Dispositions

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Dispositions

Dispositions

On June 21, 2016, the Company completed the sale of its Non-Core ACC Products pursuant to the purchase and sale agreement dated May 9, 2016 by and among the Company, Chiesi USA and Chiesi.  At the completion of the sale, the Company received approximately $263.8 million in cash, which included the value of product inventory, and may receive up to an additional $480.0 million in the aggregate following the achievement of certain specified calendar year net sales milestones with respect to net sales of each of Cleviprex and Kengreal.

The following table presents the consideration received, major classes of assets sold and the gain recognized on the sale of the Non-Core ACC Products:

	(in thousands)
Sale price:
Cash	$	263,807
Contingent purchase price from sale of business	65,700
Total sale price	329,507
Assets:
Inventory	2,184
Intangibles	5,210
Goodwill	33,812
Total assets sold	41,206
Gain on sale of business	$	288,301

The Company recognized a gain on sale of business of approximately $288.3 million in 2016 in continuing operations in the accompanying consolidated statements of operations. Disposition related costs during 2016 of approximately $7.9 million for advisory, legal and regulatory fees incurred in connection with the sale of the Non-Core ACC Products were recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations. See Note 15, “Fair Value Measurements,” for further details on the contingent purchase price from sale of businesses.

Discontinued Operations

Acquisitions prior to Sale of Hemostasis Business

Recothrom

In February 2013, pursuant to a master transaction agreement with Bristol-Myers Squibb Company (BMS), the Company acquired the right to sell, distribute and market Recothrom on a global basis for the collaboration term and BMS transferred to the Company certain limited assets exclusively related to Recothrom, primarily the biologics license application for Recothrom and certain related regulatory assets. BMS also granted to the Company, under the master transaction agreement, an option to purchase from BMS and its affiliates, following the expiration or earlier termination of the collaboration term, certain other assets, including certain patent and trademark rights, contracts, inventory, equipment and related books and records, held by BMS which are exclusively related to Recothrom. On February 6, 2015, the Company completed the acquisition of the remaining assets held by BMS which were exclusively related to Recothrom. Upon closing the exercise of the option in February 2015, the Company paid BMS approximately $132.4 million in the aggregate, including approximately $44.0 million for inventory and reclassified the value of the purchase option and additional amounts paid to BMS to Developed Product Rights and commenced amortizing.

Sale of Hemostasis Business

On February 1, 2016, the Company completed the sale of its Hemostasis Business to Mallinckrodt pursuant to the purchase and sale agreement dated December 18, 2015 between the Company and Mallinckrodt. At the completion of the sale, the Company received approximately $174.1 million in cash from Mallinckrodt, and may receive up to an additional $235.0 million in the aggregate following the achievement of certain specified calendar year net sales milestones with respect to net sales of PreveLeak and Raplixa. As a result of the transaction, the Company accounted for the assets and liabilities of the Hemostasis Business that were sold as held for sale at December 31, 2015. As a result of the classification as held for sale, the Company recorded impairment charges of $133.3 million, including $24.5 million related to goodwill, to reduce the Hemostasis Business disposal group’s carrying value to its estimated fair value, less costs to sell for the year ended December 31, 2015. The determination of fair value for these assets was based on the best information available that resided within Level 3 of the fair value hierarchy, including internal cash flow estimates discounted at an appropriate interest rate.

Financial results of the Hemostasis Business are presented as “Income (loss) from discontinued operations, net of tax” on the accompanying consolidated statements of operations for years ended 2016, 2015 and 2014. Assets and liabilities of the Hemostasis Business to be disposed of are presented as “Current assets held for sale” and “Current liabilities held for sale” on the accompanying consolidated balance sheet as of December 31, 2015.

The following table presents key financial results of the Hemostasis business included in “Income (loss) from discontinued operations, net of tax” for years ended 2016, 2015 and 2014. The cash flows are those expected to be generated by the market participants, discounted using a risk adjusted rate.

	Year Ended December 31,
	2016			2015			2014
	(In thousands)
Net product revenues	$	1,275		$	65,754		$	64,718
Operating expenses:
Cost of product revenue	1,424			75,889			54,300
Research and development	90			7,568			19,669
Selling, general and administrative	542			560			27,210
Impairment	—			133,266			—
Total operating expenses	2,056			217,283			101,179
Income (loss) from operations	(781		)	(151,529		)	(36,461		)
Gain from sale of business	1,004			—			—
Other expense, net	(39		)	(745		)	(596		)
Income (loss) from discontinued operations before income taxes	184			(152,274		)	(37,057		)
Benefit for income taxes	—			(21,448		)	(4,528		)
Income (loss) from discontinued operations, net of tax	$	184		$	(130,826	)	$	(32,529	)

Cumulative translation adjustment (“CTA”) gains or losses of foreign subsidiaries related to divested businesses are reclassified into income once the liquidation of the respective foreign subsidiaries is substantially complete. At the completion of the sale of the Hemostasis Business, the Company reclassified $9.6 million, net of tax, of CTA gains from accumulated comprehensive loss to the Company’s results of discontinued operations. Of this amount, $8.4 million was included in the impairment loss recorded to reduce the Hemostasis Business disposal group’s carrying value to its estimated fair value, less costs to sell as of December 31, 2015 and $1.2 million was included in “Gain from sale of business” for the year ended December 31, 2016.

Cost of product revenue for the three months ended September 30, 2015 included a charge of $25.8 million to reduce the carrying value of the product rights associated with PreveLeak to their estimated fair value as a result of a reduction in expected future cash flows.

The following table presents the major classes of assets and liabilities at December 31, 2015 related to the Hemostasis Business which were reclassified as held for sale:

	December 31,
	2015
	(In thousands)
Assets:
Inventory	$	53,765
Prepaid expenses and other current assets	1,153
Fixed assets, net	1,913
Intangibles, net	374,779
Allowance for reduction of assets of business held for sale	(108,773		)
Total assets held for sale	$	322,837
Liabilities:
Contingent purchase price – current	$	28,600
Deferred tax liability	38,915
Total liabilities held for sale	$	67,515

Depreciation and amortization was ceased upon determination that the held for sale criteria were met in the fourth quarter of 2015. The significant cash flow items from discontinued operations for years ended 2016, 2015 and 2014 were as follows:

	Year Ended December 31,
	2016			2015		2014
	(In thousands)
Depreciation from discontinued operations	$	—		$	371	$	142
Amortization from discontinued operations	—			42,278		20,293
Gain on sale of business	(1,004		)	—		—
Asset impairment charges	—			25,800		—
Reserve for excess or obsolete inventory	—			876		—
Change in contingent consideration obligation	—			8,743		7,400
Proceeds from sale of businesses	174,068			—		—
Capital expenditures	—			738		1,178