation services provided to Collegium and $55.7 million related to the fair value of inventory transferred to Collegium. During the fourth quarter of 2018, the Company amended the Commercialization Agreement and agreed upon a variable revenue stream to take the place of the existing fixed revenue stream. As such, as of the date of the amendment, on November 8, 2018, the Company ceased recognition of fixed revenues and will begin recognition of variable revenues when they become due beginning in January 2019.  Cash collected during the fourth quarter remained in-line with the pre-modification agreement amount of $33.8 million.

 










3


2019 Financial Guidance
The Company is providing the following 2019 financial guidance:
 
2019 Guidance
Neurology Franchise Net Sales
Low-to Mid-Single Digit Growth
GAAP Net (Loss)/Income(1)
($71) to ($61) million
Non-GAAP Adjusted EBITDA(1)
$115 to $125 million
(1) Guidance includes: (a) $2.8 million of non-cash Collegium warrant-related income and excludes (b) any future
mark-to-market adjustments related to those warrants, which cannot be estimated at this time.

Conference Call and Webcast
Assertio will host a conference call today, Wednesday, March 6, 2019 beginning at 4:30 p.m. ET to discuss its results. This event can be accessed in three ways:

From the Assertio website: http://investor.assertiotx.com. Please access the website 15 minutes prior to the start of the call to download and install any necessary audio software.
By telephone: Participants can access the call by dialing (877) 550-3745 (United States) or (281) 973-6277 (International) referencing Conference ID 3784827.
By replay: A replay of the webcast will be located under the Investor Relations section of Assertio's website approximately two hours after the conclusion of the live call.

About Assertio Therapeutics, Inc.
Assertio Therapeutics is committed to providing responsible solutions to advance patient care in the Company’s core areas of neurology, orphan and specialty medicines. Assertio currently markets three FDA-approved products and continues to identify, license and develop new products that offer enhanced options for patients that may be under served by existing therapies. To learn more about Assertio, visit www.assertiotx.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995
The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties including, but not limited to, the commercialization of Gralise, CAMBIA, and Zipsor, royalties associated with Collegium’s commercialization of NUCYNTA and NUCYNTA ER, regulatory approval and clinical development of long-acting cosyntropin, loan agreements, including our senior secured debt facility, Assertio’s financial outlook for 2019 and expectations regarding financial results and potential business opportunities and other risks detailed in the Company’s Securities and Exchange Commission filings, including the Company’s most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q. The inclusion of forward-looking statements should not be regarded as a representation that any of the Company’s plans or objectives will be achieved. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Investor and Media Contact:
John B. Thomas
Senior Vice President, Investor Relations and Corporate Communications
jthomas@assertiotx.com


4


Non-GAAP Financial Measures
To supplement the Company’s financial results presented on a U.S. generally accepted accounting principles (GAAP) basis, the Company has included information about non-GAAP revenue, non-GAAP adjusted earnings, non-GAAP adjusted diluted earnings per share, non-GAAP adjusted EBITDA and other non-GAAP financial measures as useful operating metrics. The Company believes that the presentation of these non-GAAP financial measures, when viewed with results under GAAP and the accompanying reconciliation, provides supplementary information to analysts, investors, lenders, and the Company’s management in assessing the Company’s performance and results from period to period. The Company uses these non-GAAP measures internally to understand, manage and evaluate the Company’s performance, and in part, in the determination of bonuses for executive officers and employees. These non-GAAP financial measures should be considered in addition to, and not a substitute for, or superior to, net income or other financial measures calculated in accordance with GAAP. Non-GAAP financial measures used by us may be calculated differently from, and therefore may not be comparable to, non-GAAP measures used by other companies.

