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Contingent Consideration
 12 Months Ended
Dec. 31, 2023
Business Combination and Asset Acquisition [Abstract]  
Contingent Consideration Contingent Consideration
The following table provides the current and long-term portions related to the contingent consideration for the USWM Acquisition and Adamas Acquisition (dollars in thousands):
December 31,
2023		December 31,
2022
Reported under the following captions in the consolidated balance sheets:
Contingent consideration, current portion$52,070 $21,120 
Contingent consideration, long-term1,380 33,847 
Total$53,450 $54,967 
The Company's contingent consideration liabilities are related to the USWM Acquisition in 2020 (as defined below) and the Adamas Acquisition in 2021. The contingent consideration liabilities are measured at fair value on a recurring basis using either a Monte Carlo simulation or the income approach. The Company classifies its contingent consideration liabilities as Level 3 fair value measurements based on the significant unobservable inputs used to estimate fair value. These reflect the inputs and assumptions the Company believes would be made by market participants. Changes in any of those inputs together or in isolation may result in significantly lower or higher fair value measurement. The change in fair value is reported on the consolidated statement of earnings in Contingent consideration (gain) expense.
USWM Contingent Consideration
On June 9, 2020 (the USWM Closing Date), the Company completed its acquisition of all the outstanding equity of USWM Enterprises, LLC (USWM Enterprises) (USWM Acquisition). The USWM Acquisition included potential additional contingent consideration payments for regulatory and development milestones and sales-based milestones. As of December 31, 2023, the remaining potential contingent consideration payments include the following:
•Regulatory and developmental milestones:
•The potential $55 million in regulatory and development milestones is comprised of (1) $25 million related to the FDA's approval of the SPN-830 NDA and (2) $30 million related to the subsequent commercial product launch.
•The $30 million sales-based milestone that was due upon the achievement of certain U.S. net product sales of APOKYN in 2023 was not achieved.
The key assumptions considered in estimating the fair value include the estimated probability and timing of milestone achievement, such as the probability and timing of obtaining regulatory approval, discount rate, and the estimated amount and timing of projected revenues from the acquired USWM products.
Adamas Contingent Consideration
On November 24, 2021 (the Adamas Closing Date), the Company completed its acquisition of all the outstanding equity of Adamas (Adamas Acquisition). The Adamas Acquisition included payment of two non-tradable contingent value rights (CVRs) each of which represents the contractual right to receive a contingent payment upon the achievement of the applicable aggregate worldwide net product sales of GOCOVRI.
Each CVR represents the contractual right to receive a contingent payment of $0.50 per share in cash, less any applicable withholding taxes and without interest, upon the achievement of the applicable milestone (each such amount, a Milestone Payment) in accordance with the terms of a Contingent Value Rights Agreement entered into between the Company and American Stock Transfer & Trust Company, LLC, as rights agent, as further defined in the CVR agreement. One Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $150 million during any consecutive 12-month period ending on or before December 31, 2024 (Milestone 2024). Another Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $225 million during any consecutive 12-month period ending on or before December 31, 2025 (Milestone 2025 and, together with Milestone 2024, the Milestones). Each Milestone may only be achieved once. The possible outcomes for the contingent consideration range from $0 to $50.9 million on an undiscounted basis.
The key assumptions considered in estimating the fair value of the Adamas sales-based milestones include the estimated revenue projections, volatility, estimated discount rates and risk-free interest rate.
Change in the Fair Value of Contingent Consideration
The following table provides a reconciliation of the beginning and ending balances related to the contingent consideration liabilities for the USWM Acquisition and Adamas Acquisition (dollars in thousands):
USWM AcquisitionAdamas AcquisitionTotal
Balance at December 31, 2020$76,700 $— $76,700 
Initial estimate of contingent consideration at Closing Date— 10,307 10,307 
Change in fair value recognized in earnings(6,530)— (6,530)
Balance at December 31, 202170,170 10,307 80,477 
Milestone payments(25,000)— (25,000)
Change in fair value recognized in earnings1,100 (1,610)(510)
Balance at December 31, 2022$46,270 $8,697 $54,967 
Change in fair value recognized in earnings130 (1,647)(1,517)
Balance at December 31, 2023$46,400 $7,050 $53,450 
The Company recorded the following changes in fair value of the contingent consideration liability for the USWM milestones:
•For the year ended December 31, 2023, the Company recorded $0.1 million expense which was primarily driven by the passage of time, as well as the change in timing of milestone achievement and estimated discount rate in the first quarter of 2023.
•For the year ended December 31, 2022, the Company recorded a $1.1 million expense which was primarily driven by the passage of time and the accretion to the payout amount related to the milestone achieved in the first quarter of 2022.
•For the year ended December 31, 2021, the Company recorded a $6.5 million gain which was primarily due to the write-down of the sales based contingent consideration liabilities offset by an increase in the estimated fair value of regulatory and developmental milestones due to the passage of time.
The Company paid $25 million of the USWM contingent consideration in the first quarter of 2022 of which
$22.9 million represents the acquisition date fair value of the contingent consideration liability and was reported under cash flows from financing activities. The remaining $2.1 million represents the excess of the acquisition date fair value and was reported under cash flows from operating activities. The amount paid was for the milestone that was due upon the FDA acceptance of the SPN-830 NDA for review, which was achieved in the first quarter of 2022.
The Company recorded the following changes in fair value of the contingent consideration liabilities for the Adamas CVRs:
•For the year ended December 31, 2023, the Company recorded a $1.6 million gain which was primarily driven by the passage of time.
•For the year ended December 31, 2022, the Company recorded a $1.6 million gain primarily due to changes in market data and revenue projections.