Commission File Number: |
(State or Other Jurisdiction of Incorporation) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
N/A |
Large accelerated filer | ¨ | Accelerated filer | ¨ | ||||||||
þ | Smaller reporting company | ||||||||||
Emerging growth company |
Page # | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net product revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Cost of products sold | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Research and development expenses | ||||||||||||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||||||||||||
Restructuring (income) expense | ( | |||||||||||||||||||||||||
Total operating expense | ||||||||||||||||||||||||||
Operating loss | ( | ( | ( | ( | ||||||||||||||||||||||
Investment and other income, net | ||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
Loss on extinguishment of debt | ( | |||||||||||||||||||||||||
Loss before income taxes | ( | ( | ( | ( | ||||||||||||||||||||||
Income tax provision (benefit) | ( | |||||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Net loss per share – basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Net loss per share – diluted | ( | ( | ( | ( | ||||||||||||||||||||||
Weighted average number of shares outstanding - basic | ||||||||||||||||||||||||||
Weighted average number of shares outstanding - diluted |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||||||||
Foreign currency translation loss | ( | ( | ( | ( | ||||||||||||||||||||||
Net other comprehensive income (loss), net of income tax expense of $ | ( | ( | ||||||||||||||||||||||||
Total other comprehensive (loss) income, net of tax | ( | ( | ( | |||||||||||||||||||||||
Total comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
September 30, 2023 | December 31, 2022 | |||||||||||||
(Unaudited) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Marketable securities | ||||||||||||||
Accounts receivable, net | ||||||||||||||
Inventories | ||||||||||||||
Research and development tax credit receivable | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property and equipment, net | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Goodwill | ||||||||||||||
Research and development tax credit receivable | ||||||||||||||
Other non-current assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||
Current liabilities: | ||||||||||||||
Current portion of long-term debt | $ | $ | ||||||||||||
Current portion of operating lease liability | ||||||||||||||
Accounts payable | ||||||||||||||
Accrued expenses | ||||||||||||||
Other current liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Long-term operating lease liability | ||||||||||||||
Royalty financing obligation | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Shareholders’ equity (deficit): | ||||||||||||||
Preferred shares, nominal value of $ | ||||||||||||||
Ordinary shares, nominal value of $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total shareholders’ equity (deficit) | ( | |||||||||||||
Total liabilities and shareholders’ equity (deficit) | $ | $ |
Ordinary shares | Preferred shares | Additional | Accumulated | Accumulated other comprehensive | Total shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | paid-in capital | deficit | loss | equity (deficit) | |||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under at-the-market offering program, net of issuance costs | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred issuance costs | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted shares | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Employee share purchase plan share issuance | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
April 2023 public offering, net of issuance costs | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Mandatory Exchange of April 2027 Notes, net of issuance costs | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Mandatory Exchange of April 2027 Notes, net of issuance costs | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Employee share purchase plan share issuance | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2023 | $ | $ | $ | $ | ( | $ | ( | $ |
Ordinary shares | Preferred shares | Additional paid-in | Accumulated | Accumulated other comprehensive | Total shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | capital | deficit | loss | equity (deficit) | |||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted shares | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Employee share purchase plan share issuance | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted shares | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Change in fair value of October 2023 Notes conversion feature | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted shares | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under at-the-market offering program, net of issuance costs | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred issuance costs | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Employee share purchase plan share issuance | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Amortization of debt discount and debt issuance costs | ||||||||||||||
Changes in deferred taxes | ||||||||||||||
Share-based compensation expense | ||||||||||||||
Loss on extinguishment of debt | ||||||||||||||
Other adjustments | ( | |||||||||||||
Net changes in assets and liabilities | ||||||||||||||
Accounts receivable | ( | |||||||||||||
Inventories | ( | |||||||||||||
Prepaid expenses and other current assets | ( | |||||||||||||
Research and development tax credit receivable | ||||||||||||||
Accounts payable & other current liabilities | ( | |||||||||||||
Accrued expenses | ||||||||||||||
Other assets and liabilities | ( | |||||||||||||
Net cash used in operating activities | ( | ( | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchases of property and equipment | ( | |||||||||||||
Proceeds from sales of marketable securities | ||||||||||||||
Purchases of marketable securities | ( | ( | ||||||||||||
Net cash (used in) provided by investing activities | ( | |||||||||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from April 2023 public offering, net of issuance costs | ||||||||||||||
Payments for February 2023 Notes | ( | |||||||||||||
Payments for debt issuance costs | ( | ( | ||||||||||||
Proceeds from royalty purchase agreement | ||||||||||||||
Proceeds from issuance of shares off the at-the-market offering program | ||||||||||||||
Proceeds from stock option exercises and employee share purchase plan | ||||||||||||||
Net cash provided by financing activities | ||||||||||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents | ( | |||||||||||||
Net change in cash and cash equivalents | ( | |||||||||||||
Cash and cash equivalents at January 1, | ||||||||||||||
Cash and cash equivalents at September 30, | $ | $ | ||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||
Interest paid | $ | $ | ||||||||||||
Income taxes refund | $ | $ | ( |
Three and Nine Months Ended September 30, | ||||||||
Sales by Customer: | 2023 | |||||||
Accredo | % | |||||||
Caremark | % | |||||||
Optum | % |
As of September 30, 2023 | As of December 31, 2022 | |||||||||||||||||||||||||||||||||||||
Fair Value Measurements: | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||
Marketable securities (see Note 4) | ||||||||||||||||||||||||||||||||||||||
Mutual and money market funds | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Government securities - U.S. | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | $ |
September 30, 2023 | ||||||||||||||||||||||||||
Marketable Securities: | Adjusted Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||
Mutual and money market funds | $ | $ | $ | ( | $ | |||||||||||||||||||||
Government securities - U.S. | ||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
December 31, 2022 | ||||||||||||||||||||||||||
Marketable Securities: | Adjusted Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||
Mutual and money market funds | $ | $ | $ | ( | $ | |||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
Maturities | ||||||||||||||||||||||||||||||||
Marketable Debt Securities: | Less than 1 Year | 1-5 Years | 5-10 Years | Greater than 10 Years | Total | |||||||||||||||||||||||||||
Government securities - U.S. | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Inventory: | September 30, 2023 | |||||||
Raw materials and supplies | $ | |||||||
Work in process | ||||||||
Finished goods | ||||||||
Total | $ |
Exchangeable Senior Notes: | September 30, 2023 | December 31, 2022 | ||||||||||||
Principal amount of | $ | $ | ||||||||||||
Principal amount of | ||||||||||||||
Less: unamortized debt discount and issuance costs, net | ( | |||||||||||||
Net carrying amount of debt | ||||||||||||||
Less: current maturities, net of $ | ( | ( | ||||||||||||
Long-term debt | $ | $ | ||||||||||||
Royalty Financing Obligation: | September 30, 2023 | |||||||
Royalty financing obligation – beginning balance | $ | |||||||
Receipt of the first tranche of the royalty financing obligation | ||||||||
Accretion of imputed interest expense on royalty financing obligation | ||||||||
Royalty financing obligation – ending balance | ||||||||
Less: royalty payable to RTW classified within accrued expenses | ||||||||
Royalty financing obligation, non-current | $ |
Prepaid Expenses and Other Current Assets: | September 30, 2023 | December 31, 2022 | ||||||||||||
Prepaid and other expenses | $ | $ | ||||||||||||
Other | ||||||||||||||
Income tax receivable | ||||||||||||||
Total | $ | $ |
Other Non-Current Assets: | September 30, 2023 | December 31, 2022 | ||||||||||||
Right of use assets at contract manufacturing organizations, net | $ | $ | ||||||||||||
Other | ||||||||||||||
Total | $ | $ |
Accrued Expenses: | September 30, 2023 | December 31, 2022 | ||||||||||||
Accrued professional fees | $ | $ | ||||||||||||
Accrued compensation | ||||||||||||||
Reserves for variable consideration | ||||||||||||||
Royalty payable to RTW | ||||||||||||||
Accrued outsource contract costs | ||||||||||||||
Accrued restructuring | ||||||||||||||
Total | $ | $ |
Other Current Liabilities: | September 30, 2023 | December 31, 2022 | ||||||||||||
Accrued interest | $ | $ | ||||||||||||
Other | ||||||||||||||
Total | $ | $ |
Other Non-Current Liabilities: | September 30, 2023 | December 31, 2022 | ||||||||||||
Tax liabilities | $ | $ | ||||||||||||
Other | ||||||||||||||
Total | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
Net Loss Per Share: | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Weighted average shares: | ||||||||||||||||||||||||||
Basic shares | ||||||||||||||||||||||||||
Effect of dilutive securities—employee and director equity awards outstanding, preferred shares and 2023 Notes | ||||||||||||||||||||||||||
Diluted shares | ||||||||||||||||||||||||||
Net loss per share - basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Net loss per share - diluted | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
Accumulated Other Comprehensive Loss: | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Foreign currency translation adjustment: | ||||||||||||||||||||||||||
Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Net other comprehensive loss | ( | ( | ( | ( | ||||||||||||||||||||||
Balance at September 30, | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Unrealized loss on marketable debt securities, net | ||||||||||||||||||||||||||
Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Net other comprehensive income (loss), net of income tax expense of $ | ( | ( | ||||||||||||||||||||||||
Balance at September 30, | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Accumulated other comprehensive loss at September 30, | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Comparative Statements of Loss | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Net product revenue | $ | 7,014 | $ | — | $ | 7,014 | n/a | |||||||||||||||||||
Cost of products sold | 117 | — | 117 | n/a | ||||||||||||||||||||||
Gross profit | 6,897 | — | 6,897 | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Research and development expenses | 2,849 | 2,933 | (84) | (2.9) | % | |||||||||||||||||||||