Specified Items
Non-GAAP measures presented within this release exclude specified items. The Company considers specified Items to be significant income/expense items not indicative of current operations, including the related tax effect. Specified items include non-cash adjustment to Collegium agreement revenue and cost of sales, release of NUCYNTA and Lazanda sales reserves for products the Company is no longer selling, interest income, interest expense, amortization, acquired in-process research and development and non-cash adjustments related to product acquisitions, stock-based compensation expense, non-cash interest expense related to debt, depreciation, taxes, transaction costs, CEO transition, restructuring costs, adjustments to net sales related to reserves recorded prior to the Company’s exit of opioid commercialization activities, legal costs and expenses incurred in connection with opioid-related litigation, investigations and regulations pertaining to the company’s historical commercialization of opioid products, certain types of legal settlements, disputes, fees and costs, and to adjust for the tax effect related to each of the non-GAAP adjustments.



5


CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
 
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2018
 
2017
 
2018
 
2017
 
(unaudited)
 
(unaudited)
Revenues:
 
 
 
 
 
 
 
Product sales, net
$
29,339

 
$
94,160

 
$
129,966

 
$
379,880

Commercialization agreement, net
12,983

 

 
155,743

 

Royalties and milestones
277

 
248

 
26,061

 
844

Total revenues
42,599

 
94,408

 
311,770

 
380,724

 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
Cost of sales (excluding amortization of intangible assets)
704

 
17,704

 
18,476

 
72,598

Research and development expenses
2,207

 
1,259

 
8,042

 
13,718

Acquired in-process research and development

 
24,900

 

 
24,900

Selling, general and administrative expenses
25,468

 
48,318

 
119,218

 
195,696

Amortization of intangible assets
25,443

 
25,541

 
101,774

 
102,745

Restructuring charges
1,859

 
9,372

 
20,601

 
13,247

Total costs and expenses
55,681

 
127,094

 
268,111

 
422,904

 
 
 
 
 
 
 
 
Income/(loss) from operations
(13,082
)
 
(32,685
)
 
43,659

 
(42,180
)
Litigation settlement

 

 
62,000

 

Gain on divestiture of Lazanda

 
17,064

 

 
17,064

Interest and other income
224

 
77

 
1,197

 
681

Loss on prepayment of Senior Notes

 
(573
)
 

 
(5,938
)
Interest expense
(16,613
)
 
(17,857
)
 
(68,881
)
 
(73,552
)
Income tax (expense) benefit
5,333

 
870

 
(1,067
)
 
1,429

Net income/(loss)
$
(24,138
)
 
$
(33,104
)
 
$
36,908

 
$
(102,496
)
 
 
 
 
 
 
 
 
Basic net (loss) income per share
$
(0.38
)
 
$
(0.52
)
 
$
0.58

 
$
(1.63
)
Diluted net income (loss) per share
$
(0.38
)
 
$
(0.52
)
 
$
0.57

 
$
(1.63
)
Basic shares used in calculation
64,004

 
63,137

 
63,794

 
62,702

Diluted shares used in calculation
64,004

 
63,137

 
64,208

 
62,702



6


CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)
 
 
December 31, 2018
 
December 31,
2017
 
 
 
 
Cash, cash equivalents and marketable securities
$
110,949

 
$
128,089

Accounts receivable, net
37,211

 
72,482

Inventories
3,396

 
13,042

Property and equipment, net
13,064

 
13,024

Intangible assets, net
692,099

 
793,873

Investments
11,784

 

Prepaid and other assets
64,363

 
18,107

Total assets
$
932,866

 
$
1,038,617

 
 
 
 
Accounts payable
$
6,138

 
$
14,732

Income tax payable

 
126

Interest payable
11,645

 
13,220

Accrued liabilities
31,361

 
60,496

Accrued rebates, returns and discounts
75,759

 
135,828

Senior notes
278,309

 
357,220

Convertible notes
287,798

 
269,510

Contingent consideration liability
1,038

 
1,613

Other liabilities
20,483

 
16,364

Shareholders’ equity
220,335

 
169,508

Total liabilities and shareholders’ equity
$
932,866

 
$
1,038,617



7

Exhibit 99.1

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA
(in thousands)
(unaudited)
 
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2018
 
2017
 
2018
 
2017
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
GAAP net income/(loss)
$
(24,138
)
 
$
(33,104
)
 
$
36,908

 
$
(102,496
)
Commercialization agreement revenues (1)
21,262

 

