Ireland | 68-0683755 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland | Not Applicable |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered |
Ordinary shares, nominal value $0.0001 per share | The NASDAQ Global Market |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | Yes þ No o |
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | Yes þ No o |
Large accelerated filer | þ | Accelerated filer | o |
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | o |
Emerging Growth Company | o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | o | ||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). | Yes o No þ |
Ordinary shares, $0.0001 par value | Number of ordinary shares outstanding as of July 31, 2018: | 223,931,072 |
Page | ||
June 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 1,098,788 | $ | 986,605 | |||
Restricted cash and cash equivalents | 358,211 | 320,453 | |||||
Accounts receivable | 451,240 | 517,436 | |||||
Inventories, net | 343,318 | 391,437 | |||||
Prepaid expenses and other current assets | 45,305 | 43,098 | |||||
Income taxes receivable | 12,036 | 12,048 | |||||
Total current assets | $ | 2,308,898 | $ | 2,271,077 | |||
MARKETABLE SECURITIES | 2,404 | 1,456 | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 499,142 | 523,971 | |||||
GOODWILL | 4,055,193 | 4,450,082 | |||||
OTHER INTANGIBLES, NET | 3,923,866 | 4,317,684 | |||||
DEFERRED INCOME TAXES | 7 | 11,582 | |||||
OTHER ASSETS | 68,525 | 59,728 | |||||
TOTAL ASSETS | $ | 10,858,035 | $ | 11,635,580 | |||
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable and accrued expenses | $ | 1,027,357 | $ | 1,096,825 | |||
Current portion of legal settlement accrual | 1,089,722 | 1,087,793 | |||||
Current portion of long-term debt | 34,205 | 34,205 | |||||
Income taxes payable | 1,782 | 2,086 | |||||
Total current liabilities | $ | 2,153,066 | $ | 2,220,909 | |||
DEFERRED INCOME TAXES | 42,914 | 43,131 | |||||
LONG-TERM DEBT, LESS CURRENT PORTION, NET | 8,233,005 | 8,242,032 | |||||
LONG-TERM LEGAL SETTLEMENT ACCRUAL, LESS CURRENT PORTION | 70,732 | 210,450 | |||||
OTHER LIABILITIES | 420,395 | 434,178 | |||||
COMMITMENTS AND CONTINGENCIES (NOTE 14) | |||||||
SHAREHOLDERS' (DEFICIT) EQUITY: | |||||||
Euro deferred shares, $0.01 par value; 4,000,000 shares authorized and issued at both June 30, 2018 and December 31, 2017 | 47 | 48 | |||||
Ordinary shares, $0.0001 par value; 1,000,000,000 shares authorized; 223,929,771 and 223,331,706 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 22 | 22 | |||||
Additional paid-in capital | 8,819,262 | 8,791,170 | |||||
Accumulated deficit | (8,659,819 | ) | (8,096,539 | ) | |||
Accumulated other comprehensive loss | (221,589 | ) | (209,821 | ) | |||
Total shareholders' (deficit) equity | $ | (62,077 | ) | $ | 484,880 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY | $ | 10,858,035 | $ | 11,635,580 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
TOTAL REVENUES | $ | 714,696 | $ | 875,731 | $ | 1,415,223 | $ | 1,913,331 | |||||||
COSTS AND EXPENSES: | |||||||||||||||
Cost of revenues | 381,905 | 539,401 | 785,503 | 1,208,363 | |||||||||||
Selling, general and administrative | 148,157 | 155,555 | 314,824 | 332,795 | |||||||||||
Research and development | 82,102 | 40,869 | 120,748 | 83,878 | |||||||||||
Litigation-related and other contingencies, net | 19,620 | (2,600 | ) | 17,120 | (1,664 | ) | |||||||||
Asset impairment charges | 22,767 | 725,044 | 471,183 | 929,006 | |||||||||||
Acquisition-related and integration items | 5,161 | 4,190 | 11,996 | 15,070 | |||||||||||
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS | $ | 54,984 | $ | (586,728 | ) | $ | (306,151 | ) | $ | (654,117 | ) | ||||
INTEREST EXPENSE, NET | 130,059 | 121,747 | 254,049 | 233,746 | |||||||||||
LOSS ON EXTINGUISHMENT OF DEBT | — | 51,734 | — | 51,734 | |||||||||||
OTHER INCOME, NET | (28,831 | ) | (6,709 | ) | (31,709 | ) | (8,746 | ) | |||||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | $ | (46,244 | ) | $ | (753,500 | ) | $ | (528,491 | ) | $ | (930,851 | ) | |||
INCOME TAX EXPENSE (BENEFIT) | 6,235 | (57,480 | ) | 21,726 | (69,408 | ) | |||||||||
LOSS FROM CONTINUING OPERATIONS | $ | (52,479 | ) | $ | (696,020 | ) | $ | (550,217 | ) | $ | (861,443 | ) | |||
DISCONTINUED OPERATIONS, NET OF TAX (NOTE 3) | (8,388 | ) | (700,498 | ) | (16,139 | ) | (708,903 | ) | |||||||
NET LOSS | $ | (60,867 | ) | $ | (1,396,518 | ) | $ | (566,356 | ) | $ | (1,570,346 | ) | |||
NET LOSS PER SHARE—BASIC: | |||||||||||||||
Continuing operations | $ | (0.23 | ) | $ | (3.12 | ) | $ | (2.46 | ) | $ | (3.86 | ) | |||
Discontinued operations | (0.04 | ) | (3.14 | ) | (0.07 | ) | (3.18 | ) | |||||||
Basic | $ | (0.27 | ) | $ | (6.26 | ) | $ | (2.53 | ) | $ | (7.04 | ) | |||
NET LOSS PER SHARE—DILUTED: | |||||||||||||||
Continuing operations | $ | (0.23 | ) | $ | (3.12 | ) | $ | (2.46 | ) | $ | (3.86 | ) | |||
Discontinued operations | (0.04 | ) | (3.14 | ) | (0.07 | ) | (3.18 | ) | |||||||
Diluted | $ | (0.27 | ) | $ | (6.26 | ) | $ | (2.53 | ) | $ | (7.04 | ) | |||
WEIGHTED AVERAGE SHARES: | |||||||||||||||
Basic | 223,834 | 223,158 | 223,677 | 223,086 | |||||||||||
Diluted | 223,834 | 223,158 | 223,677 | 223,086 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||
NET LOSS | $ | (60,867 | ) | $ | (1,396,518 | ) | $ | (566,356 | ) | $ | (1,570,346 | ) | |||||||||||||||||||
OTHER COMPREHENSIVE (LOSS) INCOME: | |||||||||||||||||||||||||||||||
Net unrealized gain on securities, net of tax: | |||||||||||||||||||||||||||||||
Unrealized gain arising during the period | $ | — | $ | 491 | $ | — | $ | 145 | |||||||||||||||||||||||
Less: reclassification adjustments for (gain) loss realized in net loss | — | — | — | 491 | — | — | — | 145 | |||||||||||||||||||||||
Net unrealized (loss) gain on foreign currency: | |||||||||||||||||||||||||||||||
Foreign currency translation (loss) gain arising during the period | $ | (5,971 | ) | $ | 10,340 | $ | (11,768 | ) | $ | 25,474 | |||||||||||||||||||||
Less: reclassification adjustments for (gain) loss realized in net loss | — | (5,971 | ) | — | 10,340 | — | (11,768 | ) | — | 25,474 | |||||||||||||||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | $ | (5,971 | ) | $ | 10,831 | $ | (11,768 | ) | $ | 25,619 | |||||||||||||||||||||
COMPREHENSIVE LOSS | $ | (66,838 | ) | $ | (1,385,687 | ) | $ | (578,124 | ) | $ | (1,544,727 | ) |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
OPERATING ACTIVITIES: | |||||||
Net loss | $ | (566,356 | ) | $ | (1,570,346 | ) | |
Adjustments to reconcile Net loss to Net cash provided by operating activities: | |||||||
Depreciation and amortization | 379,646 | 499,656 | |||||
Inventory step-up | 190 | 215 | |||||
Share-based compensation | 29,986 | 27,005 | |||||
Amortization of debt issuance costs and discount | 10,112 | 12,757 | |||||
Deferred income taxes | 12,147 | (179,775 | ) | ||||
Change in fair value of contingent consideration | 10,962 | 8,134 | |||||
Loss on extinguishment of debt | — | 51,734 | |||||
Asset impairment charges | 471,183 | 929,006 | |||||
Gain on sale of business and other assets | (26,993 | ) | (2,311 | ) | |||
Changes in assets and liabilities which provided (used) cash: | |||||||
Accounts receivable | 48,744 | 409,292 | |||||
Inventories | 43,648 | 38,293 | |||||
Prepaid and other assets | 5,230 | 14,422 | |||||
Accounts payable, accrued expenses and other liabilities | (199,065 | ) | 85,350 | ||||
Income taxes payable/receivable | (302 | ) | 15,654 | ||||
Net cash provided by operating activities | $ | 219,132 | $ | 339,086 | |||
INVESTING ACTIVITIES: | |||||||
Purchases of property, plant and equipment, excluding capitalized interest | (41,960 | ) | (59,729 | ) | |||
Capitalized interest payments | (1,677 | ) | — | ||||
Proceeds from sale of business and other assets, net | 37,971 | 18,531 | |||||
Other investing activities | (3,322 | ) | — | ||||
Net cash used in investing activities | $ | (8,988 | ) | $ | (41,198 | ) |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
FINANCING ACTIVITIES: | |||||||
Proceeds from issuance of notes | — | 300,000 | |||||
Proceeds from issuance of term loans | — | 3,415,000 | |||||
Principal payments on term loans | (17,076 | ) | (3,713,875 | ) | |||
Principal payments on other indebtedness | (2,574 | ) | (3,675 | ) | |||
Deferred financing fees | — | (53,954 | ) | ||||
Payments for contingent consideration | (19,267 | ) | (41,240 | ) | |||
Payments of tax withholding for restricted shares | (1,876 | ) | (1,839 | ) | |||
Net cash used in financing activities | $ | (40,793 | ) | $ | (99,583 | ) | |
Effect of foreign exchange rate | (1,010 | ) | 2,926 | ||||
Movement in cash held for sale | — | (21,125 | ) | ||||
NET INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS | $ | 168,341 | $ | 180,106 | |||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,311,014 | 805,180 | |||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD | $ | 1,479,355 | $ | 985,286 | |||
SUPPLEMENTAL INFORMATION: | |||||||
Cash paid into Qualified Settlement Funds for mesh legal settlements | $ | 126,400 | $ | 522,770 | |||
Cash paid out of Qualified Settlement Funds for mesh legal settlements | $ | 148,824 | $ | 440,190 | |||
Other cash distributions for mesh legal settlements | $ | 12,761 | $ | 3,794 | |||
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||
Accrual for purchases of property, plant and equipment | $ | 3,118 | $ | 1,325 |
Prior to Adoption | Impact of Adoption | Subsequent to Adoption | |||||||||
Net cash provided by operating activities | $ | 340,986 | $ | (1,900 | ) | $ | 339,086 | ||||
Net cash used in investing activities | (123,780 | ) | 82,582 | (41,198 | ) | ||||||
Net cash used in financing activities | (99,583 | ) | — | (99,583 | ) | ||||||
Effect of foreign exchange rate | 2,786 | 140 | 2,926 | ||||||||
Movement in cash held for sale | (21,125 | ) | — | (21,125 | ) | ||||||
Net change (1) | $ | 99,284 | $ | 80,822 | $ | 180,106 | |||||
Beginning-of-period balance (2) | 517,250 | 287,930 | 805,180 | ||||||||
End-of-period balance (2) | $ | 616,534 | $ | 368,752 | $ | 985,286 |
(1) | This line refers to the “Net increase in cash and cash equivalents” prior to the adoption of ASU 2016-18 and the “Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents” after the adoption. |
(2) | These lines refer to the beginning or end of period amounts of “Cash and cash equivalents” prior to the adoption of ASU 2016-18 and the beginning or end of period amounts of “Cash, cash equivalents, restricted cash and restricted cash equivalents” after the adoption. |
• | direct rebates; |
• | indirect rebates; |
• | governmental rebates, including those for Medicaid, Medicare and TRICARE, among others; and |
• | managed-care rebates. |
• | ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” (issued in August 2015), which deferred the effective date of ASU 2014-09 by one year, such that ASU 2014-09 became effective for Endo for annual and interim reporting periods beginning after December 15, 2017; |
• | ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Consideration (Reporting Revenue Gross versus Net)” (issued in March 2016), which clarified the guidance on reporting revenue as a principal versus agent; |
• | ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (issued in April 2016), which clarified the guidance on identifying performance obligations and accounting for intellectual property licenses; and |
• | ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” and ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” (issued in May 2016 and December 2016, respectively), which amended certain narrow aspects of Topic 606. |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | ||||||||||||||||||||||
Statement of Operations: | Amounts reported under ASC 606 | Amounts assuming continued application of ASC 605 | Effect of adoption of ASC 606 (1) | Amounts reported under ASC 606 | Amounts assuming continued application of ASC 605 | Effect of adoption of ASC 606 (1) | |||||||||||||||||
Total revenues | $ | 714,696 | $ | 709,887 | $ | 4,809 | $ | 1,415,223 | $ | 1,412,561 | $ | 2,662 | |||||||||||
Cost of revenues | $ | 381,905 | $ | 379,286 | $ | 2,619 | $ | 785,503 | $ | 784,612 | $ | 891 | |||||||||||
Other income, net | $ | (28,831 | ) | $ | (27,831 | ) | $ | (1,000 | ) | $ | (31,709 | ) | $ | (30,709 | ) | $ | (1,000 | ) | |||||
(Loss) income from continuing operations | $ | (52,479 | ) | $ | (55,669 | ) | $ | 3,190 | $ | (550,217 | ) | $ | (552,988 | ) | $ | 2,771 | |||||||
Net (loss) income | $ | (60,867 | ) | $ | (64,057 | ) | $ | 3,190 | $ | (566,356 | ) | $ | (569,127 | ) | $ | 2,771 | |||||||
Net (loss) income per share—Basic: | |||||||||||||||||||||||
Continuing operations | $ | (0.23 | ) | $ | (0.25 | ) | $ | 0.02 | $ | (2.46 | ) | $ | (2.47 | ) | $ | 0.01 | |||||||
Total basic | $ | (0.27 | ) | $ | (0.29 | ) | $ | 0.02 | $ | (2.53 | ) | $ | (2.54 | ) | $ | 0.01 | |||||||
Net (loss) income per share—Diluted: | |||||||||||||||||||||||
Continuing operations | $ | (0.23 | ) | $ | (0.25 | ) | $ | 0.02 | $ | (2.46 | ) | $ | (2.47 | ) | $ | 0.01 | |||||||
Total diluted | $ | (0.27 | ) | $ | (0.29 | ) | $ | 0.02 | $ | (2.53 | ) | $ | (2.54 | ) | $ | 0.01 |
(1) | Amounts may not add due to rounding. |
At June 30, 2018 | |||||||||||
Balance Sheet: | Amounts reported under ASC 606 | Amounts assuming continued application of ASC 605 | Effect of adoption of ASC 606 | ||||||||
Assets: | |||||||||||
Inventories, net | $ | 343,318 | $ | 353,012 | $ | (9,694 | ) | ||||
Prepaid expenses and other current assets | $ | 45,305 | $ | 34,994 | $ | 10,311 | |||||
Other assets | $ | 68,525 | $ | 63,579 | $ | 4,946 | |||||
Liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | 1,027,357 | $ | 1,027,641 | $ | (284 | ) | ||||
Shareholders' (deficit) equity: | |||||||||||
Accumulated deficit | $ | (8,659,819 | ) | $ | (8,665,666 | ) | $ | 5,847 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Litigation-related and other contingencies, net | $ | — | $ | 775,474 | $ | — | $ | 775,684 | |||||||
Loss from discontinued operations before income taxes | $ | (8,388 | ) | $ | (791,588 | ) | $ | (16,139 | ) | $ | (804,485 | ) | |||
Income tax benefit | $ | — | $ | (91,090 | ) | $ | — | $ | (95,582 | ) | |||||
Discontinued operations, net of tax | $ | (8,388 | ) | $ | (700,498 | ) | $ | (16,139 | ) | $ | (708,903 | ) |
Employee Separation and Other Benefit-Related Costs | Other Restructuring Costs | Total | |||||||||
Liability balance as of January 1, 2018 | $ | 22,975 | $ | 1,610 | $ | 24,585 | |||||
Expenses | 7,709 | 6,603 | 14,312 | ||||||||
Cash distributions | (12,733 | ) | (7,863 | ) | (20,596 | ) | |||||
Liability balance as of June 30, 2018 | $ | 17,951 | $ | 350 | $ | 18,301 |
Employee Separation and Other Benefit-Related Costs | Other Restructuring Costs | Total | |||||||||
Liability balance as of January 1, 2018 | $ | — | $ | 650 | $ | 650 | |||||
Expenses | 22,567 | 1,572 | 24,139 | ||||||||
Cash distributions | (12,896 | ) | (1,783 | ) | (14,679 | ) | |||||
Liability balance as of June 30, 2018 | $ | 9,671 | $ | 439 | $ | 10,110 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net revenues from external customers: | |||||||||||||||
U.S. Branded - Specialty & Established Pharmaceuticals | $ | 212,637 | $ | 245,188 | $ | 412,872 | $ | 495,347 | |||||||
U.S. Branded - Sterile Injectables | 217,843 | 180,292 | 433,697 | 352,460 | |||||||||||
U.S. Generic Pharmaceuticals | 241,236 | 383,020 | 490,476 | 932,835 | |||||||||||
International Pharmaceuticals (1) | 42,980 | 67,231 | 78,178 | 132,689 | |||||||||||
Total net revenues from external customers | $ | 714,696 | $ | 875,731 | $ | 1,415,223 | $ | 1,913,331 | |||||||
Adjusted income from continuing operations before income tax: | |||||||||||||||
U.S. Branded - Specialty & Established Pharmaceuticals | $ | 83,749 | $ | 127,595 | $ | 177,563 | $ | 257,087 | |||||||
U.S. Branded - Sterile Injectables | 173,308 | 140,062 | 342,753 | 266,529 | |||||||||||
U.S. Generic Pharmaceuticals | 90,302 | 113,804 | 164,582 | 328,936 | |||||||||||