Selling, general and administrative expenses | 39,158 | 14,096 | 25,062 | 177.8 | % | |||||||||||||||||||||
Restructuring income | — | (69) | 69 | (100.0) | % | |||||||||||||||||||||
Total operating expense | 42,007 | 16,960 | 25,047 | 147.7 | % | |||||||||||||||||||||
Operating loss | (35,110) | (16,960) | (18,150) | (107.0) | % | |||||||||||||||||||||
Investment and other income, net | 903 | 448 | 455 | 101.6 | % | |||||||||||||||||||||
Interest expense | (1,978) | (3,564) | 1,586 | 44.5 | % | |||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | n/a | ||||||||||||||||||||||
Loss before income taxes | (36,185) | (20,076) | (16,109) | (80.2) | % | |||||||||||||||||||||
Income tax provision | 89 | 70 | 19 | (27.1) | % | |||||||||||||||||||||
Net loss | $ | (36,274) | $ | (20,146) | $ | (16,128) | (80.1) | % | ||||||||||||||||||
Net loss per share - diluted | $ | (0.41) | $ | (0.33) | $ | (0.08) | (24.2) | % |
Nine Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Comparative Statements of Loss | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Net product revenue | $ | 8,510 | $ | — | $ | 8,510 | n/a | |||||||||||||||||||
Cost of products sold | 153 | — | 153 | n/a | ||||||||||||||||||||||
Gross profit | 8,357 | — | 8,357 | n/a | ||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Research and development expenses | 10,902 | 14,465 | (3,563) | (24.6) | % | |||||||||||||||||||||
Selling, general and administrative expenses | 110,404 | 57,535 | 52,869 | 91.9 | % | |||||||||||||||||||||
Restructuring expense | — | 3,523 | (3,523) | (100.0) | % | |||||||||||||||||||||
Total operating expense | 121,306 | 75,523 | 45,783 | 60.6 | % | |||||||||||||||||||||
Operating loss | (112,949) | (75,523) | (37,426) | (49.6) | % | |||||||||||||||||||||
Investment and other income, net | 1,719 | 536 | 1,183 | 220.7 | % | |||||||||||||||||||||
Interest expense | (7,532) | (9,087) | 1,555 | 17.1 | % | |||||||||||||||||||||
Loss on extinguishment of debt | (13,129) | — | (13,129) | n/a | ||||||||||||||||||||||
Loss before income taxes | (131,891) | (84,074) | (47,817) | (56.9) | % | |||||||||||||||||||||
Income tax (benefit) provision | (401) | 25,940 | (26,341) | 101.5 | % | |||||||||||||||||||||
Net loss | $ | (131,490) | $ | (110,014) | $ | (21,476) | (19.5) | % | ||||||||||||||||||
Net loss per share - diluted | $ | (1.71) | $ | (1.85) | $ | 0.14 | 7.6 | % |
Three Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Gross Profit: | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Net product revenue | $ | 7,014 | $ | — | $ | 7,014 | n/a | |||||||||||||||||||
Cost of products sold | 117 | — | 117 | n/a | ||||||||||||||||||||||
Gross profit | $ | 6,897 | $ | — | $ | 6,897 | n/a | |||||||||||||||||||
Gross profit as a percentage of net product revenue | 98 | % | n/a | 98 | % | n/a |
Nine Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Gross Profit: | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Net product revenue | $ | 8,510 | $ | — | $ | 8,510 | n/a | |||||||||||||||||||
Cost of products sold | 153 | — | 153 | n/a | ||||||||||||||||||||||
Gross profit | $ | 8,357 | $ | — | $ | 8,357 | n/a | |||||||||||||||||||
Gross profit as a percentage of net product revenue | 98 | % | n/a | 98 | % | n/a |
Nine Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Research and Development Expenses: | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Research and development expenses | $ | 10,902 | $ | 14,465 | $ | (3,563) | (24.6) | % |
Three Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Selling, General and Administrative Expenses: | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Selling, general and administrative expenses | $ | 39,158 | $ | 14,096 | $ | 25,062 | 177.8 | % |
Nine Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Selling, General and Administrative Expenses: | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Selling, general and administrative expenses | $ | 110,404 | $ | 57,535 | $ | 52,869 | 91.9 | % |
Three Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Interest Expense: | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Interest expense | $ | (1,978) | $ | (3,564) | $ | 1,586 | (44.5) | % |
Nine Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Interest Expense: | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Interest expense | $ | (7,532) | $ | (9,087) | $ | 1,555 | (17.1) | % |
Nine Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Loss on extinguishment of debt: | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Loss on extinguishment of debt | $ | (13,129) | $ | — | $ | (13,129) | n/a |
Nine Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Income Tax (Benefit) Provision: | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Income tax (benefit) provision | $ | (401) | $ | 25,940 | $ | (26,341) | 101.5 | % | ||||||||||||||||||
Percentage of loss before income taxes | 0.3 | % | (30.9) | % |
Nine Months Ended September 30, | Change | |||||||||||||||||||||||||
2023 vs. 2022 | ||||||||||||||||||||||||||
Net cash (used in) provided by: | 2023 | 2022 | $ | % | ||||||||||||||||||||||
Operating activities | $ | (100,482) | $ | (54,938) | $ | (45,544) | (82.9) | % | ||||||||||||||||||
Investing activities | (78,021) | 56,823 | (134,844) | (237.3) | % | |||||||||||||||||||||
Financing activities | 156,446 | 7,921 | 148,525 | 1,875.1 | % |
Exhibit No. | Description | |||||||
10.1‡ | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104* | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) |
AVADEL PHARMACEUTICALS PLC | ||||||||
(Registrant) | ||||||||
Date: November 8, 2023 | By: | /s/ Gregory J. Divis | ||||||
Gregory J. Divis | ||||||||
Chief Executive Officer | ||||||||
(Duly Authorized Officer and Principal Executive Officer) |
Date: November 8, 2023 | By: | /s/ Thomas S. McHugh | ||||||
Thomas S. McHugh | ||||||||
Senior Vice President and Chief Financial Officer | ||||||||
(Duly Authorized Officer and Principal Financial and Accounting Officer) |
Date: November 8, 2023 | /s/ Gregory J. Divis | ||||
Gregory J. Divis | |||||
Chief Executive Officer |
Date: November 8, 2023 | /s/ Thomas S. McHugh | ||||
Thomas S. McHugh | |||||
Senior Vice President and Chief Financial Officer |
Date: November 8, 2023 | /s/ Gregory J. Divis | ||||
Gregory J. Divis | |||||
Chief Executive Officer |
Date: November 8, 2023 | /s/ Thomas S. McHugh | ||||
Thomas S. McHugh | |||||
Senior Vice President and Chief Financial Officer |
CONDENSED CONSOLIDATED STATEMENTS OF LOSS - USD ($) shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||||
Net product revenue | $ 7,014,000 | $ 0 | $ 8,510,000 | $ 0 |
Cost of products sold | 117,000 | 0 | 153,000 | 0 |
Gross profit | 6,897,000 | 0 | 8,357,000 | 0 |
Operating expenses: | ||||
Research and development expenses | 2,849,000 | 2,933,000 | 10,902,000 | 14,465,000 |
Selling, general and administrative expenses | 39,158,000 | 14,096,000 | 110,404,000 | 57,535,000 |
Restructuring (income) expense | 0 | (69,000) | 0 | 3,523,000 |
Total operating expense | 42,007,000 | 16,960,000 | 121,306,000 | 75,523,000 |
Operating loss | (35,110,000) | (16,960,000) | (112,949,000) | (75,523,000) |
Investment and other income, net | 903,000 | 448,000 | 1,719,000 | 536,000 |
Interest expense | (1,978,000) | (3,564,000) | (7,532,000) | (9,087,000) |
Loss on extinguishment of debt | 0 | 0 | (13,129,000) | 0 |
Loss before income taxes | (36,185,000) | (20,076,000) | (131,891,000) | (84,074,000) |
Income tax provision (benefit) | 89,000 | 70,000 | (401,000) | 25,940,000 |
Net loss | $ (36,274,000) | $ (20,146,000) | $ (131,490,000) | $ (110,014,000) |
Net loss per share - basic (in dollars per share) | $ (0.41) | $ (0.33) | $ (1.71) | $ (1.85) |
Net loss per share - diluted (in dollars per share) | $ (0.41) | $ (0.33) | $ (1.71) | $ (1.85) |
Weighted average number of shares outstanding - basic (in shares) | 89,380 | 60,201 | 76,931 | 59,359 |
Weighted average number of shares outstanding - diluted (in shares) | 89,380 | 60,201 | 76,931 | 59,359 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (36,274) | $ (20,146) | $ (131,490) | $ (110,014) |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation loss | (303) | (647) | (120) | (1,489) |
Net other comprehensive income (loss), net of income tax expense of $0, $0, $0 and $0, respectively | 295 | (934) | 511 | (2,480) |
Total other comprehensive (loss) income, net of tax | (8) | (1,581) | 391 | (3,969) |
Total comprehensive loss | $ (36,282) | $ (21,727) | $ (131,099) | $ (113,983) |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Unrealized gain (loss) on marketable debt securities, tax expense | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred shares, nominal value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized (in shares) | 50,000 | 50,000 |
Preferred shares, shares issued (in shares) | 5,194 | 488 |
Preferred shares, shares outstanding (in shares) | 5,194 | 488 |
Ordinary shares, nominal value (in dollars per share) | $ 0.01 | $ 0.01 |
Ordinary shares, shares authorized (in shares) | 500,000 | 500,000 |
Ordinary shares, shares issued (in shares) | 89,398 | 62,878 |
Ordinary shares, shares outstanding (in shares) | 89,398 | 62,878 |
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations. Avadel Pharmaceuticals plc (Nasdaq: AVDL) (“Avadel,” the “Company,” “we,” “our,” or “us”) is a biopharmaceutical company. The Company is registered as an Irish public limited company. The Company’s headquarters are in Dublin, Ireland with operations in Dublin, Ireland and St. Louis, Missouri, United States (“U.S.”). LUMRYZ, formally known as FT218, is an extended-release formulation of sodium oxybate indicated to be taken once at bedtime for the treatment of cataplexy or excessive daytime sleepiness (“EDS”) in adults with narcolepsy. LUMRYZ was approved by the U.S. Food and Drug Administration (“FDA”) on May 1, 2023. The FDA also granted Orphan Drug Exclusivity (“ODE”) to LUMRYZ for a period of seven years until May 1, 2030. In June 2023, the Company commercially launched LUMRYZ in the U.S. In approving LUMRYZ, the FDA approved a risk evaluation and mitigation strategy (“REMS”) for LUMRYZ to help ensure that the benefits of the drug in the treatment of cataplexy and EDS in narcolepsy outweigh the risks of serious adverse outcomes resulting from inappropriate prescribing, misuse, abuse, and diversion of the drug. Under this REMS, healthcare providers, pharmacies, practitioners, or health care settings that dispense the drug must be specially certified and the drug must be dispensed to patients with documentation of safe use conditions. As of the date of this Quarterly Report, the Company’s only commercialized product is LUMRYZ. The Company continues to evaluate opportunities to expand its product portfolio. Liquidity. The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. On March 29, 2023, the Company and Avadel CNS Pharmaceuticals, LLC, an indirect wholly-owned subsidiary of the Company (“Avadel CNS”) entered into a royalty purchase agreement (“RPA”) with RTW Investments, L.P. (“RTW”) that could provide the Company up to $75,000 of royalty financing in two tranches. The first tranche of $30,000 became available upon satisfaction of certain conditions which included the Company’s first shipment of LUMRYZ. The second tranche is available to use, at the Company’s election, if it achieves quarterly net revenue of $25,000 by the quarter ending June 30, 2024. The second tranche expires if the Company does not elect to use it by August 31, 2024. On August 1, 2023, the Company received the first tranche of $30,000. At March 31, 2023, the Company had outstanding $117,375 aggregate principal amount of its 4.50% exchangeable senior notes due October 2023 (the “October 2023 Notes”). Over the course of April 3 and April 4, 2023, Avadel Finance Cayman Limited, a Cayman Islands exempted company and an indirect wholly-owned subsidiary of the Company (the “Issuer”), completed an exchange of $96,188 of its $117,375 October 2023 Notes for $106,268 of a new series 6.0% exchangeable notes due April 2027 (the “April 2027 Notes”) (the “2023 Exchange Transaction”). The Issuer settled, with a combination of cash and American Depositary