 
(25,164
)
 

Commercialization agreement cost of sales (2)

 

 
6,200

 

Nucynta sales reserve (3)

 

 
(10,711
)
 

Nucynta and Lazanda revenue reserves (4)
(1,024
)
 

 
(1,562
)
 

Expenses for opioid-related litigation, investigations and regulations (5)
3,537

 

 
7,897

 

Intangible amortization related to product acquisitions
25,443

 
25,541

 
101,774

 
102,745

Contingent consideration related to product acquisitions
143

 
(104
)
 
(515
)
 
(6,629
)
Stock-based compensation
2,549

 
3,095

 
10,439

 
12,965

Purdue litigation settlement

 

 
(62,000
)
 

Interest and other income
(224
)
 
(77
)
 
(1,197
)
 
(410
)
Interest expense
16,613

 
18,361

 
68,881

 
78,190

Depreciation
254

 
918

 
1,931

 
2,757

Provision for (benefit from) income taxes
(5,333
)
 
(870
)
 
1,067

 
(1,429
)
Restructuring and related costs (6)
1,881

 
9,817

 
21,264

 
16,834

Acquired in process research and development

 
24,900

 

 
24,900

Gain on divestiture of Lazanda

 
(17,064
)
 

 
(17,064
)
Managed care dispute reserve

 

 

 
4,742

Transaction and other costs

 
1,435

 
123

 
1,435

Non-GAAP adjusted EBITDA
$
40,963

 
$
32,848

 
$
155,335

 
$
116,540


 
(1) For the period from January 8, 2018 through November 8, 2018, the adjustment relates to the non-cash value assigned to inventory transferred to Collegium. As of the date of the amendment, on November 8, 2018, the Company ceased recognition of fixed revenues and will begin recognition of variable revenues when they become due beginning in January 2019.  Cash collected during the fourth quarter remained in-line with the pre-modification agreement amount of $33.8 million. The adjustment for the three months ended December 31, 2018 relates to the cash received in excess of the GAAP revenue recognized. The Company has consistently shown non-GAAP revenue for the Commercialization Agreement on a cash basis.

(2) Represents the cash received for inventory transferred to Collegium at the commencement of the Commercialization Agreement.
 
(3) Represents a $12.5 million benefit related to the release of sales reserves for which the Company is no longer financially responsible, net of $1.8 million in royalties payable to a third party.
 
(4) Removal of the impact of revenue adjustment estimates related to products that we are no longer commercializing.
 
(5) Legal costs/expenses related to opioid-related litigation, investigations and regulations pertaining to the Company’s historical commercialization of opioid products.
 
(6) Restructuring and other costs represents non-recurring costs associated with the Company’s restructuring, reincorporation, headquarters relocation and CEO transition.

8


RECONCILIATION OF GAAP NET INCOME/(LOSS) TO NON-GAAP ADJUSTED EARNINGS
(in thousands, except per share amounts)
(unaudited) 
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2018
 
2017
 
2018
 
2017
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
GAAP net income/(loss)
$
(24,138
)
 
$
(33,104
)
 
$
36,908

 
$
(102,496
)
Commercialization agreement revenues (1)
21,262

 

 
(25,164
)
 

Commercialization agreement cost of sales (2)

 

 
6,200

 

Nucynta sales reserve (3)

 

 
(10,711
)
 

Nucynta and Lazanda revenue reserves (4)
(1,024
)
 

 
(1,562
)
 

Expenses for opioid-related litigation, investigations and regulations (5)
3,537

 

 
7,897

 

Intangible amortization related to product acquisitions
25,443

 
25,541

 
101,774

 
102,745

Contingent consideration related to product acquisitions
143

 
(104
)
 
(515
)
 
(6,629
)
Stock-based compensation
2,549

 
3,095

 
10,439

 
12,965

Restructuring and related costs (6)
1,881

 
9,817

 
21,264

 
16,834

Acquired in process research and development

 
24,900

 

 
24,900

Gain on divestiture of Lazanda

 
(17,064
)
 