International Pharmaceuticals | 18,499 | 14,812 | 32,217 | 29,694 | |||||||||||
Total segment adjusted income from continuing operations before income tax | $ | 365,858 | $ | 396,273 | $ | 717,115 | $ | 882,246 |
(1) | Revenues generated by our International Pharmaceuticals segment are primarily attributable to external customers located in Canada and, prior to the sale of Litha on July 3, 2017 and Somar on October 25, 2017, South Africa and Latin America. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total consolidated loss from continuing operations before income tax | $ | (46,244 | ) | $ | (753,500 | ) | $ | (528,491 | ) | $ | (930,851 | ) | |||
Interest expense, net | 130,059 | 121,747 | 254,049 | 233,746 | |||||||||||
Corporate unallocated costs (1) | 43,046 | 34,152 | 95,506 | 81,620 | |||||||||||
Amortization of intangible assets | 153,215 | 190,943 | 310,387 | 454,077 | |||||||||||
Inventory step-up | 124 | 100 | 190 | 215 | |||||||||||
Upfront and milestone payments to partners | 36,964 | 3,082 | 38,296 | 6,177 | |||||||||||
Separation benefits and other cost reduction initiatives (2) | 29,153 | 24,614 | 78,140 | 47,284 | |||||||||||
Certain litigation-related and other contingencies, net (3) | 19,620 | (2,600 | ) | 17,120 | (1,664 | ) | |||||||||
Asset impairment charges (4) | 22,767 | 725,044 | 471,183 | 929,006 | |||||||||||
Acquisition-related and integration items (5) | 5,161 | 4,190 | 11,996 | 15,070 | |||||||||||
Loss on extinguishment of debt | — | 51,734 | — | 51,734 | |||||||||||
Foreign currency impact related to the remeasurement of intercompany debt instruments | (574 | ) | (3,233 | ) | (3,088 | ) | (5,927 | ) | |||||||
Other, net (6) | (27,433 | ) | — | (28,173 | ) | 1,759 | |||||||||
Total segment adjusted income from continuing operations before income tax | $ | 365,858 | $ | 396,273 | $ | 717,115 | $ | 882,246 |
(1) | Amounts include certain corporate overhead costs, such as headcount and facility expenses and certain other income and expenses. |
(2) | Amounts primarily relate to employee separation costs of $5.4 million and $30.6 million for the three and six months ended June 30, 2018, respectively. Other amounts for the three and six months ended June 30, 2018 include accelerated depreciation of $18.1 million and $35.2 million, respectively, charges to increase excess inventory reserves of $0.2 million and $2.6 million, respectively, and other charges of $5.4 million and $9.7 million, respectively, each of which related primarily to our restructuring initiatives. During the three and six months ended June 30, 2017, amounts primarily relate to employee separation costs of $0.7 million and $21.5 million, respectively, charges to increase excess inventory reserves of $7.9 million during both periods and other charges of $16.0 million and $17.5 million, respectively, related primarily to the 2017 U.S. Generics Pharmaceuticals restructuring initiative. See Note 4. Restructuring for discussion of our material restructuring initiatives. |
(3) | Amounts include adjustments for Litigation-related and other contingencies, net as further described in Note 14. Commitments and Contingencies. |
(4) | Amounts primarily relate to charges to impair goodwill and intangible assets as further described in Note 9. Goodwill and Other Intangibles as well as charges to write down certain property, plant and equipment as further described in Note 7. Fair Value Measurements. |
(5) | Amounts during the three and six months ended June 30, 2018 are primarily related to charges due to changes in the fair value of contingent consideration of $4.1 million and $11.0 million, respectively. Amounts during the three and six months ended June 30, 2017 include charges due to changes in the fair value of contingent consideration of $2.0 million and $8.1 million, respectively. All other amounts are directly related to costs associated with acquisition and integration efforts. |
(6) | Amounts during the three and six months ended June 30, 2018 primarily relate to gains on sales of businesses and other assets, as further described in Note 17. Other income, net. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
U.S. Branded - Specialty & Established Pharmaceuticals: | |||||||||||||||
Specialty Products: | |||||||||||||||
XIAFLEX® | $ | 63,500 | $ | 50,077 | $ | 120,641 | $ | 99,602 | |||||||
SUPPRELIN® LA | 19,963 | 23,649 | 40,540 | 42,830 | |||||||||||
Other Specialty (1) | 36,429 | 36,745 | 70,626 | 72,773 | |||||||||||
Total Specialty Products | $ | 119,892 | $ | 110,471 | $ | 231,807 | $ | 215,205 | |||||||
Established Products: | |||||||||||||||
PERCOCET® | $ | 30,833 | $ | 30,889 | $ | 62,809 | $ | 61,834 | |||||||
VOLTAREN® Gel | 17,811 | 20,270 | 29,128 | 34,544 | |||||||||||
OPANA® ER | — | 31,582 | — | 67,300 | |||||||||||
Other Established (2) | 44,101 | 51,976 | 89,128 | 116,464 | |||||||||||
Total Established Products | $ | 92,745 | $ | 134,717 | $ | 181,065 | $ | 280,142 | |||||||
Total U.S. Branded - Specialty & Established Pharmaceuticals (3) | $ | 212,637 | $ | 245,188 | $ | 412,872 | $ | 495,347 | |||||||
U.S. Branded - Sterile Injectables: | |||||||||||||||
VASOSTRICT® | $ | 106,329 | $ | 95,750 | $ | 220,054 | $ | 194,908 | |||||||
ADRENALIN® | 36,658 | 19,032 | 66,398 | 25,129 | |||||||||||
Other Sterile Injectables (4) | 74,856 | 65,510 | 147,245 | 132,423 | |||||||||||
Total U.S. Branded - Sterile Injectables (3) | $ | 217,843 | $ | 180,292 | $ | 433,697 | $ | 352,460 | |||||||
Total U.S. Generic Pharmaceuticals (5) | $ | 241,236 | $ | 383,020 | $ | 490,476 | $ | 932,835 | |||||||
Total International Pharmaceuticals (6) | $ | 42,980 | $ | 67,231 | $ | 78,178 | $ | 132,689 | |||||||
Total Revenues | $ | 714,696 | $ | 875,731 | $ | 1,415,223 | $ | 1,913,331 |
(1) | Products included within Other Specialty include TESTOPEL®, NASCOBAL® Nasal Spray and AVEED®. |
(2) | Products included within Other Established include, but are not limited to, LIDODERM®, EDEX®, TESTIM® and FORTESTA® Gel, including the authorized generics. |
(3) | Individual products presented above represent the top two performing products in each product category and/or any product having revenues in excess of $25 million during any quarterly period in 2018 or 2017. |
(4) | Products included within Other Sterile Injectables include, but are not limited to, APLISOL®, ephedrine sulfate injection and neostigmine methylsulfate injection. |
(5) | The U.S. Generic Pharmaceuticals segment is comprised of a portfolio of products that are generic versions of branded products, are distributed primarily through the same wholesalers, generally have no intellectual property protection and are sold within the U.S. During the three and six months ended June 30, 2017, combined sales of ezetimibe tablets and quetiapine ER tablets, for which we lost temporary marketing exclusivity during the second quarter of 2017, made up 6% and 13% of consolidated total revenue, respectively. No other individual product within this segment has exceeded 5% of consolidated total revenues for the periods presented. |
(6) | The International Pharmaceuticals segment, which accounted for 6% of consolidated total revenues during both the three and six months ended June 30, 2018 and 8% and 7% of consolidated total revenues during the three and six months ended June 30, 2017, respectively, includes a variety of specialty pharmaceutical products sold outside the U.S., primarily in Canada through our operating company Paladin Labs, Inc. (Paladin). This segment also included: (i) our South African business, which was sold in July 2017 and consisted of Litha and certain assets acquired from Aspen Holdings in October 2015 and (ii) our Latin American business consisting of Somar, which was sold in October 2017. |
• | Level 1—Quoted prices in active markets for identical assets or liabilities. |
• | Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Fair Value Measurements at Reporting Date using: | |||||||||||||||
June 30, 2018 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Assets: | |||||||||||||||
Money market funds | $ | 406,412 | $ | — | $ | — | $ | 406,412 | |||||||
Time deposits | — | 109,919 | — | 109,919 | |||||||||||
Equity securities | 2,404 | — | — | 2,404 | |||||||||||
Total | $ | 408,816 | $ | 109,919 | $ | — | $ | 518,735 | |||||||
Liabilities: | |||||||||||||||
Acquisition-related contingent consideration—short-term | $ | — | $ | — | $ | 52,922 | $ | 52,922 | |||||||
Acquisition-related contingent consideration—long-term | — | — | 99,176 | 99,176 | |||||||||||
Total | $ | — | $ | — | $ | 152,098 | $ | 152,098 |
Fair Value Measurements at Reporting Date using: | |||||||||||||||
December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||
Assets: | |||||||||||||||
Money market funds | $ | 439,831 | $ | — | $ | — | $ | 439,831 | |||||||
Time deposits | — | 303,410 | — | 303,410 | |||||||||||
Equity securities | 1,456 | — | — | 1,456 | |||||||||||
Total | $ | 441,287 | $ | 303,410 | $ | — | $ | 744,697 | |||||||
Liabilities: | |||||||||||||||
Acquisition-related contingent consideration—short-term | $ | — | $ | — | $ | 70,543 | $ | 70,543 | |||||||
Acquisition-related contingent consideration—long-term | — | — | 119,899 | 119,899 | |||||||||||
Total | $ | — | $ | — | $ | 190,442 | $ | 190,442 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Beginning of period | $ | 169,287 | $ | 234,391 | $ | 190,442 | $ | 262,113 | |||||||
Amounts settled | (20,967 | ) | (26,219 | ) | (48,734 | ) | (60,310 | ) | |||||||
Changes in fair value recorded in earnings | 4,127 | 1,950 | 10,962 | 8,134 | |||||||||||
Effect of currency translation | (349 | ) | 338 | (572 | ) | 523 | |||||||||
End of period | $ | 152,098 | $ | 210,460 | $ | 152,098 | $ | 210,460 |
Balance as of December 31, 2017 | Fair Value Adjustments and Accretion | Payments and Other | Balance as of June 30, 2018 | ||||||||||||
Auxilium acquisition | $ | 13,061 | $ | (223 | ) | $ | (1,844 | ) | $ | 10,994 | |||||
Lehigh Valley Technologies, Inc. acquisitions | 63,001 | 6,674 | (26,975 | ) | 42,700 | ||||||||||
VOLTAREN® Gel acquisition | 98,124 | 7,938 | (19,227 | ) | 86,835 | ||||||||||
Other | 16,256 | (3,427 | ) | (1,260 | ) | 11,569 | |||||||||
Total | $ | 190,442 | $ | 10,962 | $ | (49,306 | ) | $ | 152,098 |
Fair Value Measurements at Reporting Date using: | Total Expense for the Six Months Ended June 30, 2018 | ||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets: | |||||||||||||||
Intangible assets, excluding goodwill (Note 9) | $ | — | $ | — | $ | 173,270 | $ | (76,967 | ) | ||||||
Certain property, plant and equipment (1) | — | — | — | (3,216 | ) | ||||||||||
Total | $ | — | $ | — | $ | 173,270 | $ | (80,183 | ) |
(1) | Amount includes $2.6 million related to the 2017 U.S. Generic Pharmaceuticals Restructuring Initiative, which is described further in Note 4. Restructuring. |
June 30, 2018 | December 31, 2017 | ||||||
Raw materials (1) | $ | 117,199 | $ | 124,685 | |||
Work-in-process (1) | 91,857 | 109,897 | |||||
Finished goods (1) | 134,262 | 156,855 | |||||
Total | $ | 343,318 | $ | 391,437 |
U.S. Branded - Specialty & Established Pharmaceuticals | U.S. Branded - Sterile Injectables | U.S. Generic Pharmaceuticals | International Pharmaceuticals | Total | |||||||||||||||
Goodwill as of December 31, 2017 | $ | 828,818 | $ | — | $ | 3,531,301 | $ | 89,963 | $ | 4,450,082 | |||||||||
Allocation to current segments (1) | — | 2,731,193 | (2,731,193 | ) | — | — | |||||||||||||
Effect of currency translation | — | — | — | (3,889 | ) | (3,889 | ) | ||||||||||||
Goodwill impairment charges | — | — | (391,000 | ) | — | (391,000 | ) | ||||||||||||
Goodwill as of June 30, 2018 | $ | 828,818 | $ | 2,731,193 | $ | 409,108 | $ | 86,074 | $ | 4,055,193 |
(1) | This allocation relates to the change in segments described in Note 6. Segment Results. The amount of goodwill initially attributed to the new U.S. Branded - Sterile Injectables and U.S. Generic Pharmaceuticals segments was determined using a relative fair value methodology in accordance with U.S. GAAP. |
U.S. Branded - Specialty & Established Pharmaceuticals | U.S. Branded - Sterile Injectables | U.S. Generic Pharmaceuticals | International Pharmaceuticals | Total | |||||||||||||||
Accumulated impairment losses as of December 31, 2017 | $ | 855,810 | $ | — | $ | 2,342,549 | $ | 463,545 | $ | 3,661,904 | |||||||||
Accumulated impairment losses as of June 30, 2018 | $ | 855,810 | $ | — | $ | 2,733,549 | $ | 443,708 | $ | 4,033,067 |
Cost basis: | Balance as of December 31, 2017 | Acquisitions | Impairments | Other (1) | Effect of Currency Translation | Balance as of June 30, 2018 | |||||||||||||||||
Indefinite-lived intangibles: | |||||||||||||||||||||||
In-process research and development | $ | 347,200 | $ | — | $ | (50,500 | ) | $ | — | $ | — | $ | 296,700 | ||||||||||
Total indefinite-lived intangibles | $ | 347,200 | $ | — | $ | (50,500 | ) | $ | — | $ | — | $ | 296,700 | ||||||||||
Finite-lived intangibles: | |||||||||||||||||||||||
Licenses (weighted average life of 12 years) | $ | 457,402 | $ | — | $ | — | $ | — | $ | — | $ | 457,402 | |||||||||||
Tradenames | 6,409 | — | — | — | — | 6,409 | |||||||||||||||||
Developed technology (weighted average life of 11 years) | 6,187,764 | — | (26,467 | ) | (10,647 | ) | (11,892 | ) | 6,138,758 | ||||||||||||||
Total finite-lived intangibles (weighted average life of 11 years) | $ | 6,651,575 | $ | — | $ | (26,467 | ) | $ | (10,647 | ) | $ | (11,892 | ) | $ | 6,602,569 | ||||||||
Total other intangibles | $ | 6,998,775 | $ | — | $ | (76,967 | ) | $ | (10,647 | ) | $ | (11,892 | ) | $ | 6,899,269 | ||||||||
Accumulated amortization: | Balance as of December 31, 2017 | Amortization | Impairments | Other (1) | Effect of Currency Translation | Balance as of June 30, 2018 | |||||||||||||||||
Finite-lived intangibles: | |||||||||||||||||||||||
Licenses | $ | (370,221 | ) | $ | (14,174 | ) | $ | — | $ | — | $ | — | $ | (384,395 | ) | ||||||||
Tradenames | (6,409 | ) | — | — | — | — | (6,409 | ) | |||||||||||||||
Developed technology | (2,304,461 | ) | (296,213 | ) | — | 10,647 | 5,428 | (2,584,599 | ) | ||||||||||||||
Total other intangibles | $ | (2,681,091 | ) | $ | (310,387 | ) | $ | — | $ | 10,647 | $ | 5,428 | $ | (2,975,403 | ) | ||||||||
Net other intangibles | $ | 4,317,684 | $ | 3,923,866 |
(1) | Other adjustments relate to the removal of certain fully amortized intangible assets. |
2018 | $ | 623,324 | |
2019 | $ | 551,471 | |
2020 | $ | 491,046 | |
2021 | $ | 458,821 | |
2022 | $ | 438,071 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Goodwill impairment charges | $ | — | $ | 206,143 | $ | 391,000 | $ | 288,745 | |||||||
Other intangible asset impairment charges | $ | 22,767 | $ | 476,971 | $ | 76,967 | $ | 595,877 |
• | The former Generics reporting unit’s estimated fair value (determined using a discount rate of 9.5%) exceeded its carrying amount, resulting in no related goodwill impairment charge. |
• | The new U.S. Branded - Sterile Injectables reporting unit’s estimated fair value (determined using a discount rate of 9.5%) exceeded its carrying amount, resulting in no related goodwill impairment charge. |
• | The new U.S. Generic Pharmaceuticals reporting unit’s carrying amount exceeded its estimated fair value (determined using a discount rate of 9.5%), resulting in a pre-tax non-cash goodwill impairment charge of $391.0 million. |
June 30, 2018 | January 1, 2018 | $ Change | % Change | |||||||||||
Contract assets, net (1) | $ | 15,257 | $ | 11,287 | $ | 3,970 | 35 | % | ||||||
Contract liabilities, net (2) | $ | 20,054 | $ | 20,954 | $ | (900 | ) | (4 | )% |
(1) | At June 30, 2018 and January 1, 2018, approximately $10.3 million and $8.2 million, respectively, of these contract asset amounts are classified as current assets and are included in Prepaid expenses and other current assets in the Company’s Condensed Consolidated Balance Sheets. The remaining amounts are classified as non-current and are included in Other assets. The net increase in contract assets during the six months ended June 30, 2018 was primarily due to certain sales activity during the period, partially offset by reclassifications to accounts receivable following the resolution of certain conditions other than the passage of time affecting the Company’s rights to consideration for the sale of certain goods. |