Shares (“ADSs”), the remaining $21,187 aggregate principal amount of the October 2023 Notes in October 2023. The aggregate amount of cash and ADSs delivered to holders for the October 2023 Notes and accrued and unpaid interest was $21,641 and 408 ADSs, respectively. On April 3, 2023, the Company completed the sale of 12,205 ordinary shares, nominal value $0.01 per share (“Ordinary Shares”) in the form of ADSs and 4,706 Series B Non-Voting Convertible Preferred Shares (“Series B Preferred Shares”) in an underwritten public offering. The Company received proceeds, net of underwriter fees and issuance costs of $134,151. On May 31, 2023 and in accordance with the terms of the Indenture of the April 2027 Notes (the “Indenture”), dated as of April 3, 2023, the Issuer exercised its option to exchange (the “Mandatory Exchange”) $106,268 of aggregate principal amount of the April 2027 Notes, which represents all of the April 2027 Notes outstanding under the Indenture. The Mandatory Exchange consideration per one thousand dollars of principal April 2027 Notes exchanged consisted of 116.1846 of the Company’s ADSs, representing a corresponding number of the Company’s ordinary shares, nominal value $0.01 per share, plus accrued and unpaid interest thereon. The aggregate amount of ADSs and cash in respect of accrued and unpaid interest delivered to holders of Notes in the Mandatory Exchange was 12,347 ADSs and $1,470, respectively. The Mandatory Exchange closed on June 26, 2023. At-the-Market Offering Program On February 5, 2020, the Company entered into an Open Market Sale AgreementSM (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) with respect to an at-the-market offering program (“ATM Program”) under which the Company may offer and sell its ADSs (such ADSs sold under the ATM Program, “ATM ADSs”) through Jefferies as its sales agent. The Company agreed to pay Jefferies a commission up to 3.0% of the aggregate gross sales proceeds of such ATM ADSs. The initial aggregate offering price of the ATM Program was up to $50,000 of ADSs pursuant to its prospectus, dated February 14, 2020, included with the Company’s Registration Statement on Form S-3 (File No. 333-236258) (the “2020 Prospectus”). In August 2022, the Company filed an additional prospectus, dated September 12, 2022, included with the Company’s new Registration Statement on Form S-3 (File No. 333-267198) (the “2022 Prospectus”), in order to allocate up to $100,000 in additional ADSs to the ATM Program. The 2020 Shelf Registration expired on February 14, 2023. Pursuant to the Sales Agreement, the Company issued and sold 1,564 ADSs during the nine months ended September 30, 2023, resulting in net proceeds to the Company of approximately $11,913. The Company may offer and sell up to an additional $96,064 of ADSs under the ATM Program that remain available for sale pursuant to the 2022 Prospectus. Basis of Presentation. The unaudited condensed consolidated balance sheet as of September 30, 2023, which is derived from the prior year 2022 audited consolidated financial statements, and the interim unaudited condensed consolidated financial statements presented herein, have been prepared in accordance with U.S. GAAP, the requirements of Form 10-Q and Article 10 of Regulation S-X and, consequently, do not include all information or footnotes required by U.S. GAAP for complete financial statements or all the disclosures normally made in an Annual Report on Form 10-K. Accordingly, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s 2022 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”) on March 29, 2023. Reclassifications Certain reclassifications are made to prior year amounts whenever necessary to conform with the current year presentation. Certain reclassifications have been made to balances within the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and Note 9: Other Assets and Liabilities for the year ended December 31, 2022 to condense line items of the same nature into a single line. We identified additional significant accounting policies as described below. Revenue. Revenue includes sales of LUMRYZ. ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when the performance obligations to the customer have been satisfied through the transfer of control of the goods or services. To determine the appropriate revenue recognition for arrangements that the Company believes are within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to contracts only when the Company and its customer’s rights and obligations under the contract can be determined, the contract has commercial substance, and it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. For contracts that are determined to be within the scope of ASC 606, the Company identifies the promised goods or services in the contract to determine if they are separate performance obligations or if they should be bundled with other goods and services into a single performance obligation. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Product Sales The Company sells LUMRYZ to specialty pharmacies and considers those specialty pharmacies to be its customers. Under ASC 606, revenue from product sales is recognized when the customer obtains control of the product, which occurs typically upon receipt by the customer. The Company’s gross product sales are subject to a variety of price adjustments to arrive at reported net product revenue. These adjustments include estimates of payment discounts, specialty pharmacy fees, patient financial assistance programs, rebates and product returns and are estimated based on contractual arrangements, historical trends, expected utilization of such products and other judgments and analysis. Reserves for Variable Consideration Revenues from product sales are recorded at the estimated net selling price, which includes reserves for estimated variable consideration to reduce gross product sales to net product revenue resulting from payment discounts, specialty pharmacy fees, patient financial assistance programs, rebates and product returns. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable if the amount is payable to the customer. The reserves are classified as a liability if the amount is payable to a party other than a customer. Where appropriate, these estimated reserves take into consideration relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, historical trends, current and expected patient demand and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates to reduce gross selling price to net selling price. The actual net selling price ultimately may differ from our estimates. Inventories. Inventories consist of raw materials, work in process and finished products, which are stated at lower of cost or net realizable value, using the first-in, first- out (“FIFO”) method. Raw materials used in the production of pre-clinical and clinical products are expensed as research and development (“R&D”) costs. The Company establishes reserves for inventory estimated to be obsolete, unmarketable or slow-moving on a case by case basis. The Company capitalizes inventory costs associated with products when future commercialization is considered probable and the future economic benefit is expected to be realized, which is typically when regulatory approval is obtained for a drug candidate. As such, the Company began capitalizing costs related to inventory in May 2023 upon FDA approval of LUMRYZ. Manufacturing costs associated with inventory purchased or produced prior to FDA approval were recorded as research and development expense in prior periods. Accordingly, cost of products sold in the near term will likely be lower than in later periods given the sales of pre-approval inventory will carry little to no manufacturing costs given such costs were previously expensed to research and development expense. The unaudited condensed consolidated financial statements include the accounts of the Company and subsidiaries and reflect all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. All intercompany accounts and transactions have been eliminated. Results for interim periods are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period.
|
Revenue Recognition |
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition The Company’s source of net product revenue during the three and nine months ended September 30, 2023 consists solely of sales of LUMRYZ. For the three and nine months ended September 30, 2023, three customers accounted for 100% of sales. The following table presents a summary of the percentage of total sales to customers:
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Fair Value Measurement |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | Fair Value Measurement The Company is required to measure certain assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, the Company uses fair value extensively when accounting for and reporting certain financial instruments, when measuring certain contingent consideration liabilities and in the initial recognition of net assets acquired in a business combination. Fair value is estimated by applying the hierarchy described below, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. ASC 820, Fair Value Measurements and Disclosures, defines fair value as a market-based measurement that should be determined based on the assumptions that marketplace participants would use in pricing an asset or liability. When estimating fair value, depending on the nature and complexity of the asset or liability, the Company may generally use one or each of the following techniques: •Income approach, which is based on the present value of a future stream of net cash flows. •Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities. As a basis for considering the assumptions used in these techniques, the standard establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: •Level 1 - Quoted prices for identical assets or liabilities in active markets. •Level 2 - Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means. •Level 3 - Unobservable inputs that reflect estimates and assumptions. The following table summarizes the financial instruments measured at fair value on a recurring basis classified in the fair value hierarchy (Level 1, 2 or 3) based on the inputs used for valuation in the accompanying unaudited condensed consolidated balance sheets:
A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. During the periods ended September 30, 2023 and December 31, 2022, respectively, there were no transfers in and out of Level 3. During the three and nine months ended September 30, 2023 and 2022, respectively, the Company did not recognize any allowances for credit losses. Some of the Company’s financial instruments, such as cash and cash equivalents, accounts receivable and accounts payable, are reflected in the balance sheet at carrying value, which approximates fair value due to their short-term nature. Debt October 2023 Notes The Company estimates the fair value of its $21,187 aggregate principal amount of its October 2023 Notes based on interest rates that would be currently available to the Company for issuance of similar types of debt instruments with similar terms and remaining maturities or recent trading prices obtained from brokers (a Level 2 input). The estimated fair value of the October 2023 Notes at September 30, 2023 was $21,187. The remaining $21,187 aggregate principal amount of the October 2023 Notes matured on October 2, 2023 and were fully settled in October 2023. See Note 6: Long-Term Debt for additional information regarding the Company’s debt obligations. Royalty Financing Obligation As of September 30, 2023, the carrying value of the royalty financing obligation under the RPA approximated its fair value and was measured using the estimates of forecasted net product revenue based on current contractual and statutory requirements, specific known market events and trends, industry data, historical trends, current and expected patient demand and forecasted customer buying and payment patterns (Level 3 inputs). See Note 7: Royalty Financing Obligation for additional information regarding the Company’s royalty financing obligation.