 
(17,064
)
Purdue litigation settlement

 

 
(62,000
)
 

Non-cash interest expense on debt
5,579

 
5,340

 
21,877

 
20,953

Managed care dispute reserve

 

 

 
4,742

Valuation allowance on deferred tax assets

 
11,017

 

 
30,291

Other costs

 

 
123

 

Income tax effect of non-GAAP adjustments (7)
(12,147
)
 
(18,626
)
 
(13,305
)
 
(56,875
)
Non-GAAP adjusted earnings
$
23,085

 
$
10,813

 
$
93,225

 
$
30,366

Add interest expense of convertible debt, net of tax (8)
1,704

 
1,348

 
6,814

 
5,390

Numerator
$
24,789

 
$
12,160

 
$
100,039

 
$
35,756

Shares used in calculation (8)
81,935

 
81,360

 
82,139

 
81,619

Non-GAAP adjusted earnings per share
$
0.30

 
$
0.15

 
$
1.22

 
$
0.44

 
(1) For the period from January 8, 2018 through November 8, 2018, the adjustment relates to the non-cash value assigned to inventory transferred to Collegium. As of the date of the amendment, on November 8, 2018, the Company ceased recognition of fixed revenues and will begin recognition of variable revenues when they become due beginning in January 2019.  Cash collected during the fourth quarter remained in-line with the pre-modification agreement amount of $33.8 million. The adjustment for the three months ended December 31, 2018 relates to the cash received in excess of the GAAP revenue recognized. The Company has consistently shown non-GAAP revenue for the Commercialization Agreement on a cash basis.

(2) Represents the cash received for inventory transferred to Collegium at the commencement of the Commercialization Agreement.
 
(3) Represents a $12.5 million benefit related to the release of sales reserves for which the Company is no longer financially responsible, net of $1.8 million in royalties payable to a third party.
 
(4) Removal of the impact of revenue adjustment estimates related to products that we are no longer commercializing.
 
(5) Legal costs/expenses related to opioid-related litigation, investigations and regulations pertaining to the Company’s historical commercialization of opioid products.
 
(6) Restructuring and other costs represents non-recurring costs associated with the Company’s restructuring, reincorporation, headquarters relocation and CEO transition.
 
(7) Calculated by taking the pre-tax non-GAAP adjustments and applying the statutory tax rate.
 
(8) The Company uses the if-converted method to compute diluted earnings per share with respect to its convertible debt.

9


RECONCILIATION OF GAAP NET INCOME (LOSS) PER SHARE TO
NON-GAAP ADJUSTED EARNINGS PER SHARE
(unaudited)
 
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
GAAP net income/(loss) per share
(0.38
)
 
(0.52
)
 
0.57

 
(1.63
)
Conversion from basic shares to diluted shares
0.09

 
0.12

 
(0.13
)
 
0.38

Commercialization agreement revenues
0.26

 

 
(0.30
)
 

Commercialization agreement cost of sales

 

 
0.08

 

Nucynta sales reserve

 

 
(0.13
)
 

Non-cash interest expense on debt
0.07

 
0.07

 
0.27

 
0.26

Nucynta and Lazanda revenue reserves

 

 
(0.01
)
 

Managed care dispute reserve

 

 

 
0.06

Expenses for opioid-related litigation, investigations and regulations
0.04

 

 
0.09

 

Purdue litigation settlement

 

 
(0.75
)
 

Intangible amortization related to product acquisitions
0.31

 
0.31

 
1.23

 
1.25

Contingent consideration related to product acquisitions
(0.01
)
 

 
(0.01
)
 
(0.08
)
Stock based compensation
0.03

 
0.04

 
0.13

 
0.16

Restructuring and related costs
0.03

 
0.12

 
0.26

 
0.21

Acquired in process research and development

 
0.30

 

 
0.30

Gain on divestiture of Lazanda

 
(0.21
)
 

 
(0.21
)
Valuation allowance on deferred tax assets

 
0.14

 

 
0.37

Income tax effect of non-GAAP adjustments
(0.16
)
 
