Restructuring Costs and Other, Net

3 Months Ended

Mar. 31, 2013

Restructuring and Related Activities [Abstract]

On February 27, 2013, the Company commenced a workforce reduction plan intended to improve efficiency and better align its costs and employment structure with its strategic plans. As a result of the workforce reduction, the Company reduced its personnel by 66 employees. Upon signing release agreements, affected employees received severance payments and fully paid health care coverage and outplacement services for specified periods. The Company completed this workforce reduction in March 2013.

The Company recorded, in the aggregate, one-time charges of $6.3 million associated with the workforce reduction. The Company recorded these charges in cost of revenue, research and development expense and selling general and administrative expense based on the responsibilities of the affected employees. Of the charges related to the 2013 workforce reduction, $0.1 million were non-cash charges, the Company paid $1.8 million during the three months ended March 31, 2013 and the Company expects to pay out $4.3 million during the remainder of 2013.

In September 2011, the Company commenced the closure of its drug discovery research and development facility and operations in Leipzig, Germany and terminated ten employees at its Leipzig facility. The Company transferred active pre-clinical projects from Leipzig to its research and development facility in Montreal, Canada and the MDCO-2010 back-up compound to the clinical team in Parsippany, New Jersey. Upon signing release agreements, the terminated employees received severance and other benefits. The Company recorded, in the aggregate, charges of $2.2 million in 2011 associated with the 2011 Leipzig closure. These charges were recorded in research and development expenses in the Company's consolidated statements of income. Of these charges, $0.3 million related to asset write-offs were noncash charges. The Company paid out $0.3 million during 2011 and $0.8 million during 2012. During 2012, the Company recorded additional charges of $0.2 million relating to the 2011 Leipzig closure due the Saxony government in Leipzig recalling subsidies higher than originally estimated that were received by the Company during past three years. The Company expects to pay out $1.0 million during 2013. The Company no longer has any research employees or research capabilities in Leipzig. The Company did not record any charges relating to the 2011 Leipzig closure during the three months ended March 31, 2013.

See note 15 "Restructuring Costs and Other, Net" of the notes to the consolidated financial statements in the Company's annual report on Form 10-K for the year ended December 31, 2012 as filed with the SEC.

Details of the activities described above and the movement in the accrual during the three-month period ended March 31, 2013 are as follows:



	Balance as of December 31, 2012		Expenses, Net		Cash			Noncash			Balance as of March 31, 2013
	(in thousands)
2011 Leipzig closure other associated costs	$	1,009	$	—	$	—		—			$	1,009
Employee severance and other personnel benefits:
2013 workforce reduction	—		6,262		(1,841		)	(84		)	4,337
Total	$	1,009	$	6,262	$	(1,841	)	$	(84	)	$	5,346

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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