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Marketable Securities |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Marketable Securities The Company has investments in available-for-sale debt securities which are recorded at fair market value. The change in the fair value of available-for-sale debt investments is recorded as accumulated other comprehensive loss in shareholders’ equity (deficit), net of income tax effects. As of September 30, 2023, the Company considered any decreases in fair value on its marketable securities to be driven by factors other than credit risk, including market risk. The following tables show the Company’s available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category as of September 30, 2023 and December 31, 2022, respectively:
The Company determines realized gains or losses on the sale of marketable securities on a specific identification method. The Company reflects these gains and losses as a component of investment and other income, net in the accompanying unaudited condensed consolidated statements of loss. The Company recognized gross realized gains of $268 and $64 for the three months ended September 30, 2023 and 2022, respectively. These realized gains were offset by gross realized losses of $283 and $61 for the three months ended September 30, 2023 and 2022, respectively. We recognized gross realized gains of $269 and $372 for the nine months ended September 30, 2023 and 2022, respectively. These realized gains were offset by gross realized losses of $344 and $1,092 for the nine months ended September 30, 2023 and 2022, respectively. The following table summarizes the estimated fair value of the Company’s investments in marketable debt securities, accounted for as available-for-sale debt securities and classified by the contractual maturity date of the securities as of September 30, 2023:
The Company has classified its investment in available-for-sale marketable debt securities as current assets in the consolidated balance sheets as the securities need to be available for use, if required, to fund current operations. There are no restrictions on the sale of any securities in the Company’s investment portfolio. The Company does not intend to sell the investments and it is not more likely than not that it will be required to sell the investments before recovery of their amortized cost bases.
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Inventories |
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The principal categories of inventories at September 30, 2023 were comprised of the following:
The Company had no capitalized inventories at December 31, 2022. The Company capitalizes inventory costs associated with products when future commercialization is considered probable and the future economic benefit is expected to be realized, which is typically when regulatory approval is obtained for a drug candidate. As such, the Company began capitalizing costs related to inventory in May 2023 upon FDA approval of LUMRYZ. Manufacturing costs associated with inventory purchased or produced prior to FDA approval were recorded as research and development expense in prior periods.
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Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt is summarized as follows:
For the three months ended September 30, 2023 and 2022, the total interest expense for exchangeable senior notes was $574 and $3,564, respectively, with coupon interest expense of $238 and $1,646 for each period, respectively, and the amortization of debt issuance costs and debt discount, totaling $336 and $1,918 for each period, respectively. For the nine months ended September 30, 2023 and 2022, the total interest expense for exchangeable senior notes was $6,128 and $9,087, respectively, with coupon interest expense of $3,332 and $4,852 for each period, respectively, and the amortization of debt issuance costs and debt discount of $2,796 and $4,147 for each period, respectively. February 2023 Notes On February 16, 2018, the Issuer issued $125,000 aggregate principal amount of its 4.50% exchangeable senior notes due February 2023 (the “February 2023 Notes”) in a private placement (the “Offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act. In connection with the Offering, the Issuer granted the initial purchasers of the February 2023 Notes a 30-day option to purchase up to an additional $18,750 aggregate principal amount of the February 2023 Notes, which was fully exercised on February 16, 2018. Net proceeds received by the Company, after issuance costs and discounts, were approximately $137,560. The February 2023 Notes were the Company’s senior unsecured obligations and ranked equally in right of payment with all of the Company’s existing and future senior unsecured indebtedness and effectively junior to any of the Company’s existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness. October 2023 Notes On April 5, 2022, the Issuer completed the exchange of $117,375 of its February 2023 Notes for a new series of its October 2023 Notes (the “2022 Exchange Transaction”). The remaining $26,375 aggregate principal amount of the February 2023 Notes were not exchanged and maintained a maturity date of February 1, 2023. On November 4, 2022, the Company repurchased $8,875 of its February 2023 Notes and on the maturity date of February 1, 2023, the Company repaid, with cash on hand, the remaining $17,500 aggregate principal amount of its February 2023 Notes. The Company accounted for the October 2023 Notes as a modification to the February 2023 Notes. The Company paid $4,804 in fees to note holders of the October 2023 Notes that are amortized over the remaining term of the October 2023 Notes. The Company paid approximately $5,450 in fees to third parties that were expensed as part of the completed 2022 Exchange Transaction. Additionally, the fair value of the unseparated, embedded conversion feature increased by $5,508, which reduced the carrying amount of the convertible debt instrument as an unamortized debt discount, with a corresponding increase in additional paid-in capital. The $5,508 is amortized over the remaining term of the October 2023 Notes as a component of interest expense. The October 2023 Notes were exchangeable at the option of the holders at an initial exchange rate of 92.6956 ADSs per $1 principal amount of October 2023 Notes, which was equivalent to an initial exchange price of approximately $10.79 per ADS. Such an initial exchange price represented a premium of approximately 20% to the $8.99 per ADS closing price on The Nasdaq Global Market on February 13, 2018. Upon the exchange of the October 2023 Notes, the Issuer paid a combination of cash and ADSs at the Issuer’s election. The Company had the option to redeem for cash all of the October 2023 Notes if the last reported sale price (as defined by the indenture) of the ADSs was at least 130% of the Exchange Price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period ending on, and including, the trading day immediately preceding the date on which the Company provided notice to redeem the October 2023 Notes. Over the course of April 3 and April 4, 2023, the Issuer completed an exchange of $96,188 of its $117,375 October 2023 Notes for $106,268 of new April 2027 Notes. The remaining $21,187 aggregate principal amount of the October 2023 Notes matured on October 2, 2023. The Issuer settled, with a combination of cash and ADSs, the remaining $21,187 aggregate principal amount of the October 2023 Notes in October 2023. The aggregate amount of cash and ADSs delivered to holders for the October 2023 Notes and accrued and unpaid interest was $21,641 and 408 ADSs, respectively. April 2027 Notes The Company accounted for the exchange of the October 2023 Notes for the April 2027 Notes as an extinguishment of $96,188 of its October 2023 Notes. The Company recorded a loss on the extinguishment of $13,129 as a result of the exchange. On June 26, 2023 and in accordance with the terms of the Indenture the Company completed the Mandatory Exchange of $106,268 of aggregate principal amount of the April 2027 Notes, which represents all of the April 2027 Notes outstanding under the Indenture. The Mandatory Exchange consideration per one thousand dollars of principal Notes exchanged consisted of 116.1846 of ADSs representing a corresponding number of the Company’s ordinary shares, nominal value $0.01 per share, plus accrued and unpaid interest thereon. The aggregate amount of ADSs and cash in respect of accrued and unpaid interest delivered to holders of Notes in the Mandatory Exchange was 12,347 ADSs and $1,470, respectively. Royalty Financing ObligationOn March 29, 2023, the Company and Avadel CNS entered into the RPA with RTW that could provide the Company up to $75,000 of royalty financing in two tranches. The first tranche of $30,000 became available upon satisfaction of certain conditions which included the Company’s first shipment of LUMRYZ. The second tranche is available to use, at the Company’s election, if it achieves quarterly net revenue of $25,000 by the quarter ending June 30, 2024. The second tranche expires if the Company does not elect to use it by August 31, 2024.On August 1, 2023, the Company received the first tranche of $30,000. As a result of receiving the first tranche, the Company is required to make quarterly royalty payments calculated as 3.75% of worldwide net product revenue of LUMRYZ, up to a total payback of $75,000. The RPA is recorded as a royalty financing obligation on the unaudited condensed consolidated balance sheet based on the Company’s evaluation of the terms of the RPA. The accounts receivable and inventory balances of LUMRYZ are pledged as collateral for the RPA. There are no subjective acceleration clauses or provisions, and there are no covenants in violation or other clauses that would cause the full amount of the royalty financing obligation to be callable. As such, the RPA is recorded as a long-term obligation on the unaudited condensed consolidated balance sheet. The Company imputes interest using the effective interest method and records interest expense based on the unamortized royalty financing obligation. The Company’s estimate of the interest rate under the RPA is based primarily on forecasted net revenue and the calculated amounts and timing of net royalty payments to reach the total payback of $75,000. As of September 30, 2023 the effective interest rate is estimated as 28.1%. The Company will account for changes in the imputed interest rate resulting from changes in forecasted net product revenue using the prospective method. The following table shows the activity within the royalty financing obligation account for the period ended September 30, 2023.
The accretion of imputed interest expense is reflected as interest expense in the unaudited condensed consolidated statements of loss.