(2) | At June 30, 2018 and January 1, 2018, approximately $1.7 million and $1.9 million, respectively, of these contract liability amounts are classified as current liabilities and are included in Accounts payable and accrued expenses in the Company’s Condensed Consolidated Balance Sheets. The remaining amounts are classified as non-current and are included in Other liabilities. During the six months ended June 30, 2018, the Company recognized revenue of $0.9 million that was included in the contract liability balance at January 1, 2018, resulting in a corresponding decrease in contract liabilities. |
June 30, 2018 | December 31, 2017 | ||||||
Trade accounts payable | $ | 95,195 | $ | 85,348 | |||
Returns and allowances | 276,677 | 291,034 | |||||
Rebates | 142,813 | 168,333 | |||||
Chargebacks | 5,513 | 14,604 | |||||
Accrued interest | 130,242 | 130,257 | |||||
Accrued payroll and related benefits | 84,317 | 113,908 | |||||
Accrued royalties and other distribution partner payables | 52,515 | 63,114 | |||||
Acquisition-related contingent consideration—short-term | 52,922 | 70,543 | |||||
Other | 187,163 | 159,684 | |||||
Total | $ | 1,027,357 | $ | 1,096,825 |
June 30, 2018 | December 31, 2017 | ||||||||||||||||||||
Effective Interest Rate | Principal Amount | Carrying Amount | Effective Interest Rate | Principal Amount | Carrying Amount | ||||||||||||||||
7.25% Senior Notes due 2022 | 7.91 | % | $ | 400,000 | $ | 391,941 | 7.91 | % | $ | 400,000 | $ | 390,974 | |||||||||
5.75% Senior Notes due 2022 | 6.04 | % | 700,000 | 693,646 | 6.04 | % | 700,000 | 692,855 | |||||||||||||
5.375% Senior Notes due 2023 | 5.62 | % | 750,000 | 742,732 | 5.62 | % | 750,000 | 742,048 | |||||||||||||
6.00% Senior Notes due 2023 | 6.28 | % | 1,635,000 | 1,615,104 | 6.28 | % | 1,635,000 | 1,613,446 | |||||||||||||
5.875% Senior Secured Notes due 2024 | 6.14 | % | 300,000 | 295,784 | 6.14 | % | 300,000 | 295,513 | |||||||||||||
6.00% Senior Notes due 2025 | 6.27 | % | 1,200,000 | 1,182,311 | 6.27 | % | 1,200,000 | 1,181,243 | |||||||||||||
Term Loan B Facility Due 2024 | 5.46 | % | 3,380,850 | 3,345,637 | 5.46 | % | 3,397,925 | 3,360,103 | |||||||||||||
Other debt | 1.50 | % | 55 | 55 | 1.50 | % | 55 | 55 | |||||||||||||
Total long-term debt, net | $ | 8,365,905 | $ | 8,267,210 | $ | 8,382,980 | $ | 8,276,237 | |||||||||||||
Less current portion, net | 34,205 | 34,205 | 34,205 | 34,205 | |||||||||||||||||
Total long-term debt, less current portion, net | $ | 8,331,700 | $ | 8,233,005 | $ | 8,348,775 | $ | 8,242,032 |
Qualified Settlement Funds | Mesh Liability Accrual | ||||||
Balance as of January 1, 2018 | $ | 313,814 | $ | 1,087,172 | |||
Additional charges | — | — | |||||
Cash contributions to Qualified Settlement Funds | 126,400 | — | |||||
Cash distributions to settle disputes from Qualified Settlement Funds | (148,824 | ) | (148,824 | ) | |||
Cash distributions to settle disputes | — | (12,761 | ) | ||||
Other (1) | 1,156 | 4,388 | |||||
Balance as of June 30, 2018 | $ | 292,546 | $ | 929,975 |
(1) | Amounts deposited in the QSFs may earn interest, which is generally used to pay administrative costs of the fund and is reflected in the table above as an increase to the QSF balance. Any interest remaining after all claims have been paid will generally be distributed to the claimants. The $4.4 million in the table above represents a reclassification adjustment for amounts previously recorded in Accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets. |
Three Months Ended June 30, | |||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||
Before-Tax Amount | Tax (Expense) Benefit | Net-of-Tax Amount | Before-Tax Amount | Tax (Expense) Benefit | Net-of-Tax Amount | ||||||||||||||||||
Net unrealized gain on securities: | |||||||||||||||||||||||
Unrealized gain arising during the period | $ | — | $ | — | $ | — | $ | 771 | $ | (280 | ) | $ | 491 | ||||||||||
Less: reclassification adjustments for (gain) loss realized in net loss | — | — | — | — | — | — | |||||||||||||||||
Net unrealized gains | $ | — | $ | — | $ | — | $ | 771 | $ | (280 | ) | $ | 491 | ||||||||||
Net unrealized (loss) gain on foreign currency: | |||||||||||||||||||||||
Foreign currency translation (loss) gain arising during the period | (5,971 | ) | — | (5,971 | ) | 10,340 | — | 10,340 | |||||||||||||||
Less: reclassification adjustments for (gain) loss realized in net loss | — | — | — | — | — | — | |||||||||||||||||
Foreign currency translation (loss) gain | $ | (5,971 | ) | $ | — | $ | (5,971 | ) | $ | 10,340 | $ | — | $ | 10,340 | |||||||||
Other comprehensive (loss) income | $ | (5,971 | ) | $ | — | $ | (5,971 | ) | $ | 11,111 | $ | (280 | ) | $ | 10,831 |
Six Months Ended June 30, | |||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||
Before-Tax Amount | Tax (Expense) Benefit | Net-of-Tax Amount | Before-Tax Amount | Tax (Expense) Benefit | Net-of-Tax Amount | ||||||||||||||||||
Net unrealized gain on securities: | |||||||||||||||||||||||
Unrealized gain arising during the period | $ | — | $ | — | $ | — | $ | 227 | $ | (82 | ) | $ | 145 | ||||||||||
Less: reclassification adjustments for (gain) loss realized in net loss | — | — | — | — | — | — | |||||||||||||||||
Net unrealized gains | $ | — | $ | — | $ | — | $ | 227 | $ | (82 | ) | $ | 145 | ||||||||||
Net unrealized (loss) gain on foreign currency: | |||||||||||||||||||||||
Foreign currency translation (loss) gain arising during the period | (11,768 | ) | — | (11,768 | ) | 25,474 | — | 25,474 | |||||||||||||||
Less: reclassification adjustments for (gain) loss realized in net loss | — | — | — | — | — | — | |||||||||||||||||
Foreign currency translation (loss) gain | $ | (11,768 | ) | $ | — | $ | (11,768 | ) | $ | 25,474 | $ | — | $ | 25,474 | |||||||||
Other comprehensive (loss) income | $ | (11,768 | ) | $ | — | $ | (11,768 | ) | $ | 25,701 | $ | (82 | ) | $ | 25,619 |
Total Shareholders' Equity (Deficit) | |||
Shareholders' equity at January 1, 2018, prior to the adoption of ASC 606 | $ | 484,880 | |
Effect of adopting ASC 606 (1) | 3,076 | ||
Shareholders' equity at January 1, 2018 | $ | 487,956 | |
Net loss | (566,356 | ) | |
Other comprehensive loss | (11,768 | ) | |
Compensation related to share-based awards | 29,986 | ||
Tax withholding for restricted shares | (1,876 | ) | |
Other | (19 | ) | |
Shareholders' deficit at June 30, 2018 | $ | (62,077 | ) |
(1) | Refer to Note 2. Summary of Significant Accounting Policies for further description of ASC 606. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Gain) loss on sale of business and other assets | $ | (24,577 | ) | $ | 26 | $ | (26,993 | ) | $ | (2,311 | ) | ||||
Foreign currency gain, net | (3 | ) | (3,870 | ) | (2,088 | ) | (6,854 | ) | |||||||
Equity (earnings) loss from investments accounted for under the equity method, net | (305 | ) | (1,090 | ) | 2,321 | (88 | ) | ||||||||
Other miscellaneous, net | (3,946 | ) | (1,775 | ) | (4,949 | ) | 507 | ||||||||
Other income, net | $ | (28,831 | ) | $ | (6,709 | ) | $ | (31,709 | ) | $ | (8,746 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Loss from continuing operations before income tax | $ | (46,244 | ) | $ | (753,500 | ) | $ | (528,491 | ) | $ | (930,851 | ) | |||
Income tax expense (benefit) | $ | 6,235 | $ | (57,480 | ) | $ | 21,726 | $ | (69,408 | ) | |||||
Effective tax rate | (13.5 | )% | 7.6 | % | (4.1 | )% | 7.5 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Numerator: | |||||||||||||||
Loss from continuing operations | $ | (52,479 | ) | $ | (696,020 | ) | $ | (550,217 | ) | $ | (861,443 | ) | |||
Loss from discontinued operations, net of tax | (8,388 | ) | (700,498 | ) | (16,139 | ) | (708,903 | ) | |||||||
Net loss | $ | (60,867 | ) | $ | (1,396,518 | ) | $ | (566,356 | ) | $ | (1,570,346 | ) | |||
Denominator: | |||||||||||||||
For basic per share data—weighted average shares | 223,834 | 223,158 | 223,677 | 223,086 | |||||||||||
Dilutive effect of ordinary share equivalents | — | — | — | — | |||||||||||
Dilutive effect of various convertible notes and warrants | — | — | — | — | |||||||||||
For diluted per share data—weighted average shares | 223,834 | 223,158 | 223,677 | 223,086 |
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | ||||||||||||||||||
2018 | 2017 | 2018 vs. 2017 | 2018 | 2017 | 2018 vs. 2017 | ||||||||||||||||
Total revenues | $ | 714,696 | $ | 875,731 | (18 | )% | $ | 1,415,223 | $ | 1,913,331 | (26 | )% | |||||||||
Cost of revenues | 381,905 | 539,401 | (29 | )% | 785,503 | 1,208,363 | (35 | )% | |||||||||||||
Gross margin | $ | 332,791 | $ | 336,330 | (1 | )% | $ | 629,720 | $ | 704,968 | (11 | )% | |||||||||
Gross margin percentage | 46.6 | % | 38.4 | % | 44.5 | % | 36.8 | % | |||||||||||||
Selling, general and administrative | $ | 148,157 | 155,555 | (5 | )% | $ | 314,824 | 332,795 | (5 | )% | |||||||||||
Research and development | 82,102 | 40,869 | NM | 120,748 | 83,878 | 44 | % | ||||||||||||||
Litigation-related and other contingencies, net | 19,620 | (2,600 | ) | NM | 17,120 | (1,664 | ) | NM | |||||||||||||
Asset impairment charges | 22,767 | 725,044 | (97 | )% | 471,183 | 929,006 | (49 | )% | |||||||||||||
Acquisition-related and integration items | 5,161 | 4,190 | 23 | % | 11,996 | 15,070 | (20 | )% | |||||||||||||
Interest expense, net | 130,059 | 121,747 | 7 | % | 254,049 | 233,746 | 9 | % | |||||||||||||
Loss on extinguishment of debt | — | 51,734 | (100 | )% | — | 51,734 | (100 | )% | |||||||||||||
Other income, net | (28,831 | ) | (6,709 | ) | NM | $ | (31,709 | ) | (8,746 | ) | NM | ||||||||||
Loss from continuing operations before income tax | $ | (46,244 | ) | $ | (753,500 | ) | (94 | )% | $ | (528,491 | ) | $ | (930,851 | ) | (43 | )% |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Amortization of intangible assets (1) | $ | 153,215 | $ | 190,943 | $ | 310,387 | $ | 454,077 | |||||||
Separation benefits and other cost reduction initiatives (2) | $ | 26,815 | $ | 12,925 | $ | 56,421 | $ | 14,586 |
(1) | Amortization expense fluctuates based on changes in the total amount of amortizable intangible assets and the rate of amortization in effect for each intangible asset, both of which can vary based on factors such as the amount and timing of acquisitions, dispositions, asset impairment charges, transfers between indefinite- and finite-lived intangibles assets, changes in foreign currency rates and changes in the composition of our intangible assets impacting the weighted average useful lives and amortization methodologies being utilized. The decreases during both the three and six months ended June 30, 2018 were primarily driven by the impact of 2017 amortization expense for both ezetimibe tablets and quetiapine ER tablets, which were fully amortized prior to January 1, 2018, and asset impairment charges. These decreases were partially offset by the impact of certain in-process research and development assets put into service. |
(2) | Amounts primarily relate to certain accelerated depreciation charges, employee separation costs and charges to increase excess inventory reserves related to restructurings and other cost reduction and restructuring charges. See Note 4. Restructuring of the Condensed Consolidated Financial Statements included in Part I, Item 1 for discussion of our material restructuring initiatives. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Goodwill impairment charges | $ | — | $ | 206,143 | $ | 391,000 | $ | 288,745 | |||||||
Other intangible asset impairment charges | 22,767 | 476,971 | 76,967 | 595,877 | |||||||||||
Property, plant and equipment impairment charges | — | 41,930 | 3,216 | 44,384 | |||||||||||
Total asset impairment charges | $ | 22,767 | $ | 725,044 | $ | 471,183 | $ | 929,006 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net expense from changes in the fair value of acquisition-related contingent consideration | $ | 4,127 | $ | 1,950 | $ | 10,962 | $ | 8,134 | |||||||
Other | 1,034 | 2,240 | 1,034 | 6,936 | |||||||||||
Acquisition-related and integration items | $ | 5,161 | $ | 4,190 | $ | 11,996 | $ | 15,070 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Interest expense | $ | 133,339 | $ | 123,354 | $ | 260,852 | $ | 236,807 | |||||||
Interest income | (3,280 | ) | (1,607 | ) | (6,803 | ) | (3,061 | ) | |||||||
Interest expense, net | $ | 130,059 | $ | 121,747 | $ | 254,049 | $ | 233,746 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Gain) loss on sale of business and other assets | $ | (24,577 | ) | $ | 26 | $ | (26,993 | ) | $ | (2,311 | ) | ||||
Foreign currency gain, net | (3 | ) | (3,870 | ) | (2,088 | ) | (6,854 | ) | |||||||
Equity (earnings) loss from investments accounted for under the equity method, net | (305 | ) | (1,090 | ) | 2,321 | (88 | ) | ||||||||
Other miscellaneous, net | (3,946 | ) | (1,775 | ) | (4,949 | ) | 507 | ||||||||
Other income, net | $ | (28,831 | ) | $ | (6,709 | ) | $ | (31,709 | ) | $ | (8,746 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Loss from continuing operations before income tax | $ | (46,244 | ) | $ | (753,500 | ) | $ | (528,491 | ) | $ | (930,851 | ) | |||
Income tax expense (benefit) | $ | 6,235 | $ | (57,480 | ) | $ | 21,726 | $ | (69,408 | ) | |||||
Effective tax rate | (13.5 | )% | 7.6 | % | (4.1 | )% | 7.5 | % |
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | ||||||||||||||||||
2018 | 2017 | 2018 vs. 2017 | 2018 | 2017 | 2018 vs. 2017 | ||||||||||||||||
U.S. Branded - Specialty & Established Pharmaceuticals | $ | 212,637 | $ | 245,188 | (13 | )% | $ | 412,872 | $ | 495,347 | (17 | )% | |||||||||
U.S. Branded - Sterile Injectables | 217,843 | 180,292 | 21 | % | 433,697 | 352,460 | 23 | % | |||||||||||||
U.S. Generic Pharmaceuticals | 241,236 | 383,020 | (37 | )% | 490,476 | 932,835 | (47 | )% | |||||||||||||
International Pharmaceuticals (1) | 42,980 | 67,231 | (36 | )% | 78,178 | 132,689 | (41 | )% | |||||||||||||
Total net revenues from external customers | $ | 714,696 | $ | 875,731 | (18 | )% | $ | 1,415,223 | $ | 1,913,331 | (26 | )% |
(1) | Revenues generated by our International Pharmaceuticals segment are primarily attributable to external customers located in Canada and, prior to the sale of Litha on July 3, 2017 and Somar on October 25, 2017, South Africa and Latin America. |
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | ||||||||||||||||||
2018 | 2017 | 2018 vs. 2017 | 2018 | 2017 | 2018 vs. 2017 | ||||||||||||||||
Specialty Products: | |||||||||||||||||||||
XIAFLEX® | $ | 63,500 | $ | 50,077 | 27 | % | $ | 120,641 | $ | 99,602 | 21 | % | |||||||||
SUPPRELIN® LA | 19,963 | 23,649 | (16 | )% | 40,540 | 42,830 | (5 | )% | |||||||||||||
Other Specialty (1) | 36,429 | 36,745 | (1 | )% | 70,626 | 72,773 | (3 | )% | |||||||||||||
Total Specialty Products | $ | 119,892 | $ | 110,471 | 9 | % | $ | 231,807 | $ | 215,205 | 8 | % | |||||||||
Established Products: | |||||||||||||||||||||
PERCOCET® | $ | 30,833 | $ | 30,889 | — | % | $ | 62,809 | $ | 61,834 | 2 | % | |||||||||
VOLTAREN® Gel | 17,811 | 20,270 | (12 | )% | 29,128 | 34,544 | (16 | )% | |||||||||||||
OPANA® ER | — | 31,582 | (100 | )% | — | 67,300 | (100 | )% | |||||||||||||
Other Established (2) | 44,101 | 51,976 | (15 | )% | 89,128 | 116,464 | (23 | )% | |||||||||||||
Total Established Products | $ | 92,745 | $ | 134,717 | (31 | )% | $ | 181,065 | $ | 280,142 | (35 | )% | |||||||||
Total U.S. Branded - Specialty & Established Pharmaceuticals (3) | $ | 212,637 | $ | 245,188 | (13 | )% | $ | 412,872 | $ | 495,347 | (17 | )% |
(1) | Products included within Other Specialty include TESTOPEL®, NASCOBAL® Nasal Spray and AVEED®. |
(2) | Products included within Other Established include, but are not limited to, LIDODERM®, EDEX®, TESTIM® and FORTESTA® Gel, including the authorized generics. |
