Acquisitions	12 Months Ended
Dec. 31, 2018
Acquisitions
Acquisitions	18. Acquisitions Biscayne Acquisition On October 4, 2018, the Company acquired Biscayne, a privately-held company developing a novel treatment for epilepsy. The Company obtained worldwide rights, excluding certain markets in Asia where rights have been out-licensed, to Biscayne’s product candidate, huperzine A (SPN-817). Huperzine A is in clinical development and has received an Orphan Drug designation from the U.S. Food and Drug Administration for the treatment of Dravet Syndrome, a severe form of childhood epilepsy. The Company made an upfront cash payment of $15 million as of the acquisition date. Upon the achievement of certain specified development and sales milestones, The Company may be required to make additional cash payments to the former Biscayne security holders. These additional payments include: (i) payments of up to approximately $73 million, contingent on the Company achieving certain development milestones by utilizing the acquired pharmaceutical intellectual property assets and (ii) payments of up to approximately $95 million, contingent on the Company achieving certain net product sales milestones with respect to the marketing of products developed from such assets. The Company will also pay a low single digit royalty on net sales to the former security holders of Biscayne, and any applicable royalties to third parties for the use of in-licensed intellectual property. The maximum combined royalty the Company will pay to all parties is approximately 12%, depending on the intellectual property covering the marketed product and applicable tiered net product sales levels. As a result of the acquisition, the Company added SPN-817 to its product development pipeline. The Company plans on studying SPN-817 initially in severe pediatric epilepsy disorders such as Dravet Syndrome. In accordance with ASU 2017-01, the acquisition of Biscayne was accounted for as an asset acquisition as substantially all of the fair value of the gross assets acquired was concentrated in a single asset, SPN-817. Net assets acquired included the in-process research and development asset, SPN-817, which is in early Phase I clinical development for the treatment of Dravet Syndrome, and deferred tax assets from net operating loss carryovers. Due to the stage of development of this asset, significant development risk remains. It is not yet probable that there is future economic benefit from this asset. Absent successful clinical results and regulatory approval for the asset, there is no alternative future use associated with SPN-817. Accordingly, approximately $14 million of the $15 million cash payment was recorded as research and development expense in the consolidated statement of earnings at the time of acquisition, as SPN-817 has not yet reached technological feasibility. The Company also recorded approximately $1 million related to the deferred tax assets acquired.

18. Acquisitions

Biscayne Acquisition

On October 4, 2018, the Company acquired Biscayne, a privately-held company developing a novel treatment for epilepsy. The Company obtained worldwide rights, excluding certain markets in Asia where rights have been out-licensed, to Biscayne’s product candidate, huperzine A (SPN-817). Huperzine A is in clinical development and has received an Orphan Drug designation from the U.S. Food and Drug Administration for the treatment of Dravet Syndrome, a severe form of childhood epilepsy.

The Company made an upfront cash payment of $15 million as of the acquisition date. Upon the achievement of certain specified development and sales milestones, The Company may be required to make additional cash payments to the former Biscayne security holders. These additional payments include: (i) payments of up to approximately $73 million, contingent on the Company achieving certain development milestones by utilizing the acquired pharmaceutical intellectual property assets and (ii) payments of up to approximately $95 million, contingent on the Company achieving certain net product sales milestones with respect to the marketing of products developed from such assets. The Company will also pay a low single digit royalty on net sales to the former security holders of Biscayne, and any applicable royalties to third parties for the use of in-licensed intellectual property. The maximum combined royalty the Company will pay to all parties is approximately 12%, depending on the intellectual property covering the marketed product and applicable tiered net product sales levels.

As a result of the acquisition, the Company added SPN-817 to its product development pipeline. The Company plans on studying SPN-817 initially in severe pediatric epilepsy disorders such as Dravet Syndrome.

In accordance with ASU 2017-01, the acquisition of Biscayne was accounted for as an asset acquisition as substantially all of the fair value of the gross assets acquired was concentrated in a single asset, SPN-817. Net assets acquired included the in-process research and development asset, SPN-817, which is in early Phase I clinical development for the treatment of Dravet Syndrome, and deferred tax assets from net operating loss carryovers. Due to the stage of development of this asset, significant development risk remains. It is not yet probable that there is future economic benefit from this asset. Absent successful clinical results and regulatory approval for the asset, there is no alternative future use associated with SPN-817. Accordingly, approximately $14 million of the $15 million cash payment was recorded as research and development expense in the consolidated statement of earnings at the time of acquisition, as SPN-817 has not yet reached technological feasibility. The Company also recorded approximately $1 million related to the deferred tax assets acquired.