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Royalty Financing Obligation |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Royalty Financing Obligation | Long-Term Debt Long-term debt is summarized as follows:
For the three months ended September 30, 2023 and 2022, the total interest expense for exchangeable senior notes was $574 and $3,564, respectively, with coupon interest expense of $238 and $1,646 for each period, respectively, and the amortization of debt issuance costs and debt discount, totaling $336 and $1,918 for each period, respectively. For the nine months ended September 30, 2023 and 2022, the total interest expense for exchangeable senior notes was $6,128 and $9,087, respectively, with coupon interest expense of $3,332 and $4,852 for each period, respectively, and the amortization of debt issuance costs and debt discount of $2,796 and $4,147 for each period, respectively. February 2023 Notes On February 16, 2018, the Issuer issued $125,000 aggregate principal amount of its 4.50% exchangeable senior notes due February 2023 (the “February 2023 Notes”) in a private placement (the “Offering”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act. In connection with the Offering, the Issuer granted the initial purchasers of the February 2023 Notes a 30-day option to purchase up to an additional $18,750 aggregate principal amount of the February 2023 Notes, which was fully exercised on February 16, 2018. Net proceeds received by the Company, after issuance costs and discounts, were approximately $137,560. The February 2023 Notes were the Company’s senior unsecured obligations and ranked equally in right of payment with all of the Company’s existing and future senior unsecured indebtedness and effectively junior to any of the Company’s existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness. October 2023 Notes On April 5, 2022, the Issuer completed the exchange of $117,375 of its February 2023 Notes for a new series of its October 2023 Notes (the “2022 Exchange Transaction”). The remaining $26,375 aggregate principal amount of the February 2023 Notes were not exchanged and maintained a maturity date of February 1, 2023. On November 4, 2022, the Company repurchased $8,875 of its February 2023 Notes and on the maturity date of February 1, 2023, the Company repaid, with cash on hand, the remaining $17,500 aggregate principal amount of its February 2023 Notes. The Company accounted for the October 2023 Notes as a modification to the February 2023 Notes. The Company paid $4,804 in fees to note holders of the October 2023 Notes that are amortized over the remaining term of the October 2023 Notes. The Company paid approximately $5,450 in fees to third parties that were expensed as part of the completed 2022 Exchange Transaction. Additionally, the fair value of the unseparated, embedded conversion feature increased by $5,508, which reduced the carrying amount of the convertible debt instrument as an unamortized debt discount, with a corresponding increase in additional paid-in capital. The $5,508 is amortized over the remaining term of the October 2023 Notes as a component of interest expense. The October 2023 Notes were exchangeable at the option of the holders at an initial exchange rate of 92.6956 ADSs per $1 principal amount of October 2023 Notes, which was equivalent to an initial exchange price of approximately $10.79 per ADS. Such an initial exchange price represented a premium of approximately 20% to the $8.99 per ADS closing price on The Nasdaq Global Market on February 13, 2018. Upon the exchange of the October 2023 Notes, the Issuer paid a combination of cash and ADSs at the Issuer’s election. The Company had the option to redeem for cash all of the October 2023 Notes if the last reported sale price (as defined by the indenture) of the ADSs was at least 130% of the Exchange Price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period ending on, and including, the trading day immediately preceding the date on which the Company provided notice to redeem the October 2023 Notes. Over the course of April 3 and April 4, 2023, the Issuer completed an exchange of $96,188 of its $117,375 October 2023 Notes for $106,268 of new April 2027 Notes. The remaining $21,187 aggregate principal amount of the October 2023 Notes matured on October 2, 2023. The Issuer settled, with a combination of cash and ADSs, the remaining $21,187 aggregate principal amount of the October 2023 Notes in October 2023. The aggregate amount of cash and ADSs delivered to holders for the October 2023 Notes and accrued and unpaid interest was $21,641 and 408 ADSs, respectively. April 2027 Notes The Company accounted for the exchange of the October 2023 Notes for the April 2027 Notes as an extinguishment of $96,188 of its October 2023 Notes. The Company recorded a loss on the extinguishment of $13,129 as a result of the exchange. On June 26, 2023 and in accordance with the terms of the Indenture the Company completed the Mandatory Exchange of $106,268 of aggregate principal amount of the April 2027 Notes, which represents all of the April 2027 Notes outstanding under the Indenture. The Mandatory Exchange consideration per one thousand dollars of principal Notes exchanged consisted of 116.1846 of ADSs representing a corresponding number of the Company’s ordinary shares, nominal value $0.01 per share, plus accrued and unpaid interest thereon. The aggregate amount of ADSs and cash in respect of accrued and unpaid interest delivered to holders of Notes in the Mandatory Exchange was 12,347 ADSs and $1,470, respectively. Royalty Financing ObligationOn March 29, 2023, the Company and Avadel CNS entered into the RPA with RTW that could provide the Company up to $75,000 of royalty financing in two tranches. The first tranche of $30,000 became available upon satisfaction of certain conditions which included the Company’s first shipment of LUMRYZ. The second tranche is available to use, at the Company’s election, if it achieves quarterly net revenue of $25,000 by the quarter ending June 30, 2024. The second tranche expires if the Company does not elect to use it by August 31, 2024.On August 1, 2023, the Company received the first tranche of $30,000. As a result of receiving the first tranche, the Company is required to make quarterly royalty payments calculated as 3.75% of worldwide net product revenue of LUMRYZ, up to a total payback of $75,000. The RPA is recorded as a royalty financing obligation on the unaudited condensed consolidated balance sheet based on the Company’s evaluation of the terms of the RPA. The accounts receivable and inventory balances of LUMRYZ are pledged as collateral for the RPA. There are no subjective acceleration clauses or provisions, and there are no covenants in violation or other clauses that would cause the full amount of the royalty financing obligation to be callable. As such, the RPA is recorded as a long-term obligation on the unaudited condensed consolidated balance sheet. The Company imputes interest using the effective interest method and records interest expense based on the unamortized royalty financing obligation. The Company’s estimate of the interest rate under the RPA is based primarily on forecasted net revenue and the calculated amounts and timing of net royalty payments to reach the total payback of $75,000. As of September 30, 2023 the effective interest rate is estimated as 28.1%. The Company will account for changes in the imputed interest rate resulting from changes in forecasted net product revenue using the prospective method. The following table shows the activity within the royalty financing obligation account for the period ended September 30, 2023.
The accretion of imputed interest expense is reflected as interest expense in the unaudited condensed consolidated statements of loss.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax provision was $89 for the three months ended September 30, 2023, resulting in an effective tax rate of (0.2)%. The income tax provision was $70 for the three months ended September 30, 2022 resulting in an effective tax rate of (0.3)%. The income tax benefit was $401 for the nine months ended September 30, 2023, resulting in an effective tax rate of 0.3%. The income tax provision was $25,940 for the nine months ended September 30, 2022 resulting in an effective tax rate of (30.9)%. The change in the effective income tax rate for the nine months ended September 30, 2023, as compared to the prior period in 2022, is primarily driven by the valuation allowances recorded against net deferred tax assets established in the second quarter of 2022. The Company's cumulative loss position was significant negative evidence in assessing the need for a valuation allowance on its deferred tax assets. Given the weight of objectively verifiable historical losses from operations, the Company recorded a full valuation allowance on its deferred tax assets. The Company will be able to reverse the valuation allowance when it has shown its ability to generate taxable income on a consistent basis in future periods. The valuation allowance does not have an impact on the Company's ability to utilize any net operating losses or other tax attributes to offset cash taxes payable as these items are still eligible to be used.