(3) | Individual products presented above represent the top two performing products in each product category and/or any product having revenues in excess of $25 million during any quarterly period in 2018 or 2017. |
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | ||||||||||||||||||
2018 | 2017 | 2018 vs. 2017 | 2018 | 2017 | 2018 vs. 2017 | ||||||||||||||||
VASOSTRICT® | $ | 106,329 | $ | 95,750 | 11 | % | $ | 220,054 | $ | 194,908 | 13 | % | |||||||||
ADRENALIN® | 36,658 | 19,032 | 93 | % | 66,398 | 25,129 | NM | ||||||||||||||
Other Sterile Injectables (1) | 74,856 | 65,510 | 14 | % | 147,245 | 132,423 | 11 | % | |||||||||||||
Total U.S. Branded - Sterile Injectables (2) | $ | 217,843 | $ | 180,292 | 21 | % | $ | 433,697 | $ | 352,460 | 23 | % |
(1) | Products included within Other Sterile Injectables include, but are not limited to, APLISOL®, ephedrine sulfate injection and neostigmine methylsulfate injection. |
(2) | Individual products presented above represent the top two performing products within the U.S. Branded - Sterile Injectables segment and/or any product having revenues in excess of $25 million during any quarterly period in 2018 or 2017. |
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | ||||||||||||||||||
2018 | 2017 | 2018 vs. 2017 | 2018 | 2017 | 2018 vs. 2017 | ||||||||||||||||
U.S. Branded - Specialty & Established Pharmaceuticals | $ | 83,749 | $ | 127,595 | (34 | )% | $ | 177,563 | $ | 257,087 | (31 | )% | |||||||||
U.S. Branded - Sterile Injectables | 173,308 | 140,062 | 24 | % | 342,753 | 266,529 | 29 | % | |||||||||||||
U.S. Generic Pharmaceuticals | 90,302 | 113,804 | (21 | )% | 164,582 | 328,936 | (50 | )% | |||||||||||||
International Pharmaceuticals | 18,499 | 14,812 | 25 | % | 32,217 | 29,694 | 8 | % | |||||||||||||
Total segment adjusted income from continuing operations before income tax | $ | 365,858 | $ | 396,273 | (8 | )% | $ | 717,115 | $ | 882,246 | (19 | )% |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total consolidated loss from continuing operations before income tax | $ | (46,244 | ) | $ | (753,500 | ) | $ | (528,491 | ) | $ | (930,851 | ) | |||
Interest expense, net | 130,059 | 121,747 | 254,049 | 233,746 | |||||||||||
Corporate unallocated costs (1) | 43,046 | 34,152 | 95,506 | 81,620 | |||||||||||
Amortization of intangible assets | 153,215 | 190,943 | 310,387 | 454,077 | |||||||||||
Inventory step-up | 124 | 100 | 190 | 215 | |||||||||||
Upfront and milestone payments to partners | 36,964 | 3,082 | 38,296 | 6,177 | |||||||||||
Separation benefits and other cost reduction initiatives (2) | 29,153 | 24,614 | 78,140 | 47,284 | |||||||||||
Certain litigation-related and other contingencies, net (3) | 19,620 | (2,600 | ) | 17,120 | (1,664 | ) | |||||||||
Asset impairment charges (4) | 22,767 | 725,044 | 471,183 | 929,006 | |||||||||||
Acquisition-related and integration items (5) | 5,161 | 4,190 | 11,996 | 15,070 | |||||||||||
Loss on extinguishment of debt | — | 51,734 | — | 51,734 | |||||||||||
Foreign currency impact related to the remeasurement of intercompany debt instruments | (574 | ) | (3,233 | ) | (3,088 | ) | (5,927 | ) | |||||||
Other, net (6) | (27,433 | ) | — | (28,173 | ) | 1,759 | |||||||||
Total segment adjusted income from continuing operations before income tax | $ | 365,858 | $ | 396,273 | $ | 717,115 | $ | 882,246 |
(1) | Amounts include certain corporate overhead costs, such as headcount and facility expenses and certain other income and expenses. |
(2) | Amounts primarily relate to employee separation costs of $5.4 million and $30.6 million for the three and six months ended June 30, 2018, respectively. Other amounts for the three and six months ended June 30, 2018 include accelerated depreciation of $18.1 million and $35.2 million, respectively, charges to increase excess inventory reserves of $0.2 million and $2.6 million, respectively, and other charges of $5.4 million and $9.7 million, respectively, each of which related primarily to our restructuring initiatives. During the three and six months ended June 30, 2017, amounts primarily relate to employee separation costs of $0.7 million and $21.5 million, respectively, charges to increase excess inventory reserves of $7.9 million during both periods and other charges of $16.0 million and $17.5 million, respectively, related primarily to the 2017 U.S. Generics Pharmaceuticals restructuring initiative. See Note 4. Restructuring of the Condensed Consolidated Financial Statements included in Part I, Item 1 for discussion of our material restructuring initiatives. |
(3) | Amounts include adjustments for Litigation-related and other contingencies, net as further described in Note 14. Commitments and Contingencies. |
(4) | Amounts primarily relate to charges to impair goodwill and intangible assets as further described in Note 9. Goodwill and Other Intangibles as well as charges to write down certain property, plant and equipment as further described in Note 7. Fair Value Measurements. |
(5) | Amounts during the three and six months ended June 30, 2018 are primarily related to charges due to changes in the fair value of contingent consideration of $4.1 million and $11.0 million, respectively. Amounts during the three and six months ended June 30, 2017 include charges due to changes in the fair value of contingent consideration of $2.0 million and $8.1 million, respectively. All other amounts are directly related to costs associated with acquisition and integration efforts. |
(6) | Amounts during the three and six months ended June 30, 2018 primarily relate to gains on sales of businesses and other assets, as further described in Note 17. Other income, net. |
June 30, 2018 | December 31, 2017 | ||||||
Total current assets | $ | 2,308,898 | $ | 2,271,077 | |||
Less: total current liabilities | (2,153,066 | ) | (2,220,909 | ) | |||
Working capital | $ | 155,832 | $ | 50,168 | |||
Current ratio | 1.1:1 | 1.0:1 |
2018 | 2017 | ||||||
Net cash flow provided by (used in): | |||||||
Operating activities | $ | 219,132 | $ | 339,086 | |||
Investing activities | (8,988 | ) | (41,198 | ) | |||
Financing activities | (40,793 | ) | (99,583 | ) | |||
Effect of foreign exchange rate | (1,010 | ) | 2,926 | ||||
Movement in cash held for sale | — | (21,125 | ) | ||||
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents | $ | 168,341 | $ | 180,106 |
Incorporated by Reference from: | ||||
Number | Description | File Number | Filing Type | Filing Date |
10.1 | 001-36326 | Current Report on Form 8-K | June 7, 2018 | |
10.2 | Not applicable; filed herewith | |||
10.3 | Not applicable; filed herewith | |||
10.4 | Not applicable; filed herewith | |||
10.5 | Not applicable; filed herewith | |||
10.6 | Not applicable; filed herewith | |||
31.1 | Not applicable; filed herewith | |||
31.2 | Not applicable; filed herewith | |||
32.1 | Not applicable; furnished herewith | |||
32.2 | Not applicable; furnished herewith | |||
101 | The following materials from Endo International plc’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Loss, (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to Condensed Consolidated Financial Statements | Not applicable; submitted herewith |
ENDO INTERNATIONAL PLC | |
(Registrant) | |
/s/ PAUL V. CAMPANELLI | |
Name: | Paul V. Campanelli |
Title: | President and Chief Executive Officer |
(Principal Executive Officer) | |
/s/ BLAISE COLEMAN | |
Name: | Blaise Coleman |
Title: | Executive Vice President, Chief Financial Officer |
(Principal Financial Officer) |
Name of Participant: | |
Number of Shares Subject to Option: | |
Exercise Price Per Share: | |
Date of Grant: | |
Expiration Date: | The 10th anniversary of the Date of Grant |
Vesting Dates: | Option vests ratably over the first, second, third [and fourth] anniversaries of the Date of Grant |
Classification of Option: | Non-Qualified Stock Option |
(a) | Termination of Service for Cause. Upon the Participant’s termination of service with the Company and its Subsidiaries by the Company or its Subsidiary for Cause, the portion of outstanding Options that are exercisable as of the date of such termination of service shall remain exercisable for thirty (30) days from and including the date of termination of service (and shall thereafter terminate). Any portion of outstanding Options that are not exercisable as of the date of such termination of service shall terminate upon the date of termination of service. |
(b) | Termination of Service on Account of Death. Upon the Participant’s termination of service with the Company and its Subsidiaries on account of death, all of the Participant’s unvested Options shall immediately vest and become exercisable. The Options shall remain exercisable for one (1) year from and including the date of the Participant’s death (and shall thereafter terminate). |
(c) | Termination of Service on Account of Disability or Voluntary Retirement with Consent of Company. If the Participant voluntarily Retires with the consent of the Company or if the Participant’s service with the Company and its Subsidiaries terminates due to Disability, the Participant’s unvested Options as of the date of such termination shall continue to vest in accordance with the original vesting schedule set forth above. The Options shall remain exercisable for a period of one (1) year from and including the later to occur of (i) the date such entire Option becomes exercisable in accordance with the vesting schedule and (ii) the date of termination of service (and shall thereafter terminate). |
(d) | Termination of Service by the Company without Cause or by the Participant for Good Reason. Upon termination of the Participant’s service with the Company and its Subsidiaries by the Company or its Subsidiaries without Cause or by the Participant for “good reason” or any like term (provided that such a termination is afforded protection under an employment agreement with the Company or a Subsidiary to which the Participant is a party), as modified below, the portion of outstanding Options that are exercisable as of the date of such termination of service shall remain exercisable for one (1) year from and including the date of termination of service (and shall thereafter terminate). Any portion of outstanding Options that are not exercisable as of the date of such termination of service shall terminate upon the date of termination of service. For any Participant who is a |
(e) | Termination of Service for any Other Reason. Upon the Participant’s termination of service with the Company and its Subsidiaries for any reason other than the reasons enumerated in Subparagraphs (a) through (d) above, the portion of outstanding Options that are exercisable as of the date of such termination of service shall remain exercisable for ninety (90) days from and including the date of termination of service (and shall thereafter terminate). Any portion of outstanding Options that are not exercisable as of the date of such termination of service shall terminate upon the date of termination of services. |
(a) | if the Option is assumed or substituted (within the meaning of the Plan) in connection with such Change in Control, and the Participant incurs a termination of service with the Company and its Subsidiaries by the Company or its Subsidiary without Cause or by the Participant for “good reason” or any like term (provided that such a termination is afforded protection under an employment agreement with the Company or a Subsidiary to which the Participant is a party), as modified by Section 4(d), during the 24-month period following such Change in Control, then the Option shall vest and become fully exercisable on the date of such termination of services and shall remain exercisable for one (1) year from and including the date of such termination of services (and shall thereafter terminate). |
(b) | if the Option is not assumed or substituted in connection with such Change in Control, then the Option shall immediately vest and become fully exercisable on the occurrence of the Change in Control. |
(a) | Any “Person” (as defined below) is or becomes the “beneficial owner” (“Beneficial Owner”) within the meaning set forth in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its “Affiliates” (as defined in Rule 12b-2 promulgated under Section 12 of the Exchange Act)) representing 30% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of Subparagraph (c) below; or |
(b) | The following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or |
(c) | There is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or other entity, other than (A) a merger or consolidation which results in (i) the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (ii) the individuals who comprise the Board of Directors immediately prior thereto constituting immediately thereafter at least a majority of the board of directors of the Company, the entity surviving such merger or |
(d) | The shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (it being conclusively presumed that any sale or disposition is a sale or disposition by the Company of all or substantially all of its assets if the consummation of the sale or disposition is contingent upon approval by the Company’s shareholders unless the Board of Directors expressly determines in writing that such approval is required solely by reason of any relationship between the Company and any other Person or an Affiliate of the Company and any other Person), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity (A) at least 60% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition and (B) the majority of whose board of directors immediately following such sale or disposition consists of individuals who comprise the Board of Directors immediately prior thereto. |
ENDO INTERNATIONAL PLC | |
By: | |
Name: | Paul V. Campanelli |
Title: | President & Chief Executive Officer |
PARTICIPANT | |
Signature: | |
Print Name: |
Name of Participant: | |
Number of Stock Awards: | |
Date of Grant: | |
Vesting Dates: | Stock Awards vest ratably over the first, second, third [and fourth] anniversaries of the Date of Grant |
(a) | Termination of Service for Cause. Upon the Participant’s termination of service with the Company and its Subsidiaries for Cause all of the Participant’s unvested Stock Awards shall be forfeited as of such date. |
(b) | Termination of Service on Account of Death. Upon termination of the Participant’s service with the Company and its Subsidiaries on account of death, all of the Participant’s unvested Stock Awards shall immediately vest. |
(c) | Termination of Service on Account of Voluntary Retirement with Consent of Company. If the Participant voluntarily Retires with the consent of the Company, all of the Participant’s unvested Stock Awards as of the date of termination shall continue to vest in accordance with the original vesting schedule set forth in Paragraph 2 of this Award Agreement. |
(d) | Disability. If the Participant incurs a Disability that also constitutes a “disability” within the meaning of Section 409A, all of the Participant’s unvested Stock Awards as of the date of such Disability shall continue to vest in accordance with the original vesting schedule set forth in Paragraph 2 of this Award Agreement regardless of any subsequent termination of service. |
(e) | Termination of Service by the Company without Cause or by the Participant for Good Reason. Upon termination of the Participant’s service with the Company and its Subsidiaries by the Company or its Subsidiaries without Cause or by the Participant for “good reason” or any like term (provided that such a termination is afforded protection under an employment agreement with the Company or a Subsidiary to which the Participant is a party), as modified below, Stock Awards that are unvested as of date of termination shall be forfeited. For any Participant who is a party to an employment agreement with the Company or a Subsidiary, “good reason” shall also include the Participant’s termination of his or her employment within ninety (90) days following the expiration of the employment term of the Participant’s employment agreement under circumstances that would have constituted good reason had such termination occurred during the employment term. |
