Loss per Share

The following table sets forth the computation of basic and diluted loss per share for the three and nine months ended September 30, 2015 and 2014:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(in thousands, except per share amounts)
Basic and diluted
Net loss attributable to The Medicines Company	$	(105,132	)	$	(16,736	)	$	(146,690	)	$	(26,889	)

Weighted average common shares outstanding, basic	67,137			64,534			66,079			64,363
Plus: net effect of dilutive stock options, restricted common shares and shares issuable upon conversion of convertible senior notes due 2017	—			—			—			—
Weighted average common shares outstanding, diluted	67,137			64,534			66,079			64,363

Loss per share attributable to The Medicines Company, basic	$	(1.57	)	$	(0.26	)	$	(2.22	)	$	(0.42	)
Loss per share attributable to The Medicines Company, diluted	$	(1.57	)	$	(0.26	)	$	(2.22	)	$	(0.42	)

Basic income (loss) per share is computed by dividing consolidated net loss by the weighted average number of shares of common stock outstanding during the period, excluding unvested restricted common shares. The number of potentially dilutive common shares equivalents is calculated using the treasury stock method.

For periods of net income when the effects are not anti-dilutive, diluted earnings per share is computed by dividing the Company's net income by the weighted average number of shares outstanding and the impact of all potential dilutive common shares, consisting primarily of stock options, unvested restricted common stock, shares issuable upon conversion of convertible senior notes due 2017 and 2022 and stock purchase warrants. The number of potentially dilutive common share equivalents is calculated using the treasury stock method. For periods of net loss, diluted loss per share is calculated similar to basic loss per share as the effect of including all potentially dilutive common share equivalents is anti-dilutive.

In August 2015, the Company issued 944,537 shares of its common stock in a private placement. Cash received from the August 2015 private placement totaled $30.0 million and is included within the financing activities section of the accompanying consolidated statements of cash flows. These shares are included in the Company's weighted average number of common stock outstanding.

For the three and nine months ended September 30, 2015, options to purchase 1,737,569 shares and 1,454,852 shares, respectively, of common stock that could potentially dilute basic loss per share in the future were excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive. For the three and nine months ended September 30, 2014, options to purchase 1,280,612 shares and 1,611,940 shares, respectively, of common stock that could potentially dilute basic loss per share in the future were excluded from the calculation of diluted loss per share as their effect would have been anti-dilutive.

For the three and nine months ended September 30, 2015, there were 257,819 and 264,206 shares, respectively, of unvested restricted stock excluded from the calculation of diluted loss per common share as their effect would be anti-dilutive. For the three and nine months ended September 30, 2014, there were 252,943 and 286,867 shares, respectively, of unvested restricted stock excluded from the calculation of diluted loss per share.

In January 2015, the Company issued, at par value, $400.0 million aggregate principal amount of 2.5% convertible senior notes due 2022 (the 2022 Notes) (see note 10, Convertible Senior Notes). The conversion rate for the 2022 Notes was initially, and remains 29.8806 shares of the Company’s common stock per $1,000 principal amount of the 2022 Notes, which is equivalent to an initial conversion price of approximately $33.47 per share of the Company’s common stock. For the three and nine months ended September 30, 2015, the number of shares issuable upon conversion and excluded from the calculation of diluted loss per share was 555,859 and 185,286, respectively.

In June 2012, the Company issued, at par value, $275.0 million aggregate principal amount of 1.375% convertible senior notes due June 1, 2017 (the 2017 Notes) (see note 10, Convertible Senior Notes). In connection with the issuance of the 2017 Notes, the Company entered into convertible note hedge transactions with respect to its common stock (the 2017 Note Hedges) with several of the initial purchasers of the 2017 Notes, their affiliates and other financial institutions (the 2017 Hedge Counterparties). The options that are part of the 2017 Note Hedges are not considered for purposes of calculating the total shares outstanding under the basic and diluted net income per share, as their effect would be anti-dilutive. The 2017 Note Hedges are expected generally to reduce the potential dilution with respect to shares of the Company's common stock upon any conversion of the Notes in the event that the market price per share of the Company's common stock, as measured under the terms of the 2017 Note Hedges, is greater than the strike price of the 2017 Note Hedges, which initially corresponded to the conversion price of the 2017 Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the 2017 Notes. The number of shares of common stock issuable upon conversion of the 2017 Notes and excluded from the calculation of diluted loss per share for the three and nine months ended September 30, 2015 was 2,011,844 and 689,195, as their effect would be anti-dilutive.

In addition, in connection with the 2017 Note Hedges, the Company entered into warrant transactions with the 2017 Hedge Counterparties, pursuant to which the Company sold warrants (the 2017 Warrants) to the Hedge Counterparties to purchase, subject to customary anti-dilution adjustments, up to 9.8 million shares of the Company's common stock at a strike price of $34.20 per share. For the three and nine months ended September 30, 2015, the shares of common stock issuable upon the exercise of the warrants excluded from the calculation of diluted loss per share was 253,146 and 84,382. The 2017 Warrants will have a dilutive effect with respect to the Company's common stock to the extent that the market price per share of the Company's common stock, as measured under the terms of the 2017 Warrants, exceeds the applicable strike price of the 2017 Warrants. However, subject to certain conditions, the Company may elect to settle all of the 2017 Warrants in cash.