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Other Assets and Liabilities |
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Other Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets and Liabilities | Other Assets and Liabilities Various other assets and liabilities are summarized as follows:
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Net Loss Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding during each period. Diluted net loss per share is calculated by dividing net loss - diluted by the diluted number of shares outstanding during each period. Except where the result would be anti-dilutive to net loss, diluted net loss per share would be calculated assuming the impact of the conversion of the February 2023 Notes and the October 2023 Notes ( the “2023 Notes”), the conversion of the Company’s preferred shares, the exercise of outstanding equity compensation awards, and ordinary shares expected to be issued under the Company’s Employee Share Purchase Plan (“ESPP”). The Company has a choice to settle the conversion obligations under the 2023 Notes in cash, shares or any combination of the two. The Company utilizes the if-converted method to reflect the impact of the conversion of the 2023 Notes, unless the result is anti-dilutive. This method assumes the conversion of the 2023 Notes into shares of the Company’s ordinary shares and reflects the elimination of the interest expense related to the 2023 Notes. The dilutive effect of the stock options, restricted stock units, preferred shares and ordinary shares expected to be issued under the Company’s ESPP has been calculated using the treasury stock method. A reconciliation of basic and diluted net loss per share, together with the related shares outstanding, in thousands, is as follows:
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Comprehensive Loss |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Loss | Comprehensive Loss The following table shows the components of accumulated other comprehensive loss for the three and nine months ended September 30, 2023 and 2022, respectively, net of tax effects:
The effect on the Company’s unaudited condensed consolidated financial statements of amounts reclassified out of accumulated other comprehensive loss was immaterial for all periods presented.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is subject to potential liabilities generally incidental to its business arising out of present and future lawsuits and claims related to product liability, personal injury, contract, commercial, intellectual property, tax, employment, compliance and other matters that arise in the ordinary course of business. The Company accrues for potential liabilities when it is probable that future costs (including legal fees and expenses) will be incurred and such costs can be reasonably estimated. At September 30, 2023 and December 31, 2022, there were no contingent liabilities with respect to any litigation, arbitration or administrative or other proceeding that are reasonably likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, cash flows or liquidity. First Jazz Complaint On May 12, 2021, Jazz Pharmaceuticals, Inc. (“Jazz”) filed a formal complaint (the “First Complaint”) initiating a lawsuit in the United States District Court for the District of Delaware (the “Court”) against Avadel Pharmaceuticals plc, Avadel US Holdings, Inc., Avadel Management Corporation, Avadel Legacy Pharmaceuticals, LLC, Avadel Specialty Pharmaceuticals, LLC, and Avadel CNS Pharmaceuticals, LLC (collectively, the “Avadel Parties”). In the First Complaint, Jazz alleges the sodium oxybate product (“Proposed Product”) described in the NDA owned by Avadel CNS Pharmaceuticals, LLC (“Avadel CNS”) will infringe at least one claim of U.S. Patent No. 8731963, 10758488, 10813885, 10959956 and/or 10966931 (collectively, the “patents-in-suit”). The First Complaint further includes typical relief requests such as preliminary and permanent injunctive relief, monetary damages and attorneys’ fees, costs and expenses. On June 3, 2021, the Avadel Parties timely filed their Answer and Counterclaims (the “Avadel Answer”) with the Court in response to the First Complaint. The Avadel Answer generally denies the allegations set forth in the First Complaint, includes numerous affirmative defenses (including, but not limited to, non-infringement and invalidity of the patents-in-suit), and asserts a number of counterclaims seeking i) a declaratory judgment of non-infringement of each patent-in-suit, and ii) a declaratory judgment of invalidity of each patent-in-suit. On June 18, 2021, Jazz filed its Answer (“Jazz Answer”) with the Court in response to the Avadel Answer. The Jazz Answer generally denies the allegations set forth in the Avadel Answer and sets forth a single affirmative defense asserting that Avadel has failed to state a claim for which relief can be granted. On June 21, 2021, the Court issued an oral order requiring the parties to i) confer regarding proposed dates to be included in the Court’s scheduling order for the case, and ii) submit a proposed order, including a proposal for the length and timing of trial, to the Court by no later than July 21, 2021. On July 30, 2021, the Court issued a scheduling order establishing timing for litigation events including i) a claim construction hearing date of August 2, 2022, and ii) a trial date of October 30, 2023. On October 18, 2021, consistent with the scheduling order, Jazz filed a status update with the Court indicating that Jazz did not intend to file a preliminary injunction with the Court at this time. Jazz further indicated that it would provide the Court with an update regarding whether preliminary injunction proceedings may be necessary after receiving further information regarding the FDA’s action on Avadel CNS’s NDA. On January 4, 2022, the Court entered an agreed order dismissing this case with respect to Avadel Pharmaceuticals plc, Avadel US Holdings, Inc., Avadel Specialty Pharmaceuticals, LLC, Avadel Legacy Pharmaceuticals, LLC, and Avadel Management Corporation. A corresponding order was entered in the two below cases on the same day. On February 25, 2022, Jazz filed an amended Answer to the Avadel Parties’ Counterclaims (“the Jazz First Amended Answer”). The Jazz First Amended Answer is substantially similar to the Jazz Answer except insofar as it adds an affirmative defense for judicial estoppel and unclean hands. Corresponding amended answers were filed in the two below cases on the same day. On June 23, 2022, Avadel CNS filed a Renewed Motion for Judgment on the Pleadings, with respect to its counterclaim against Jazz seeking to have U.S. Patent No. 8731963 (the “REMS Patent”) delisted from the Orange Book and seeking to have the motion resolved concurrent with the parties’ Markman hearing on August 31, 2022. On July 7, 2022, Jazz filed a response styled as Objections to Avadel CNS’ Motion for Judgment on the Pleadings. On July 14, 2022, Avadel CNS replied to Jazz’s response, and on July 21, 2022, Avadel CNS requested oral argument on its delisting motion simultaneous with the Markman hearing. On August 24, 2022, the Court ordered Jazz to respond substantively to Avadel CNS’ motion, which Jazz did on August 26, 2022. Avadel CNS filed its reply on August 28, 2022. On August 23, 2022, the Markman hearing was postponed. On September 7, 2022, the case was reassigned to a new judge, and the Markman hearing was held on October 25, 2022. At the Markman hearing, Avadel CNS reiterated its request for an expedited hearing on the Renewed Motion for Judgment on the Pleadings for the delisting of the REMS Patent. On October 28, 2022, the Court granted Avadel CNS’ request and scheduled the hearing for November 15, 2022. The Court held the Markman hearing on November 15, 2022 and issued a claim construction ruling on November 18, 2022. Also on November 18, 2022 the Court granted Avadel’s Renewed Motion for Judgment on the Pleadings and ordered Jazz to request delisting of the REMS Patent from the Orange Book. On November 22, 2022, Jazz appealed that decision and on December 14, 2022, the Federal Circuit issued a stay of the delisting order until further notice. Oral argument was held February 14, 2023. On February 24, 2023, the United States Court of Appeals for the Federal Court affirmed the previous ruling from the Court, ordering the delisting of the REMS Patent from the Orange Book, which has since occurred. On March 7, 2023, in response to a joint stipulation filed by the parties, the Court issued an order dismissing Jazz’s infringement claims against the Avadel Parties relating to the REMS Patent as well as Avadel Parties’ noninfringement and invalidity counterclaims relating to the REMS Patent. On March 15, 2023, the parties submitted a Stipulation and Proposed Order Modifying the Case Schedule to accommodate additional claim construction proceedings. That stipulation remains pending before the Court. On April 26, 2023, the parties filed their Supplemental Joint Claim Construction Brief. On July 3, 2023, the Court issued a modified scheduling order establishing a new trial date of February 26, 2024. On July 21, 2023, in response to a Court order, the parties submitted a Stipulation and Proposed Order Modifying the Case Schedule with an updated proposed schedule to accommodate additional claim construction proceedings. On August 4, 2023, the Court entered a modified version of the parties’ proposed schedule, which was revised on August 28, 2023. The parties’ Second Supplemental Joint Claim Construction Brief was filed on October 10, 2023, and a Markman hearing regarding the disputed terms occurred on November 1, 2023. On August 15, 2023, Avadel renewed its request to consolidate this litigation with the litigation described in the Avadel Complaint below. Second Jazz Complaint On August 4, 2021, Jazz filed another formal complaint (the “Second Complaint”) initiating a lawsuit in the Court against the Avadel Parties. In the Second Complaint, Jazz alleges the Proposed Product described in the NDA owned by Avadel CNS will infringe at least one claim of U.S. Patent No. 11077079. The Second Complaint further includes typical relief requests such as preliminary and permanent injunctive relief, monetary damages and attorneys’ fees, costs and expenses. On September 9, 2021, the Avadel Parties timely filed their Answer and Counterclaims (the “Second Avadel Answer”) with the Court in response to the Second Complaint. The Second Avadel Answer generally denies the allegations set forth in the Second Complaint, includes numerous affirmative defenses (including, but not limited to, non-infringement and invalidity of the patent-in-suit), and asserts a number of counterclaims seeking i) a declaratory judgment of non-infringement of the patent-in-suit, and ii) a declaratory judgment of invalidity of the patent-in-suit. On October 22, 2021, the Court issued an oral order stating that this case should proceed on the same schedule as the case filed on May 12, 2021. On September 7, 2022, the case was reassigned to a new judge. Third Jazz Complaint On November 10, 2021, Jazz filed another formal complaint (the “Third Complaint”) initiating a lawsuit in the Court against the Avadel Parties. In the Third Complaint, Jazz alleges the Proposed Product described in the NDA owned by Avadel CNS will infringe at least one claim of U.S. Patent No. 11147782. The Third Complaint further includes typical relief requests such as preliminary and permanent injunctive relief, monetary damages and attorneys’ fees, costs and expenses. This case will proceed on the same schedule as the cases associated with the First and Second Complaints above. On December 21, 2021, the Court entered a revised schedule for the First, Second and Third Complaints, setting a new claim construction date of August 31, 2022. On January 7, 2022, Avadel CNS timely filed its Answer and Counterclaims (the “Third Avadel Answer”) with the Court in response to the Third Complaint. The Third Avadel Answer generally denies the allegations set forth in the Third Complaint, includes numerous affirmative defenses (including, but not limited to, non-infringement and invalidity of the patent-in-suit), and asserts a number of counterclaims seeking i) a declaratory judgment of non-infringement of the patent-in-suit, and ii) a declaratory judgment of invalidity/unenforceability of the patent-in-suit. On September 7, 2022, the case was reassigned to a new judge. Fourth Jazz Complaint On July 15, 2022, Jazz filed another formal complaint (the “Fourth Complaint”) initiating a lawsuit in the Court against Avadel CNS. In the Fourth Complaint, Jazz alleges the Proposed Product described in the NDA owned by Avadel CNS will infringe at least one claim of the REMS Patent, which was asserted in the First Complaint. The FDA required Avadel CNS to file a Paragraph IV certification against the REMS Patent, which Avadel CNS did under protest, consistent with its Renewed Motion for Judgment on the Pleadings for the delisting of the REMS Patent from the Orange Book, which was later ordered to be delisted in the above First Jazz Complaint action. Avadel CNS provided the required notice of its Paragraph IV certification to Jazz, and Jazz reasserted the REMS Patent in a separate action following receipt of that notice. The Fourth Complaint further includes typical relief requests such as preliminary and permanent injunctive relief, monetary damages and attorneys’ fees, costs and expenses. On September 7, 2022, the case was reassigned to a new judge. On September 21, 2022, Jazz served the Fourth Complaint. On October 21, 2022, Avadel CNS timely filed its Answer and Counterclaims (the “Fourth Avadel Answer”) with the Court in response to the Fourth Complaint. The Fourth Avadel Answer generally denies the allegations set forth in the Fourth Complaint, includes numerous affirmative defenses (including, but not limited to, non-infringement and invalidity of the patent-in-suit), and asserts a number of counterclaims for i) a declaratory judgment of non-infringement of the patent-in-suit, ii) a declaratory judgment of invalidity/unenforceability of the patent-in-suit, iii) delisting of the patent-in-suit from the Orange Book; iv) monopolization under the Sherman Antitrust Act of 1890 (the “Sherman Act”); and v) attempted monopolization under the Sherman Act. On December 9, 2022, Jazz filed a Motion to Dismiss Avadel’s Antitrust Counterclaims. Avadel filed its opposition brief on December 27, 2022, and Jazz filed its reply brief on January 6, 2022. On January 11, 2023, Avadel filed a request for oral argument on the motion, which is still pending. On March 6, 2023, the parties filed a stipulation of dismissal, dismissing Jazz’s claims with respect to the REMS Patent and Avadel CNS’s related non-infringement and invalidity counterclaims. The Court entered that stipulation on March 7, 2023. On May 19, 2023, the Court issued a scheduling order establishing timing for litigation events including i) completion of fact discovery by March 14, 2024, and ii) a deadline for case dispositive motions of September 20, 2024. On June 29, 2023, Jazz filed a Motion to Stay the case, pending resolution of its Motion to Dismiss. Briefing on that Motion to Stay closed on August 10, 2023. Avadel Complaint On April 14, 2022, Avadel CNS and Avadel Pharmaceuticals plc (collectively the “Avadel Plaintiffs”) filed a formal complaint (the “Avadel Complaint”) initiating a lawsuit in the Court against Jazz and Jazz Pharmaceuticals Ireland Ltd. (collectively, the “Jazz Parties”). In the Avadel Complaint, the Avadel Plaintiffs allege that the Jazz Parties breached certain confidential disclosure agreements and misappropriated certain of the Avadel Plaintiffs’ trade secrets. The Avadel Complaint further includes typical relief requests such as injunctive relief, monetary damages and attorneys’ fees, costs and expenses, as well as seeking correction of inventorship of certain Jazz patents, for which the Jazz Parties claim ownership, to include former Avadel Plaintiffs’ scientists. On June 2, 2022, Jazz answered the Avadel Complaint. The Answer generally denies the allegations set forth in the Avadel Complaint and includes various affirmative defenses. On July 8, 2022, Jazz filed a Motion for Judgment on the Pleadings seeking to have all Counts dismissed for failure to state a claim upon which relief can be granted. The Avadel Plaintiffs’ response to that Motion was filed with the Court on July 29, 2022. Jazz’s reply was filed with the Court on August 5, 2022. On February 2, 2023, the Court held a hearing on Jazz’s Motion for Judgment on the Pleadings. On September 7, 2022, the case was reassigned to a new judge. On February 2, 2023, the Court held a hearing on Jazz’s Motion for Judgment on the Pleadings. On July 18, 2023, the Court denied Jazz’s Motion for Judgment on the Pleadings. On August 15, 2023, the parties submitted competing proposed scheduling orders, and Avadel requested consolidation with the above First Jazz Complaint litigation. That request for consolidation was denied on November 3, 2023. Jazz’s Administrative Procedure Act Complaint On June 22, 2023, Jazz filed an Administrative Procedure Act suit against the FDA, the U.S. Department of Health and Human Services, the Secretary of Health and Human Services and the Commissioner of Food and Drugs (the “Federal Defendants”) in the United States District Court for the District of Columbia (the “DC Court”) related to the NDA for LUMRYZ. This suit alleges that the FDA’s approval of LUMRYZ was an unlawful agency action and asks the DC Court to set aside FDA’s approval of LUMRYZ. On June 28, 2023, the DC Court granted Avadel CNS’s unopposed motion to intervene in the case to defend the FDA’s decision. On August 14, 2023, the Court entered a scheduling order establishing timing for litigation events including early summary judgment briefing closing December 22, 2023. On September 22, 2023, Jazz filed its Motion for Summary Judgment. On October 20, 2023, FDA and Avadel filed their Cross Motions for Summary Judgment. Material Commitments Other than commitments disclosed in Note 11: Contingent Liabilities and Commitments to the Company's consolidated financial statements included in the 2022 Annual Report on Form 10-K, there were no other material commitments outside of the normal course of business. Guarantees The fair values of the Company’s guarantee to Deerfield Capital L.P. (“Deerfield”) and the guarantee received by the Company from Armistice Capital Master Fund, Ltd. largely offset and when combined are not material. Deerfield Guarantee In connection with the Company’s February 2018 divestiture of its pediatric assets, including four pediatric commercial stage assets – Karbinal™ ER, Cefaclor, Flexichamber™ and AcipHex® Sprinkle™ (“FSC products”), to Cerecor, Inc. (“Cerecor”), the Company guaranteed to Deerfield a quarterly royalty payment of 15% on net sales of the FSC products through February 6, 2026 (“FSC Product Royalties”), in an aggregate amount of up to approximately $10,300. Given the Company’s explicit guarantee to Deerfield, the Company recorded the guarantee in accordance with ASC 460. The balance of this guarantee liability was $570 at September 30, 2023. This liability is being amortized proportionately based on undiscounted cash outflows through the remainder of the contract with Deerfield. Armistice Guarantee In connection with the Company’s February 2018 divestiture of the pediatric assets, Armistice Capital Master Fund, Ltd., the majority shareholder of Cerecor, guaranteed to the Company the FSC Product Royalties. The Company recorded the guarantee in accordance with ASC 460. The balance of this guarantee asset was $564 at September 30, 2023. This asset is being amortized proportionately based on undiscounted cash outflows through the remainder of the contract with Deerfield noted above.
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsThe Issuer settled, with a combination of cash and ADSs, the remaining $21,187 aggregate principal amount of the October 2023 Notes in October 2023. The aggregate amount of cash and ADSs delivered to holders for the October 2023 Notes and accrued and unpaid interest was $21,641 and 408 ADSs, respectively. |
Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
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Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||||||
Net loss | $ (36,274) | $ (64,432) | $ (30,784) | $ (20,146) | $ (63,444) | $ (26,424) | $ (131,490) | $ (110,014) |
Insider Trading Arrangements |
3 Months Ended |
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Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations. Avadel Pharmaceuticals plc (Nasdaq: AVDL) (“Avadel,” the “Company,” “we,” “our,” or “us”) is a biopharmaceutical company. The Company is registered as an Irish public limited company. The Company’s headquarters are in Dublin, Ireland with operations in Dublin, Ireland and St. Louis, Missouri, United States (“U.S.”). LUMRYZ, formally known as FT218, is an extended-release formulation of sodium oxybate indicated to be taken once at bedtime for the treatment of cataplexy or excessive daytime sleepiness (“EDS”) in adults with narcolepsy. LUMRYZ was approved by the U.S. Food and Drug Administration (“FDA”) on May 1, 2023. The FDA also granted Orphan Drug Exclusivity (“ODE”) to LUMRYZ for a period of seven years until May 1, 2030. In June 2023, the Company commercially launched LUMRYZ in the U.S. In approving LUMRYZ, the FDA approved a risk evaluation and mitigation strategy (“REMS”) for LUMRYZ to help ensure that the benefits of the drug in the treatment of cataplexy and EDS in narcolepsy outweigh the risks of serious adverse outcomes resulting from inappropriate prescribing, misuse, abuse, and diversion of the drug. Under this REMS, healthcare providers, pharmacies, practitioners, or health care settings that dispense the drug must be specially certified and the drug must be dispensed to patients with documentation of safe use conditions. As of the date of this Quarterly Report, the Company’s only commercialized product is LUMRYZ. The Company continues to evaluate opportunities to expand its product portfolio.
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Liquidity | Liquidity. The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. |
Basis of Presentation | Basis of Presentation. The unaudited condensed consolidated balance sheet as of September 30, 2023, which is derived from the prior year 2022 audited consolidated financial statements, and the interim unaudited condensed consolidated financial statements presented herein, have been prepared in accordance with U.S. GAAP, the requirements of Form 10-Q and Article 10 of Regulation S-X and, consequently, do not include all information or footnotes required by U.S. GAAP for complete financial statements or all the disclosures normally made in an Annual Report on Form 10-K. Accordingly, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s 2022 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”) on March 29, 2023. |
Reclassifications | ReclassificationsCertain reclassifications are made to prior year amounts whenever necessary to conform with the current year presentation. Certain reclassifications have been made to balances within the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and Note 9: Other Assets and Liabilities for the year ended December 31, 2022 to condense line items of the same nature into a single line. |
Revenue | Revenue. Revenue includes sales of LUMRYZ. ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when the performance obligations to the customer have been satisfied through the transfer of control of the goods or services. To determine the appropriate revenue recognition for arrangements that the Company believes are within the scope of ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to contracts only when the Company and its customer’s rights and obligations under the contract can be determined, the contract has commercial substance, and it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. For contracts that are determined to be within the scope of ASC 606, the Company identifies the promised goods or services in the contract to determine if they are separate performance obligations or if they should be bundled with other goods and services into a single performance obligation. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Product Sales The Company sells LUMRYZ to specialty pharmacies and considers those specialty pharmacies to be its customers. Under ASC 606, revenue from product sales is recognized when the customer obtains control of the product, which occurs typically upon receipt by the customer. The Company’s gross product sales are subject to a variety of price adjustments to arrive at reported net product revenue. These adjustments include estimates of payment discounts, specialty pharmacy fees, patient financial assistance programs, rebates and product returns and are estimated based on contractual arrangements, historical trends, expected utilization of such products and other judgments and analysis. Reserves for Variable ConsiderationRevenues from product sales are recorded at the estimated net selling price, which includes reserves for estimated variable consideration to reduce gross product sales to net product revenue resulting from payment discounts, specialty pharmacy fees, patient financial assistance programs, rebates and product returns. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable if the amount is payable to the customer. The reserves are classified as a liability if the amount is payable to a party other than a customer. Where appropriate, these estimated reserves take into consideration relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, historical trends, current and expected patient demand and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates to reduce gross selling price to net selling price. The actual net selling price ultimately may differ from our estimates.
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Inventories | Inventories. Inventories consist of raw materials, work in process and finished products, which are stated at lower of cost or net realizable value, using the first-in, first- out (“FIFO”) method. Raw materials used in the production of pre-clinical and clinical products are expensed as research and development (“R&D”) costs. The Company establishes reserves for inventory estimated to be obsolete, unmarketable or slow-moving on a case by case basis. The Company capitalizes inventory costs associated with products when future commercialization is considered probable and the future economic benefit is expected to be realized, which is typically when regulatory approval is obtained for a drug candidate. As such, the Company began capitalizing costs related to inventory in May 2023 upon FDA approval of LUMRYZ. Manufacturing costs associated with inventory purchased or produced prior to FDA approval were recorded as research and development expense in prior periods. Accordingly, cost of products sold in the near term will likely be lower than in later periods given the sales of pre-approval inventory will carry little to no manufacturing costs given such costs were previously expensed to research and development expense.