(f) | Termination of Service for any Other Reason. Unless otherwise provided in an individual agreement with the Participant, if the Participant has a termination of service for any reason other than the reasons enumerated in Subparagraphs (a) through (e) above, Stock Awards that are unvested as of date of termination of services shall be forfeited. |
(a) | if the Stock Awards are assumed or substituted (within the meaning of the Plan) in connection with such Change in Control, and the Participant incurs a termination of service with the Company and its Subsidiaries by the Company or its Subsidiary without Cause or by the Participant for “good reason” or any like term (provided that such a termination is afforded protection under an employment agreement with the Company or a Subsidiary to which the Participant is a party), as modified by Section 4(e), during the 24-month period following such Change in Control, then the Stock Awards shall vest on the date of such termination of services. |
(b) | if the Stock Awards are not assumed or substituted in connection with such Change in Control, then the Stock Awards shall immediately vest upon the occurrence of the Change in Control. |
(a) | Any “Person” (as defined below) is or becomes the “beneficial owner” (“Beneficial Owner”) within the meaning set forth in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its “Affiliates” (as defined in Rule 12b-2 promulgated under Section 12 of the Exchange Act)) representing 30% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of Subparagraph (c) below; or |
(b) | The following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or |
(c) | There is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or other entity, other than (A) a merger or consolidation which results in (i) the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (ii) the individuals who comprise the Board of Directors immediately prior thereto constituting immediately thereafter at least a majority of the board of directors of the Company, the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 30% or more of the combined voting power of the Company’s then outstanding securities; or |
(d) | The shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (it being conclusively presumed that any sale or disposition is a sale or disposition by the Company of all or substantially all of its assets if the consummation of the sale or disposition is contingent upon approval by the Company’s shareholders unless the Board of Directors expressly determines in writing that such approval is required solely by reason of any relationship between the Company and any other Person or an Affiliate of the Company and any other Person), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity (A) at least 60% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition and (B) the majority of whose board of directors immediately following such sale or disposition consists of individuals who comprise the Board of Directors immediately prior thereto. |
ENDO INTERNATIONAL PLC | |
By: | |
Name: | Paul V. Campanelli |
Title: | President & Chief Executive Officer |
PARTICIPANT | |
Signature: | |
Print Name: |
Name of Participant: | |
Total Target Performance Award (Total Number of Restricted Stock Units Underlying the Target Performance Award): | |
Date of Grant: | |
Performance Period for the TSR Performance Award: | The period beginning on the Date of Grant and ending on the third anniversary of the Date of Grant. |
Performance Period for the FCF Performance Award: | Each of three successive annual periods, the first of which begins on the first day of the Company’s fiscal year that includes the Date of Grant. |
ENDO INTERNATIONAL PLC | |
By: | |
Name: | Paul V. Campanelli |
Title: | President & Chief Executive Officer |
PARTICIPANT | |
Signature: | |
Print Name: |
Relative TSR | Multiple Applicable to TSR Target Performance Award |
Equal to or above 90th percentile | 2 |
Equal to or above 80th percentile but below 90th percentile | 1.61 - 1.80 |
Equal to or above 70th percentile but below 80th percentile | 1.41 - 1.60 |
Equal to or above 60th percentile but below 70th percentile | 1.21 - 1.40 |
Equal to or above 50th percentile but below 60th percentile | 1.00 - 1.20 |
Equal to or above 40th percentile but below 50th percentile | 0.5 |
Below 40th percentile | 0 |
Free Cash Flow* | Multiple Applicable to FCF Performance Award for the FCF Performance Period |
Equal to or greater than 110% of Target | 2 |
Equal to or greater than 107.5% of Target but less than 110% of Target | 1.75 |
Equal to or greater than 105% of Target but less than 107.5% of Target | 1.5 |
Equal to or greater than 102.5% of Target but less than 105% of Target | 1.25 |
Equal to or greater than 100% of Target but less than 102.5% of Target | 1 |
Equal to or greater than 97.5% of Target but less than 100% of Target | 0.75 |
Equal to or greater than 95% of Target but less than 97.5% of Target | 0.5 |
Less than 95% of Target | 0 |
Name of Participant: | |
Number of Cash-Settled Restricted Stock Units Subject to Award: | |
Date of Grant: | |
Vesting Dates: | Award vests ratably over the first, second and third anniversaries of the Date of Grant |
(a) | Termination of Service for Cause. Upon the Participant’s termination of service with the Company and its Subsidiaries for Cause, the unvested portion of the Participant’s Award shall be forfeited as of such date. |
(b) | Termination of Service on Account of Death. Upon termination of the Participant’s service with the Company and its Subsidiaries on account of death, the unvested portion of the Participant’s Award shall immediately vest. |
(c) | Termination of Service on Account of Voluntary Retirement with Consent of Company. If the Participant voluntarily Retires with the consent of the Company, the unvested portion of the Participant’s Award as of the date of termination shall continue to vest in accordance with the original vesting schedule set forth in Paragraph 2 of this Award Agreement. |
(d) | Disability. If the Participant incurs a Disability that also constitutes a “disability” within the meaning of Section 409A, the unvested portion of the Participant’s Award as of the date of such Disability shall continue to vest in accordance with the original vesting schedule set forth in Paragraph 2 of this Award Agreement regardless of any subsequent termination of service. |
(e) | Termination of Service by the Company without Cause or by the Participant for Good Reason. Upon termination of the Participant’s service with the Company and its Subsidiaries by the Company or its Subsidiaries without Cause or by the Participant for “good reason” or any like term (provided that such a termination is afforded protection under an employment agreement with the Company or a Subsidiary to which the Participant is a party), as modified below, any portion of the Award that is unvested as of date of termination shall be forfeited. For any Participant who is a party to an employment agreement with the Company or a Subsidiary, “good reason” shall also include the Participant’s termination of his or her employment within ninety (90) days following the expiration of the employment term of the Participant’s employment agreement under circumstances that would have constituted good reason had such termination occurred during the employment term. |
(f) | Termination of Service for any Other Reason. Unless otherwise provided in an individual agreement with the Participant, if the Participant has a termination of service for any reason other than the reasons enumerated in Subparagraphs (a) through (e) above, any portion of the Participant’s Award that is unvested as of date of termination of service shall be forfeited. |
(a) | if the Award is assumed or substituted (within the meaning of the Plan) in connection with such Change in Control, and the Participant incurs a termination of service with the Company and its Subsidiaries by the Company or its Subsidiary without Cause or by the Participant for “good reason” or any like term (provided that such a termination is afforded protection under an employment agreement with the Company or a Subsidiary to which the Participant is a party), as modified by Section 4(e), during the 24-month period following such Change in Control, then the Award shall vest on the date of such termination of service. |
(b) | if the Award is not assumed or substituted in connection with such Change in Control, then the Award shall immediately vest upon the occurrence of the Change in Control. |
(a) | Any “Person” (as defined below) is or becomes the “beneficial owner” (“Beneficial Owner”) within the meaning set forth in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its “Affiliates” (as defined in Rule 12b-2 promulgated under Section 12 of the Exchange Act)) representing 30% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of Subparagraph (c) below; or |
(b) | The following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or |
(c) | There is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or other entity, other than (A) a merger or consolidation which results in (i) the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (ii) the individuals who comprise the Board of Directors immediately prior thereto constituting immediately thereafter at least a majority of the board of directors of the Company, the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a subsidiary, the ultimate parent thereof, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 30% or more of the combined voting power of the Company’s then outstanding securities; or |
(d) | The shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (it being conclusively presumed that any sale or disposition is a sale or disposition by the Company of all or substantially all of its assets if the consummation of the sale or disposition is contingent upon approval by the Company’s shareholders unless the Board of Directors expressly determines in writing that such approval is required solely by reason of any relationship between the Company and any other Person or an Affiliate of the Company and any other Person), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity (A) at least 60% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition and (B) the majority of whose board of directors immediately following such sale or disposition consists of individuals who comprise the Board of Directors immediately prior thereto. |
ENDO INTERNATIONAL PLC | |
By: | |
Name: | Paul V. Campanelli |
Title: | President & Chief Executive Officer |
PARTICIPANT | |
Signature: | |
Print Name: |
ARTICLE I INTRODUCTION | 1 | ||
1.1. | Purpose | 1 | |
1.2. | Effective Date | 1 | |
1.3. | Type of Plan | 1 | |
ARTICLE II DEFINITIONS | 2 | ||
2.1. | “Account” | 2 | |
2.2. | “Administrator” | 2 | |
2.3. | “Affiliate” | 2 | |
2.4. | “Base Salary” | 2 | |
2.5. | “Beneficiary” | 2 | |
2.6. | “Board” | 2 | |
2.7. | “Change in Control” | 2 | |
2.8. | “Code” | 3 | |
2.9. | “Committee” | 3 | |
2.10. | “Company” | 3 | |
2.11. | “Company Stock” | 3 | |
2.12. | “Deferrable Compensation” | 3 | |
2.13. | “Election Form” | 4 | |
2.14. | “Eligible Employee” | 4 | |
2.15. | “Employer” | 4 | |
2.16. | “Endo plc” | 4 | |
2.17. | “Endo plc Board” | 4 | |
2.18. | “ERISA” | 4 | |
2.19. | “Fair Market Value” | 4 | |
2.20. | “Incentive Compensation” | 4 | |
2.21. | “Installment Payment” | 5 | |
2.22. | “Leave of Absence” | 5 | |
2.23. | “Lump Sum Payment” | 5 | |
2.24. | “Participant” | 5 | |
2.25. | “Payment Date” | 5 | |
2.26. | “Performance-Based Compensation” | 5 | |
2.27. | “Plan” | 5 | |
2.28. | “Plan Year” | 5 | |
2.29. | “Restricted Stock Unit” | 5 | |
2.30. | “Specified Employee” | 5 | |
2.31. | “Termination of Employment” | 6 |
2.32. | “Unforeseeable Emergency” | 6 | |
ARTICLE III PARTICIPATION BY ELIGIBLE EMPLOYEES | 7 | ||
3.1. | Participation | 7 | |
3.2. | Cessation of Participation | 7 | |
3.3. | Ineligible Status | 7 | |
ARTICLE IV PARTICIPANT DEFERRALS | 8 | ||
4.1. | Deferral Elections - General | 8 | |
4.2. | First Year of Eligibility | 8 | |
4.3. | Deferral of Incentive Compensation | 8 | |
4.4. | Deferral of Restricted Stock Units | 8 | |
4.5. | Cessation of Deferral Elections | 9 | |
4.6. | Changes to Deferral Elections | 9 | |
ARTICLE V DISTRIBUTIONS | 10 | ||
5.1. | Time and Form of Payment | 10 | |
5.2. | Permissible Distributions | 10 | |
5.3. | Permissible Acceleration of Payment | 11 | |
5.4. | Permissible Delay of Payments | 12 | |
5.5. | Payment Deemed Timely | 12 | |
5.6. | Valuation of Distributions | 13 | |
ARTICLE VI ACCOUNTS | 14 | ||
6.1. | Account | 14 | |
6.2. | Crediting of Earnings on Non-Stock Compensation | 14 | |
6.3. | Crediting of Earnings on Restricted Stock Units | 14 | |
6.4. | Statement of Account | 15 | |
6.5. | Vesting | 15 | |
ARTICLE VII FUNDING AND PARTICIPANTS INTEREST | 16 | ||
7.1. | Plan Unfunded | 16 | |
7.2. | Establishment of Grantor Trust | 16 | |
7.3. | Participants’ Interest in Plan | 16 | |
ARTICLE VIII ADMINISTRATION AND INTERPRETATION | 17 | ||
8.1. | Administration | 17 | |
8.2. | Interpretation | 17 | |
8.3. | Records and Reports | 17 | |
8.4. | Payment of Expenses | 17 | |
8.5. | Indemnification for Liability | 17 | |
8.6. | Claims Procedure | 17 | |
8.7. | Review Procedure | 18 |
8.8. | Legal Claims | 18 | |
8.9. | Participant and Beneficiary Information | 18 | |
ARTICLE IX AMENDMENT AND TERMINATION | 19 | ||
9.1. | Amendment | 19 | |
9.2. | Termination of Plan | 19 | |
ARTICLE X MISCELLANEOUS PROVISIONS | 21 | ||
10.1. | Right of Employer to Take Employment Actions | 21 | |
10.2. | Alienation or Assignment of Benefits | 21 | |
10.3. | Company’s Protection | 21 | |
10.4. | Construction | 21 | |
10.5. | Headings | 21 | |
10.6. | Number and Gender | 21 | |
10.7. | Right to Withhold | 21 |
/S/ PAUL V. CAMPANELLI | |
Paul V. Campanelli | |
President and Chief Executive Officer (Principal Executive Officer) | |
Date: | August 8, 2018 |
/S/ BLAISE COLEMAN | |
Blaise Coleman | |
Executive Vice President, Chief Financial Officer (Principal Financial Officer) | |
Date: | August 8, 2018 |
/S/ PAUL V. CAMPANELLI | |||
Name: | Paul V. Campanelli | ||
Title: | President and Chief Executive Officer (Principal Executive Officer) |
/S/ BLAISE COLEMAN | |||
Name: | Blaise Coleman | ||
Title: | Executive Vice President, Chief Financial Officer (Principal Financial Officer) |
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 31, 2018 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ENDP | |
Entity Registrant Name | Endo International plc | |
Entity Central Index Key | 0001593034 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Ordinary Shares Outstanding | 223,931,072 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Euro deferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Euro deferred shares, shares authorized | 4,000,000 | 4,000,000 |
Euro deferred shares, shares issued | 4,000,000 | 4,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 223,929,771 | 223,331,706 |
Common stock, shares outstanding | 223,929,771 | 223,331,706 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Statement [Abstract] | ||||
TOTAL REVENUES | $ 714,696 | $ 875,731 | $ 1,415,223 | $ 1,913,331 |
COSTS AND EXPENSES: | ||||
Cost of revenues | 381,905 | 539,401 | 785,503 | 1,208,363 |
Selling, general and administrative | 148,157 | 155,555 | 314,824 | 332,795 |
Research and development | 82,102 | 40,869 | 120,748 | 83,878 |
Litigation-related and other contingencies, net | 19,620 | (2,600) | 17,120 | (1,664) |
Asset impairment charges | 22,767 | 725,044 | 471,183 | 929,006 |
Acquisition-related and integration items | 5,161 | 4,190 | 11,996 | 15,070 |
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS | 54,984 | (586,728) | (306,151) | (654,117) |