(0.23
)
 
(0.16
)
 
(0.70
)
Add interest expense of convertible debt, net of tax
0.02

 
0.02

 
0.08

 
0.07

Non-GAAP adjusted diluted earnings per share
0.30

 
0.15

 
1.22

 
0.44



10



RECONCILATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
For the three months ended December 31, 2018
(in thousands)
(unaudited)

 
 
Commercialization agreement revenues
 
Product Sales
 
Royalties and milestones
 
Total Revenue
 
Cost of sales
 
Research and development expense
 
Selling, general and administrative expense
GAAP as reported
 
$
12,983

 
$
29,339

 
$
277

 
$
42,599

 
$
704

 
$
2,207

 
$
25,468

Commercialization agreement revenues and cost of sales
 
21,262

 

 

 
21,262

 

 

 

Nucynta sales reserve
 

 

 

 

 

 

 

Third party royalties
 
(82
)
 

 

 
(82
)
 
82

 

 

Nucynta and Lazanda revenue reserves
 

 
(1,024
)
 

 
(1,024
)
 

 

 

Expenses for opioid-related litigation, investigations and regulations
 

 

 

 

 

 

 
(3,537
)
Contingent consideration related to product acquisitions
 

 

 

 

 

 

 
(143
)
Stock based compensation
 

 

 

 

 

 
(109
)
 
(2,440
)
Restructuring and other costs
 

 

 

 

 

 

 
(22
)
Non-GAAP adjusted EBITDA
 
$
34,163

 
$
28,315

 
$
277

 
$
62,755

 
$
786

 
$
2,098

 
$
19,326


For non-GAAP adjusted EBITDA purposes, the company adjusts the full costs of restructuring, amortization of intangible assets, interest expense and taxes.














11



RECONCILATIONS OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
For the twelve months ended December 31, 2018
(in thousands)
(unaudited)

 
 
Commercialization agreement revenues
 
Product Sales
 
Royalties and milestones
 
Total Revenue
 
Cost of sales
 
Research and development expense
 
Selling, general and administrative expense
GAAP as reported
 
$
155,743

 
$
129,966

 
$
26,061

 
$
311,770

 
$
18,476

 
$
8,042

 
$
119,218

Commercialization agreement revenues and cost of sales
 
(25,164
)
 

 

 
(25,164
)
 

 

 

Nucynta sales reserve
 

 
(10,711
)
 

 
(10,711
)
 

 

 

Third party royalties
 
3,659

 

 

 
3,659

 
(3,659
)
 

 

Nucynta and Lazanda revenue reserves
 

 
(1,562
)
 

 
(1,562
)
 

 

 

Expenses for opioid-related litigation, investigations and regulations
 

 

 

 

 

 

 
(7,897
)
Contingent consideration related to product acquisitions
 

 

 

 

 

 

 
515

Stock based compensation
 

 

 

 

 
(30
)
 
(446
)
 
(9,963
)
Restructuring and other costs
 

 

 

 

 

 

 
(661
)
Other costs
 

 

 

 

 

 

 
(123
)
Non-GAAP adjusted EBITDA
 
$
134,238

 
$
117,693

 
$
26,061

 
$
277,992

 
$
14,787

 
$
7,596

 
$
101,089


For non-GAAP adjusted EBITDA purposes, the company adjusts the full costs of restructuring, amortization of intangible assets, interest expense and taxes.

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FULL-YEAR 2019 NON-GAAP GUIDANCE RECONCILATION
(in millions)
(unaudited)

 
 
 
 
Earnings(1)
 
 
Low End
 
High End
 
GAAP
 
($71)

 
 
 
($61)

 
 
Specified Items(2)
 
$
186

 
 
 
$
186

 
 
Non-GAAP
 
$
115

 
 
 
$
125

 
 
 
 
(1) GAAP net income guidance refers to GAAP net income and non-GAAP earnings guidance refers to non-GAAP adjusted EBITDA.
 
(2) For purposes of this forward-looking reconciliation, a description of the categories of specified items included in this reconciliation are detailed in the tables above.


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