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Percentage of Total Sales to Customers | The following table presents a summary of the percentage of total sales to customers:
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Fair Value Measurement (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes the financial instruments measured at fair value on a recurring basis classified in the fair value hierarchy (Level 1, 2 or 3) based on the inputs used for valuation in the accompanying unaudited condensed consolidated balance sheets:
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Marketable Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities | The following tables show the Company’s available-for-sale securities’ adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category as of September 30, 2023 and December 31, 2022, respectively:
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Schedule of Contractual Maturity Dates | The following table summarizes the estimated fair value of the Company’s investments in marketable debt securities, accounted for as available-for-sale debt securities and classified by the contractual maturity date of the securities as of September 30, 2023:
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Principal Categories of Inventories | The principal categories of inventories at September 30, 2023 were comprised of the following:
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Long-term debt is summarized as follows:
The following table shows the activity within the royalty financing obligation account for the period ended September 30, 2023.
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Royalty Financing Obligation (Tables) |
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Schedule of Royalty Financing Obligation | Long-term debt is summarized as follows:
The following table shows the activity within the royalty financing obligation account for the period ended September 30, 2023.
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Other Assets and Liabilities (Tables) |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepaid Expenses and Other Current Assets | Various other assets and liabilities are summarized as follows:
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Schedule of Other Non-Current Assets |
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Schedule of Accrued Expenses |
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Schedule of Other Current Liabilities |
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Schedule of Other Non-Current Liabilities |
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Net Loss Per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Basic and Diluted Net Loss Per Share | A reconciliation of basic and diluted net loss per share, together with the related shares outstanding, in thousands, is as follows:
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Comprehensive Loss (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Accumulated Other Comprehensive Loss | The following table shows the components of accumulated other comprehensive loss for the three and nine months ended September 30, 2023 and 2022, respectively, net of tax effects:
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Revenue Recognition (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Concentration Risk [Line Items] | ||||
Net product revenue | $ 7,014,000 | $ 0 | $ 8,510,000 | $ 0 |
Three Customers | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percent | 100.00% | 100.00% | ||
Accredo | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percent | 38.00% | 38.00% | ||
Caremark | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percent | 41.00% | 41.00% | ||
Optum | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percent | 21.00% | 21.00% |
Fair Value Measurement - Narrative (Details) - Senior Notes - 4.50% Exchangeable Senior Notes Due October 2023 - USD ($) $ in Thousands |
Sep. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt | $ 21,187 | $ 117,375 | $ 117,375 |
Estimated fair value of long-term debt | $ 21,187 |
Marketable Securities - Summary of Available-for-sale Securities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Adjusted Cost | $ 102,747 | $ 24,407 |
Unrealized Gains | 830 | 0 |
Unrealized Losses | (2,209) | (1,889) |
Fair Value | 101,368 | 22,518 |
Mutual and money market funds | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Adjusted Cost | 16,497 | 24,407 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (2,209) | (1,889) |
Fair Value | 14,288 | $ 22,518 |
Government securities - U.S. | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Adjusted Cost | 86,250 | |
Unrealized Gains | 830 | |
Unrealized Losses | 0 | |
Fair Value | $ 87,080 |
Marketable Securities - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Investments, Debt and Equity Securities [Abstract] | ||||
Marketable securities, realized gain | $ 268 | $ 64 | $ 269 | $ 372 |
Marketable securities, realized loss | $ 283 | $ 61 | $ 344 | $ 1,092 |
Marketable Securities - Schedule of Contractual Maturity Dates (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Total | $ 101,368 | $ 22,518 |
Total | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 1 Year | 87,080 | |
1-5 Years | 0 | |
5-10 Years | 0 | |
Greater than 10 Years | 0 | |
Total | 87,080 | |
Government securities - U.S. | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 1 Year | 87,080 | |
1-5 Years | 0 | |
5-10 Years | 0 | |
Greater than 10 Years | 0 | |
Total | $ 87,080 |
Inventories (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 2,591,000 | |
Work in process | 299,000 | |
Finished goods | 2,396,000 | |
Total | $ 5,286,000 | $ 0 |
Royalty Financing Obligation - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Aug. 01, 2023 |
Mar. 29, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Debt Instrument [Line Items] | ||||
Maximum proceeds from royalty financing | $ 75,000 | |||
Proceeds from royalty purchase agreement | $ 30,000 | $ 0 | ||
Quarterly net revenue target for royalty financing | $ 25,000 | |||
Quarterly royalty payments for royalty financing, percentage | 3.75% | |||
Royalty Financing | ||||
Debt Instrument [Line Items] | ||||
Proceeds from royalty purchase agreement | $ 30,000 | $ 30,000 | ||
Effective interest rate | 28.10% |
Royalty Financing Obligation - Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 01, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Debt Instrument, Increase (Decrease), Net [Roll Forward] | ||||||
Receipt of the first tranche of the royalty financing obligation | $ 30,000 | $ 0 | ||||
Accretion of imputed interest expense on royalty financing obligation | $ 1,978 | $ 3,564 | 7,532 | $ 9,087 | ||
Less: royalty payable to RTW classified within accrued expenses | 21,187 | 21,187 | $ 37,668 | |||
Royalty Financing | ||||||
Debt Instrument, Increase (Decrease), Net [Roll Forward] | ||||||
Royalty financing obligation – beginning balance | 0 | |||||
Receipt of the first tranche of the royalty financing obligation | $ 30,000 | 30,000 | ||||
Accretion of imputed interest expense on royalty financing obligation | 1,404 | |||||
Royalty financing obligation – ending balance | 31,404 | 31,404 | ||||
Less: royalty payable to RTW classified within accrued expenses | 253 | 253 | ||||
Royalty financing obligation, non-current | $ 31,151 | $ 31,151 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax provision (benefit) | $ 89 | $ 70 | $ (401) | $ 25,940 |
Effective income tax rate | (0.20%) | (0.30%) | 0.30% | (30.90%) |
Other Assets and Liabilities - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Prepaid Expenses and Other Current Assets: | ||
Prepaid and other expenses | $ 5,504 | $ 1,523 |
Other | 779 | 504 |
Income tax receivable | 69 | 69 |
Total | $ 6,352 | $ 2,096 |
Other Assets and Liabilities - Other Non-Current Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Non-Current Assets: | ||
Right of use assets at contract manufacturing organizations, net | $ 9,804 | $ 10,686 |
Other | 344 | 636 |
Total | $ 10,148 | $ 11,322 |
Other Assets and Liabilities - Accrued Expenses (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Accrued Expenses: | ||
Accrued professional fees | $ 10,092 | $ 4,040 |
Accrued compensation | 6,068 | 1,613 |
Reserves for variable consideration | 1,347 | 0 |
Royalty payable to RTW | 253 | 0 |
Accrued outsource contract costs | 197 | 1,208 |
Accrued restructuring | 0 | 473 |
Total | $ 17,957 | $ 7,334 |
Other Assets and Liabilities - Other Current Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Current Liabilities: | ||
Accrued interest | $ 462 | $ 1,649 |
Other | 269 | 292 |
Total | $ 731 | $ 1,941 |
Other Assets and Liabilities - Other Non-Current Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Non-Current Liabilities: | ||
Tax liabilities | $ 5,508 | $ 5,246 |
Other | 310 | 497 |
Total | $ 5,818 | $ 5,743 |
Net Loss Per Share - Schedule of Reconciliation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||||||
Net loss | $ (36,274) | $ (64,432) | $ (30,784) | $ (20,146) | $ (63,444) | $ (26,424) | $ (131,490) | $ (110,014) |
Weighted average shares: | ||||||||
Basic shares (in shares) | 89,380 | 60,201 | 76,931 | 59,359 | ||||
Effect of dilutive securities - employee and director equity awards outstanding, preferred shares and 2023 Notes (in shares) | 0 | 0 | 0 | 0 | ||||
Diluted shares (in shares) | 89,380 | 60,201 | 76,931 | 59,359 | ||||
Net loss per share - basic (in dollars per share) | $ (0.41) | $ (0.33) | $ (1.71) | $ (1.85) | ||||
Net loss per share - diluted (in dollars per share) | $ (0.41) | $ (0.33) | $ (1.71) | $ (1.85) |
Net Loss Per Share - Narrative (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Potential ordinary shares excluded from the computation of weighted average shares (in shares) | 2,509 | 18,722 | 5,336 | 18,925 |
Commitments and Contingencies (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Loss Contingencies [Line Items] | |
Percentage of royalty payable on net sales | 15.00% |
Guarantee, liability | $ 570 |
Guarantee from Armistice | 564 |
Maximum | |
Loss Contingencies [Line Items] | |
Guarantee, liability | $ 10,300 |
Subsequent Events (Details) - USD ($) shares in Thousands, $ in Thousands |
1 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 26, 2023 |
Oct. 31, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|
Subsequent Event [Line Items] | ||||||
Cash settlement of notes | $ 17,500 | $ 0 | ||||
Number of ADSs issued upon settlement/ conversion (in shares) | 12,347 | |||||
Subsequent Event | American Depositary Shares | ||||||
Subsequent Event [Line Items] | ||||||
Number of ADSs issued upon settlement/ conversion (in shares) | 408 | |||||
4.50% Exchangeable Senior Notes Due October 2023 | Senior Notes | ||||||
Subsequent Event [Line Items] | ||||||
Long-term debt | $ 21,187 | $ 117,375 | $ 117,375 | |||
4.50% Exchangeable Senior Notes Due October 2023 | Senior Notes | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Cash settlement of notes | $ 21,641 |
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