INTEREST EXPENSE, NET | 130,059 | 121,747 | 254,049 | 233,746 |
LOSS ON EXTINGUISHMENT OF DEBT | 0 | (51,734) | 0 | (51,734) |
OTHER INCOME, NET | (28,831) | (6,709) | (31,709) | (8,746) |
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | (46,244) | (753,500) | (528,491) | (930,851) |
INCOME TAX EXPENSE (BENEFIT) | 6,235 | (57,480) | 21,726 | (69,408) |
LOSS FROM CONTINUING OPERATIONS | (52,479) | (696,020) | (550,217) | (861,443) |
DISCONTINUED OPERATIONS, NET OF TAX (NOTE 3) | (8,388) | (700,498) | (16,139) | (708,903) |
NET LOSS | $ (60,867) | $ (1,396,518) | $ (566,356) | $ (1,570,346) |
NET LOSS PER SHARE—BASIC: | ||||
Continuing operations (in dollars per share) | $ (0.23) | $ (3.12) | $ (2.46) | $ (3.86) |
Discontinued operations (in dollars per share) | (0.04) | (3.14) | (0.07) | (3.18) |
Basic (in dollars per share) | (0.27) | (6.26) | (2.53) | (7.04) |
NET LOSS PER SHARE—DILUTED: | ||||
Continuing operations (in dollars per share) | (0.23) | (3.12) | (2.46) | (3.86) |
Discontinued operations (in dollars per share) | (0.04) | (3.14) | (0.07) | (3.18) |
Diluted (in dollars per share) | $ (0.27) | $ (6.26) | $ (2.53) | $ (7.04) |
WEIGHTED AVERAGE SHARES: | ||||
Basic (shares) | 223,834 | 223,158 | 223,677 | 223,086 |
Diluted (shares) | 223,834 | 223,158 | 223,677 | 223,086 |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
NET LOSS | $ (60,867) | $ (1,396,518) | $ (566,356) | $ (1,570,346) |
Net unrealized gain on securities, net of tax: | ||||
Unrealized gain arising during the period | 491 | 145 | ||
Less: reclassification adjustments for (gain) loss realized in net loss | 0 | 0 | 0 | 0 |
Net unrealized gain (loss) on securities | 0 | 491 | 0 | 145 |
Net unrealized (loss) gain on foreign currency: | ||||
Foreign currency translation (loss) gain arising during the period | (5,971) | 10,340 | (11,768) | 25,474 |
Less: reclassification adjustments for (gain) loss realized in net loss | 0 | 0 | 0 | 0 |
Foreign currency translation gain (loss) | (5,971) | 10,340 | (11,768) | 25,474 |
OTHER COMPREHENSIVE (LOSS) INCOME | (5,971) | 10,831 | (11,768) | 25,619 |
COMPREHENSIVE LOSS | $ (66,838) | $ (1,385,687) | $ (578,124) | $ (1,544,727) |
Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION | NOTE 1. BASIS OF PRESENTATION Endo International plc is an Ireland-domiciled, global specialty pharmaceutical company focused on generic and branded pharmaceuticals. We aim to be the premier partner to healthcare professionals and payment providers, delivering an innovative suite of generic and branded drugs to meet patients’ needs. Unless otherwise indicated or required by the context, references throughout to “Endo,” the “Company,” “we,” “our,” or “us” refer to financial information and transactions of Endo International plc and its subsidiaries. The accompanying unaudited Condensed Consolidated Financial Statements of Endo International plc and its subsidiaries have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying Condensed Consolidated Financial Statements of Endo International plc and its subsidiaries, which are unaudited, include all normal and recurring adjustments necessary for a fair statement of the Company’s financial position as of June 30, 2018 and the results of our operations and our cash flows for the periods presented. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The year-end Condensed Consolidated Balance Sheet data as of December 31, 2017 was derived from audited financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our Consolidated Financial Statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2017. Certain prior period amounts have been reclassified to conform to the current period presentation as a result of our fourth-quarter 2017 adoption of Accounting Standards Update (ASU) No. 2016-18 “Statement of Cash Flows (Topic 230) - Restricted Cash” (ASU 2016-18). The table below presents the effects of ASU 2016-18 on the Company’s Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2017 (in thousands):
__________
Additionally, the information in this Quarterly Report on Form 10-Q has been retrospectively recast to reflect the change in reportable segments referenced in Note 6. Segment Results. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies Updated since December 31, 2017 Significant changes to our significant accounting policies since December 31, 2017 are detailed below. For additional discussion of the Company’s significant accounting policies, see Note 2. Summary of Significant Accounting Policies in the Consolidated Financial Statements, included in Part IV, Item 15 of our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on February 27, 2018. Revenue Recognition. The Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) on January 1, 2018 using the modified retrospective method for all revenue-generating contracts, including modifications thereto, that were not completed contracts at the date of adoption. For further discussion of the impact of adoption, refer to the “Recent Accounting Pronouncements Adopted or Otherwise Effective as of June 30, 2018” section below. ASC 606 applies to contracts with commercial substance that establish the payment terms and each party’s rights regarding the goods or services to be transferred, to the extent collection of substantially all of the related consideration is probable. Under ASC 606, we recognize revenue for contracts meeting these criteria when (or as) we satisfy our performance obligations for such contracts by transferring control of the underlying promised goods or services to our customers. The amount of revenue we recognize reflects our estimate of the consideration we expect to be entitled to receive, subject to certain constraints, in exchange for such goods or services. This amount is referred to as the transaction price. Our revenue consists almost entirely of sales of our pharmaceutical products to customers, whereby we ship product to a customer pursuant to a purchase order and invoice the customer upon shipment. For contracts such as these, revenue is recognized when our contractual performance obligations have been fulfilled and control has been transferred to the customer pursuant to the contract’s terms, which is generally upon delivery to the customer. The amount of revenue we recognize is equal to the fixed amount of the transaction price, adjusted for our estimates of a number of significant variable components including, but not limited to, estimates for chargebacks, rebates, sales incentives and allowances, distribution service agreement (DSA) and other fees for services, returns and allowances. The Company utilizes the expected value method when estimating the amount of variable consideration to include in the transaction price with respect to each of the foregoing variable components and the most likely amount method when estimating the amount of variable consideration to include in the transaction price with respect to future potential milestone payments that do not qualify for the sales- and usage-based royalty exception. Variable consideration is included in the transaction price only to the extent that it is probable that a significant revenue reversal will not occur when the uncertainty associated with the variable consideration is resolved. Payment terms for these types of contracts generally fall within 30 to 90 days of invoicing. Our most significant components of variable consideration are further described below. Our estimates for these components are based on factors such as historical experience, estimated future trends, estimated customer inventory levels, current contract sales terms with our direct and indirect customers and other competitive factors. Returns and Allowances. Consistent with industry practice, we maintain a return policy that allows our customers to return product within a specified period of time both subsequent to and, in certain cases, prior to the product’s expiration date. Our return policy generally allows customers to receive credit for expired products within six months prior to expiration and within one year after expiration. Our provision for returns and allowances consists of our estimates for future product returns, pricing adjustments and delivery errors. Rebates. Our provision for rebates, sales incentives and other allowances can generally be categorized into the following four types:
We establish contracts with wholesalers, chain stores and indirect customers that provide for rebates, sales incentives, DSA fees and other allowances. Some customers receive rebates upon attaining established sales volumes. Direct rebates are generally rebates paid to direct purchasing customers based on a percentage applied to a direct customer’s purchases from us, including fees paid to wholesalers under our DSAs, as described above. Indirect rebates are rebates paid to indirect customers which have purchased our products from a wholesaler under a contract with us. We are subject to rebates on sales made under governmental and managed-care pricing programs based on relevant statutes with respect to governmental pricing programs and contractual sales terms with respect to managed-care providers and group purchasing organizations. For example, we are required to provide a 50% discount on our brand-name drugs to patients who fall within the Medicare Part D coverage gap, also referred to as the donut hole. We participate in various federal and state government-managed programs whereby discounts and rebates are provided to participating government entities. For example, Medicaid rebates are amounts owed based upon contractual agreements or legal requirements with public sector (Medicaid) benefit providers after the final dispensing of the product by a pharmacy to a benefit plan participant. Chargebacks. We market and sell products to both: (i) direct customers including wholesalers, distributors, warehousing pharmacy chains and other direct purchasing groups and (ii) indirect customers including independent pharmacies, non-warehousing chains, managed-care organizations, group purchasing organizations and government entities. We enter into agreements with certain of our indirect customers to establish contract pricing for certain products. These indirect customers then independently select a wholesaler from which to purchase the products at these contracted prices. Alternatively, we may pre-authorize wholesalers to offer specified contract pricing to other indirect customers. Under either arrangement, we provide credit to the wholesaler for any difference between the contracted price with the indirect customer and the wholesaler’s invoice price. Such credit is called a chargeback. New Significant Accounting Policies Added since December 31, 2017 Contract Assets and Contract Liabilities. Contract assets represent the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditioned on something other than the passage of time including, for example, the entity’s future performance. The Company records revenue and a corresponding contract asset when it fulfills a contractual performance obligation, but must also fulfill one or more additional performance obligations before being entitled to payment. Once the Company’s right to consideration becomes unconditional, the contract asset amount is reclassified as Accounts receivable. Contract liabilities represent the Company’s obligation to transfer goods or services to a customer. The Company records a contract liability generally upon receipt of consideration in advance of fulfilling one or more of its contractual performance obligations. Upon completing the corresponding performance obligation, the contract liability amount is reversed and revenue is recognized. Contract assets and liabilities related to rights and obligations arising from a single contract, or a series of contracts combined and accounted for as a single contract, are generally presented on a net basis. Contract assets and liabilities are further described in Note 11. Contract Assets and Liabilities. Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted as of June 30, 2018 In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, “Leases (Topic 842)” (ASU 2016-02) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, lessees are required to recognize a lease liability, which represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use asset on the balance sheet for most leases. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases” (ASU 2018-10), which provides narrow amendments to clarify how to apply certain aspects of the new lease standard, and ASU No. 2018-11, “Leases (Topic 842) - Targeted Improvements” (ASU 2018-11), which addresses implementation issues related to the new lease standard. This guidance will be effective for the Company beginning in the first quarter of 2019, with early application permitted, and the Company plans to adopt this guidance in the first quarter of 2019. The Company is continuing to evaluate the impact that this new guidance will have on its consolidated financial statements, including its disclosures and the method of adoption. It is expected that the primary impact upon adoption will be the recognition, on a discounted basis, of the Company’s minimum commitments under noncancelable operating leases as right of use assets and obligations on the consolidated balance sheets. This will result in a significant increase in assets and liabilities on the Company’s consolidated balance sheets. In preparation for the adoption of this guidance, the Company is continuing the process of identifying and validating the Company’s lease information and evaluating the impact that this new guidance will have on its processes and controls. In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (ASU 2018-02). ASU 2018-02 allows for a reclassification from accumulated other comprehensive income or loss to retained earnings or accumulated deficit for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (TCJA). ASU 2018-02 also requires certain related disclosures. ASU 2018-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2018-02 on the Company’s consolidated results of operations and financial position. In July 2018, the FASB issued ASU No. 2018-09, “Codification Improvements” (ASU 2018-09). ASU 2018-09 makes changes to a variety of topics to clarify, correct errors in or make minor improvements to the Accounting Standards Codification. Certain of these provisions are effective immediately; however, these provisions did not have a material impact on the Company’s financial statements or disclosures. The remaining provisions are generally effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. The Company is currently evaluating the impact of these remaining provisions of ASU 2018-09 on the Company’s consolidated results of operations and financial position. Recent Accounting Pronouncements Adopted or Otherwise Effective as of June 30, 2018 In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09), which was subsequently amended and supplemented by several additional ASUs including:
These ASUs have generally been codified in Accounting Standards Codification Topic 606 “Revenue from Contracts with Customers”, and are collectively referred to herein as ASC 606. ASC 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (ASC 605), and requires entities to recognize revenue when control of promised goods or services is transferred to customers at an amount that reflects the consideration to which entities expect to be entitled in exchange for those goods or services. The Company adopted ASC 606 on January 1, 2018 using the modified retrospective method for all revenue-generating contracts, including modifications thereto, that were not completed contracts at the date of adoption. Under the modified retrospective method, results beginning on January 1, 2018 are presented under ASC 606, while the comparative prior period results continue to be presented under ASC 605 based on the accounting standards originally in effect for such periods. As a result of adopting ASC 606, the Company recorded a net decrease of $3.1 million to its accumulated deficit at January 1, 2018, representing the cumulative impact of adopting ASC 606. The current period impact of adoption on our Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets is as follows (in thousands):
