Strategic Actions

3 Months Ended

Mar. 31, 2023

Strategic Actions

Strategic Actions

10. Strategic Actions

On February 27, 2023, the Company announced and has since initiated the following strategic actions (the “2023 Strategic Actions”):

Capital Return Program Increase

The Company’s board of directors authorized a $75.0 million increase to the existing $250.0 million capital return program initiated in September 2022, bringing the total capital return program to $325.0 million. For the three months ended March 31, 2023, the Company repurchased 5.2 million shares on the open market at a weighted average cost of $10.69 per share for an aggregate cost of $55.1 million, excluding fees and expenses. Since the initiation of the capital return program, the Company has repurchased $183.3 million of shares, as of March 31, 2023, and the Company has approximately $141.7 million remaining in the capital return program which is expected to be completed by the end of 2023.

Discontinued Investment in Research Activities

The Company discontinued its research activities, including the inhaled Janus kinase (JAK) inhibitor program, resulting in a 17% reduction in headcount at the end of March 2023. The Company plans to seek a partnership to continue progression of its inhaled JAK inhibitor program. In order to support the timely progression of the ampreloxetine Phase 3 study and the completion of the YUPELRI Peak Inspiratory Flow Rate (PIFR-2) Phase 4 study, the Company has prioritized its R&D resource allocation to these two programs.

As a result of the Company’s discontinued investment in research activities, for the three months ended March 31, 2023, the Company incurred restructuring and related expenses of $1.6 million primarily related to R&D expenses. Of the total $1.6 million, cash-related expenses were $1.2 million and non-cash expenses were $0.4 million which were

primarily related to the modification of equity-based awards for employees affected by the reduction in headcount. The Company does not expect to recognize any additional employee-related expenses, including share-based compensation, related to the 2023 Strategic Actions after March 31, 2023.

As a result of the broader 2021 Restructuring, for the three months ended March 31, 2022, the Company incurred restructuring and related expenses of $9.3 million of which $4.7 million was related to R&D expenses and $4.6 million was related to selling, general and administrative expenses. Of the total $9.3 million, cash-related expenses were $4.8 million and non-cash expenses were $4.5 million which were primarily related to the modification of equity-based awards for employees affected by the 2021 Restructuring and certain related awards for other employees.

Selected information relating to accrued cash-related restructuring expenses from the recently announced 2023 Strategic Actions was as follows:

(In thousands)
Balance at December 31, 2022	$	—
Net accruals		1,217
Cash paid		(599)
Balance at March 31, 2023	$	618

All of the restructuring expenses from the 2021 Restructuring were fully recognized and paid in 2022.

The Company also evaluated the impact of the 2023 Strategic Actions on the carrying value of its long-lived assets, such as property and equipment and operating lease assets. This process included evaluating the estimated remaining lives, significant changes in the use, and potential impairment charges related to its long-lived assets. Based on its evaluation, the Company determined that its long-lived assets were not impaired as of March 31, 2023.