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In May 2017, the FASB issued ASU No. 2017-09 “Compensation - Stock Compensation” (ASU 2017-09). ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. It is intended to reduce both (1) diversity in practice and (2) cost and complexity when accounting for changes to the terms or conditions of share-based payment awards. ASU 2017-09 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted the new standard on January 1, 2018 and the amendments in this update will be applied prospectively to any award modified on or after the adoption date. |
Discontinued Operations and Divestitures |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS AND DIVESTITURES | NOTE 3. DISCONTINUED OPERATIONS AND DIVESTITURES Astora The Company’s Astora business ceased business operations on March 31, 2016. The operating results of Astora are reported as Discontinued operations, net of tax in the Condensed Consolidated Statements of Operations for all periods presented. The following table provides the operating results of Astora Discontinued operations, net of tax for the three and six months ended June 30, 2018 and 2017 (in thousands):
Amounts reported in the table above as Litigation-related and other contingencies, net primarily relate to charges for vaginal-mesh-related matters, which are further described in Note 14. Commitments and Contingencies. Loss from discontinued operations before income taxes also includes mesh-related legal defense costs and certain other items. The cash flows from discontinued operating activities related to Astora included the impact of net losses of $16.1 million and $708.9 million for the six months ended June 30, 2018 and 2017, respectively, and the impact of cash activity related to vaginal mesh cases, which is further described in Note 14. Commitments and Contingencies. There was no net cash used in discontinued investing activities related to Astora during the six months ended June 30, 2018 or 2017. There was no depreciation or amortization during the six months ended June 30, 2018 or 2017 related to Astora. Litha During the fourth quarter of 2016, the Company initiated a process to sell its Litha Healthcare Group Limited and related Sub-Sahara African business assets (Litha) and, on February 27, 2017, the Company entered into a definitive agreement to sell Litha to Acino Pharma AG (Acino). The sale closed on July 3, 2017 and the Company received net cash proceeds of approximately $94.2 million, after giving effect to cash and net working capital purchase price adjustments, as well as a short-term receivable of $4.4 million, which was subsequently collected in October 2017. No additional gain or loss was recognized upon sale. However, in December 2017, Acino became obligated to pay $10.1 million of additional consideration to the Company related to the settlement of certain contingencies set forth in the purchase agreement, which was subsequently paid to the Company in January 2018. In December 2017, the Company recorded a short-term receivable and a gain on the sale of Litha for this amount. The gain was recorded in Other income, net in the Condensed Consolidated Statements of Operations. Litha was part of the Company’s International Pharmaceuticals segment. Litha does not meet the requirements for treatment as a discontinued operation. Somar On June 30, 2017, the Company entered into a definitive agreement to sell Grupo Farmacéutico Somar, S.A.P.I. de C.V. (Somar) and all of the securities thereof, to AI Global Investments (Netherlands) PCC Limited acting for and on behalf of the Soar Cell (the Purchaser). The sale closed on October 25, 2017 and the Purchaser paid an aggregate purchase price of approximately $124 million in cash, after giving effect to estimated cash, debt and net working capital purchase price adjustments. The Company recognized a $1.3 million loss upon sale. Somar was part of the Company’s International Pharmaceuticals segment. Somar does not meet the requirements for treatment as a discontinued operation. |
Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING | NOTE 4. RESTRUCTURING January 2017 Restructuring Initiative On January 26, 2017, the Company announced a restructuring initiative implemented as part of its ongoing organizational review (the January 2017 Restructuring Initiative). This restructuring was intended to further integrate, streamline and optimize the Company’s operations by aligning certain corporate and research and development (R&D) functions with its recently restructured U.S. generics and U.S. branded business units in order to create efficiencies and cost savings. As part of this restructuring, the Company undertook certain cost reduction initiatives, including a reduction of approximately 90 positions of its workforce, primarily related to corporate and branded R&D functions in Malvern, Pennsylvania and Chestnut Ridge, New York, a streamlining of general and administrative expenses, an optimization of commercial spend and a refocusing of research and development efforts. The Company did not incur any pre-tax charges during the three and six months ended June 30, 2018 as a result of the January 2017 Restructuring Initiative. During the six months ended June 30, 2017, the Company incurred total pre-tax charges of approximately $15.1 million related to employee separation and other benefit-related costs. Of the total charges incurred, $6.9 million was included in the U.S. Branded - Specialty & Established Pharmaceuticals segment, $4.9 million was included in Corporate unallocated costs and $3.3 million was included in the U.S. Generic Pharmaceuticals segment. These charges were included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. There were no charges related to this restructuring initiative for the three months ended June 30, 2017. The Company does not expect to incur additional material pre-tax restructuring-related expenses related to this initiative. Substantially all cash payments were made by the end of 2017 and substantially all of the actions associated with this restructuring were completed by the end of April 2017. 2017 U.S. Generic Pharmaceuticals Restructuring Initiative On July 21, 2017, the Company announced that after completing a comprehensive review of its manufacturing network, the Company would be ceasing operations and closing its manufacturing and distribution facilities in Huntsville, Alabama (the 2017 U.S. Generic Pharmaceuticals Restructuring Initiative). The closure of the facilities was completed in June 2018. Employee separation, retention and certain other employee benefit-related costs are expensed ratably over the requisite service period. Other costs including, but not limited to, contract termination fees and product technology transfer costs, are expensed as incurred. As a result of the 2017 U.S. Generic Pharmaceuticals Restructuring Initiative, the Company incurred pre-tax charges of $27.1 million and $54.8 million during the three and six months ended June 30, 2018, respectively. During the three months ended June 30, 2018, the expenses consisted of charges relating to accelerated depreciation of $18.0 million, employee separation, retention and other benefit-related costs of $3.9 million and certain other charges of $5.2 million. During the six months ended June 30, 2018, the expenses consisted of charges relating to accelerated depreciation of $35.2 million, employee separation, retention and other benefit-related costs of $7.7 million, asset impairment charges of $2.6 million and certain other charges of $9.3 million. During both the three and six months ended June 30, 2017, the Company incurred pre-tax charges of $109.3 million, consisting of certain intangible asset and property, plant and equipment impairment charges of $89.5 million, charges to increase excess inventory reserves of $7.9 million and certain other charges of $11.9 million. These charges are included in the U.S. Generic Pharmaceuticals segment. Accelerated depreciation and employee separation, retention and other benefit-related costs are included in Cost of revenues. Certain other charges are included in both Cost of revenues and Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The Company expects to incur approximately $3.6 million of other miscellaneous additional pre-tax restructuring-related expenses related to this initiative. Substantially all cash payments are expected to be made by the end of the third quarter in 2019. The liability related to the 2017 U.S. Generic Pharmaceuticals Restructuring Initiative is primarily included in Accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets. Changes to this liability during the six months ended June 30, 2018 were as follows (in thousands):
January 2018 Restructuring Initiative In January 2018, the Company initiated a restructuring initiative that included a reorganization of its U.S. Generic Pharmaceuticals segment’s research and development network, a further simplification of the Company’s manufacturing networks and a company-wide unification of certain corporate functions (the January 2018 Restructuring Initiative). As a result of the January 2018 Restructuring Initiative, the Company expects total related pre-tax charges of approximately $25 million, substantially all of which will result in cash outlays. The estimated restructuring charges consist of employee separation, retention and other benefit-related costs of approximately $23 million and certain other charges of approximately $2 million. Employee separation, retention and certain other employee benefit-related costs are expensed ratably over the requisite service period. Other costs are expensed as incurred. As a result of the January 2018 Restructuring Initiative, the Company incurred pre-tax charges of $0.9 million and $23.8 million during the three and six months ended June 30, 2018, respectively. During the three months ended June 30, 2018, the expenses primarily consisted of employee separation, retention and other benefit-related costs of $0.7 million and certain other charges of $0.2 million. Of the total charges incurred, $0.6 million are included in the U.S. Generic Pharmaceuticals segment, $0.1 million are included in the International Pharmaceuticals segment and $0.2 million are included in the U.S. Branded - Sterile Injectables segment. During the six months ended June 30, 2018, the expenses primarily consisted of employee separation, retention and other benefit-related costs of $22.6 million and certain other charges of $1.2 million. Of the total charges incurred, $10.8 million are included in the U.S. Generic Pharmaceuticals segment, $5.2 million are included in Corporate unallocated costs, $4.0 million are included in the U.S. Branded - Sterile Injectables segment, $3.1 million are included in the International Pharmaceuticals segment and $0.7 million are included in the U.S. Branded - Specialty & Established Pharmaceuticals segment. Employee separation, retention and other benefit-related costs are included in Cost of revenues, Selling, general and administrative and Research and development expenses in the Condensed Consolidated Statements of Operations. Certain other charges are primarily included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The Company does not expect to incur additional material pre-tax restructuring-related expenses related to this initiative. Substantially all cash payments are expected to be made by the end of the first quarter in 2019. The liability related to the January 2018 Restructuring Initiative is primarily included in Accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets. Changes to this liability during the six months ended June 30, 2018 were as follows (in thousands):
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Acquisitions |
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Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 5. ACQUISITIONS On April 26, 2018, the Company entered into a Membership Interest and Asset Purchase Agreement (the Somerset Purchase Agreement) with Mendham Holdings, LLC (the Seller) and certain other Seller related parties in connection with the acquisition of all of the limited liability company membership interests (the LLC Interests) of Somerset Therapeutics, LLC (Somerset) and certain of Somerset’s assets, including intellectual property, product Abbreviated New Drug Applications (ANDAs) and inventory (the Somerset Assets). Somerset is a specialty pharmaceutical company that develops and markets sterile injectable and ophthalmic drugs for the U.S. market. The Somerset acquisition is contingent upon the closing of the acquisition of the Indian-based Wintac business (as defined below). Pursuant to the terms of the Somerset Purchase Agreement, the Company will acquire 100% of the LLC Interests of Somerset and the Somerset Assets for an aggregate cash purchase price of approximately $160 million, subject to customary adjustments for cash, net working capital and indebtedness as described in the Somerset Purchase Agreement. The Somerset Purchase Agreement contains certain customary representations, warranties and covenants and provides for indemnification rights of the parties in respect of inaccuracies or breaches of certain representations, warranties and covenants, subject to the limitations set forth in the Somerset Purchase Agreement. The Somerset acquisition is expected to close in the second half of 2018, subject to satisfaction of customary closing conditions, including required regulatory approvals and the closing of the acquisition of the Wintac business. In connection with the Somerset acquisition, the Company’s Indian subsidiary has entered into separate agreements to acquire the entire business of Somerset’s Indian-based contract development and manufacturing affiliate, Wintac Limited (Wintac), including certain real property in Bangalore, India and the manufacturing plants thereon and to assume certain debt of Wintac for the expected aggregate amount of the rupee equivalent of approximately $30 million, subject to customary adjustments for net working capital. |
Segment Results |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT RESULTS | NOTE 6. SEGMENT RESULTS As of January 1, 2018, we made changes to our reportable segments. Following these changes, the four reportable business segments in which we operate are: (1) U.S. Branded - Specialty & Established Pharmaceuticals, (2) U.S. Branded - Sterile Injectables, (3) U.S. Generic Pharmaceuticals and (4) International Pharmaceuticals. Previously, we had three reportable segments: (1) U.S. Generic Pharmaceuticals, (2) U.S. Branded Pharmaceuticals and (3) International Pharmaceuticals. The updates to our reportable segments were made based on first quarter 2018 changes to the way we manage and evaluate our business. Our new U.S. Branded - Sterile Injectables segment consists of our sterile injectables product portfolio, which was previously part of our former U.S. Generic Pharmaceuticals segment. Our new U.S. Generic Pharmaceuticals segment represents the remainder of our former U.S. Generic Pharmaceuticals segment. Additionally, our former U.S. Branded Pharmaceuticals segment has been renamed “U.S. Branded - Specialty & Established Pharmaceuticals.” Our segments reflect the level at which the chief operating decision maker regularly reviews financial information to assess performance and to make decisions about resources to be allocated. Each segment derives revenue from the sales or licensing of its respective products and is discussed in more detail below. We evaluate segment performance based on each segment’s adjusted income from continuing operations before income tax, which we define as Loss from continuing operations before income tax and before certain upfront and milestone payments to partners; acquisition-related and integration items, including transaction costs, earn-out payments or adjustments, changes in the fair value of contingent consideration and bridge financing costs; cost reduction and integration-related initiatives such as separation benefits, retention payments, other exit costs and certain costs associated with integrating an acquired company’s operations; asset impairment charges; amortization of intangible assets; inventory step-up recorded as part of our acquisitions; litigation-related and other contingent matters; gains or losses from early termination of debt; gains or losses from the sales of businesses and other assets; foreign currency gains or losses on intercompany financing arrangements; and certain other items. Certain of the corporate expenses incurred by the Company are not attributable to any specific segment. Accordingly, these costs are not allocated to any of the Company’s segments and are included in the results below as “Corporate unallocated costs.” Interest income and expense are also considered corporate items and not allocated to any of the Company’s segments. The Company’s consolidated adjusted income from continuing operations before income tax is equal to the combined results of each of its segments less these unallocated corporate items. U.S. Branded - Specialty & Established Pharmaceuticals Our U.S. Branded - Specialty & Established Pharmaceuticals segment includes a variety of branded prescription products to treat and manage conditions in urology, urologic oncology, endocrinology, pain and orthopedics. The products in this segment include XIAFLEX®, SUPPRELIN® LA, TESTOPEL®, NASCOBAL® Nasal Spray, AVEED®, PERCOCET®, VOLTAREN® Gel, LIDODERM®, EDEX®, TESTIM® and FORTESTA® Gel, among others. U.S. Branded - Sterile Injectables Our U.S. Branded - Sterile Injectables segment consists primarily of branded sterile injectable products such as VASOSTRICT®, ADRENALIN® and APLISOL®, among others, and certain generic sterile injectable products, including ephedrine sulfate injection and neostigmine methylsulfate injection, among others. U.S. Generic Pharmaceuticals Our U.S. Generic Pharmaceuticals segment consists of a differentiated product portfolio including solid oral extended-release, solid oral immediate-release, abuse-deterrent products, liquids, semi-solids, patches, powders, ophthalmics and sprays and includes products in the pain management, urology, central nervous system disorders, immunosuppression, oncology, women’s health and cardiovascular disease markets, among others. International Pharmaceuticals Our International Pharmaceuticals segment includes a variety of specialty pharmaceutical products sold outside the U.S., primarily in Canada through our operating company Paladin Labs Inc. (Paladin). This segment’s key products serve growing therapeutic areas, including attention deficit hyperactivity disorder (ADHD), pain, women’s health and oncology. This segment also included: (i) our South African Litha business, which was sold in July 2017, and (ii) our Latin American Somar business, which was sold in October 2017. The following represents selected information for the Company’s reportable segments for the three and six months ended June 30, 2018 and 2017 (in thousands):
__________
There were no material revenues from external customers attributed to an individual country outside of the United States during any of the periods presented. There were no material tangible long-lived assets in an individual country other than the United States as of June 30, 2018 or December 31, 2017. The table below provides reconciliations of our consolidated Loss from continuing operations before income tax, which is determined in accordance with U.S. generally accepted accounting principles (U.S. GAAP), to our total segment adjusted income from continuing operations before income tax for the three and six months ended June 30, 2018 and 2017 (in thousands):
__________
Asset information is not reviewed or included within our internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment. The Company disaggregates its revenue from contracts with customers into the categories included in the table below (in thousands). The Company believes these categories depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors.
__________
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | NOTE 7. FAIR VALUE MEASUREMENTS Financial Instruments The financial instruments recorded in our Condensed Consolidated Balance Sheets include cash and cash equivalents (including money market funds and time deposits), restricted cash and cash equivalents, accounts receivable, marketable securities, equity and cost method investments, accounts payable and accrued expenses, acquisition-related contingent consideration and debt obligations. Included in cash and cash equivalents and restricted cash and cash equivalents are money market funds representing a type of mutual fund required by law to invest in low-risk securities (for example, U.S. government bonds, U.S. Treasury Bills and commercial paper). Money market funds pay dividends that generally reflect short-term interest rates. Due to their short-term maturity, the carrying amounts of non-restricted and restricted cash and cash equivalents (including money market funds and time deposits), accounts receivable, accounts payable and accrued expenses approximate their fair values. At June 30, 2018 and December 31, 2017, the Company had combined restricted cash and cash equivalents of $380.6 million and $324.4 million, respectively, of which $358.2 million and $320.5 million, respectively, are classified as current assets and reported in our Condensed Consolidated Balance Sheets as Restricted cash and cash equivalents. The remaining amounts, which are classified as non-current assets, are reported in our Condensed Consolidated Balance Sheets as Other assets. Approximately $292.5 million and $313.8 million of our restricted cash and cash equivalents are held in qualified settlement funds (QSFs) for mesh-related matters at June 30, 2018 and December 31, 2017, respectively. The remaining amount of restricted cash and cash equivalents at June 30, 2018 primarily relates to other litigation-related matters. See Note 14. Commitments and Contingencies for further information. Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:
Marketable Securities Equity securities consist of investments in the stock of publicly traded companies, the values of which are based on quoted market prices and thus represent Level 1 measurements within the above-defined fair value hierarchy. These securities are not held to support current operations and are therefore classified as non-current assets. Equity securities are included in Marketable securities in our Condensed Consolidated Balance Sheets at June 30, 2018 and December 31, 2017. Acquisition-Related Contingent Consideration The fair value of contingent consideration liabilities is determined using unobservable inputs; hence these instruments represent Level 3 measurements within the above-defined fair value hierarchy. These inputs include the estimated amount and timing of projected cash flows, the probability of success (achievement of the contingent event) and the risk-adjusted discount rate used to present value the probability-weighted cash flows. Subsequent to the acquisition date, at each reporting period, the contingent consideration liability is remeasured at current fair value with changes recorded in earnings. Changes in any of the inputs may result in a significant adjustment to fair value. See Recurring Fair Value Measurements below for additional information on acquisition-related contingent consideration. Recurring Fair Value Measurements The Company’s financial assets and liabilities measured at fair value on a recurring basis at June 30, 2018 and December 31, 2017 were as follows (in thousands):
At June 30, 2018 and December 31, 2017, money market funds include $93.8 million and $35.6 million, respectively, in QSFs to be disbursed to mesh-related or other product liability claimants. Amounts in QSFs are considered restricted cash equivalents. See Note 14. Commitments and Contingencies for further discussion of our product liability cases. The differences between the amortized cost and fair value of our money market funds and equity securities were not material, individually or in the aggregate, at June 30, 2018 or December 31, 2017, nor were any of the related gross unrealized gains or losses. Fair Value Measurements Using Significant Unobservable Inputs The following table presents changes to the Company’s liability for acquisition-related contingent consideration, which was measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2018 and 2017 (in thousands):
At June 30, 2018, the fair value measurements of the contingent consideration obligations were determined using risk-adjusted discount rates ranging from 10% to 22% (weighted average rate of approximately 15%). Changes in fair value recorded in earnings related to acquisition-related contingent consideration are included in our Condensed Consolidated Statements of Operations as Acquisition-related and integration items, and amounts recorded for the short-term and long-term portions of acquisition-related contingent consideration are included in Accounts payable and accrued expenses and Other liabilities, respectively, in our Condensed Consolidated Balance Sheets. The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the six months ended June 30, 2018 by acquisition (in thousands):
Nonrecurring Fair Value Measurements The Company’s financial assets and liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2018 were as follows (in thousands):
__________
Additionally, the Company recorded aggregate goodwill impairment charges during the six months ended June 30, 2018 of $391.0 million. Refer to Note 9. Goodwill and Other Intangibles for further description, including the valuation methodologies utilized. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | NOTE 8. INVENTORIES Inventories consist of the following at June 30, 2018 and December 31, 2017 (in thousands):
__________ (1) The components of inventory shown in the table above are net of allowance for obsolescence. Inventory that is in excess of the amount expected to be sold within one year, which relates primarily to XIAFLEX® inventory, is classified as long-term inventory and is not included in the table above. At June 30, 2018 and December 31, 2017, $11.3 million and $17.1 million, respectively, of long-term inventory was included in Other assets in the Condensed Consolidated Balance Sheets. As of June 30, 2018 and December 31, 2017, the Company’s Condensed Consolidated Balance Sheets included approximately $8.6 million and $5.9 million, respectively, of capitalized pre-launch inventories related to generic products that were not yet available to be sold. |
Goodwill And Other Intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLES | NOTE 9. GOODWILL AND OTHER INTANGIBLES Goodwill Changes in the carrying amount of our goodwill for the six months ended June 30, 2018 were as follows (in thousands):
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The carrying amounts of goodwill at June 30, 2018 and December 31, 2017 are net of the following accumulated impairments (in thousands):
Other Intangible Assets Changes in the amount of other intangible assets for the six months ended June 30, 2018 are set forth in the table below (in thousands).
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Amortization expense for the three and six months ended June 30, 2018 totaled $153.2 million and $310.4 million, respectively. Amortization expense for the three and six months ended June 30, 2017 totaled $190.9 million and $454.1 million, respectively. Amortization expense is included in Cost of revenues in the Condensed Consolidated Statements of Operations. Estimated amortization of intangibles for the five fiscal years subsequent to December 31, 2017 is as follows (in thousands):
Impairments Endo tests goodwill and indefinite-lived intangible assets for impairment annually, or more frequently whenever events or changes in circumstances indicate that the asset might be impaired. Our annual assessment is performed as of October 1st. As part of our goodwill and intangible asset impairment assessments, we estimate the fair values of our reporting units and our intangible assets using an income approach that utilizes a discounted cash flow model or, where appropriate, a market approach. The discounted cash flow models are dependent upon our estimates of future cash flows and other factors. These estimates of future cash flows involve assumptions concerning (i) future operating performance, including future sales, long-term growth rates, operating margins, tax rates, variations in the amount and timing of cash flows and the probability of achieving the estimated cash flows and (ii) future economic conditions. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The discount rates applied to the estimated cash flows are based on the overall risk associated with the particular assets and other market factors. We believe the discount rates and other inputs and assumptions are consistent with those that a market participant would use. Any impairment charges resulting from annual or interim goodwill and intangible asset impairment assessments are recorded to Asset impairment charges in our Condensed Consolidated Statements of Operations. During the three and six months ended June 30, 2018 and 2017, the Company incurred the following goodwill and other intangible asset impairment charges:
A summary of significant goodwill and other intangible asset impairment tests and related charges is included below. Other intangible asset impairment charges that are not included in the below narrative totaled $22.8 million and $309.4 million during the three months ended June 30, 2018 and 2017, respectively, and $77.0 million and $382.8 million during the six months ended June 30, 2018 and 2017, respectively. These charges relate primarily to certain in-process research and development and/or developed technology intangible assets that were tested for impairment following changes in market conditions and certain other factors impacting recoverability. Our first quarter 2018 change in segments described in Note 6. Segment Results resulted in changes to our reporting units for goodwill impairment testing purposes, including the creation of a new U.S. Branded - Sterile Injectables reporting unit, which was previously part of our Generics reporting unit. As a result of these changes, under U.S. GAAP, we tested the goodwill of the former Generics reporting unit immediately before the segment realignment and the goodwill of both the new U.S. Branded - Sterile Injectables and U.S. Generic Pharmaceuticals reporting units immediately after the segment realignment. These goodwill tests were performed using an income approach that utilizes a discounted cash flow model. The results of these goodwill impairment tests were as follows:
In March 2017, we announced that the Food and Drug Administration’s (FDA) Drug Safety and Risk Management and Anesthetic and Analgesic Drug Products Advisory Committees voted that the benefits of reformulated OPANA® ER (oxymorphone hydrochloride extended release) no longer outweigh its risks. In June 2017, we became aware of the FDA’s request that we voluntarily withdraw OPANA® ER from the market, and in July 2017, after careful consideration and consultation with the FDA, we decided to voluntarily remove OPANA® ER from the market. As a result of our decision, the Company determined that the carrying amount of its OPANA® ER intangible asset was no longer recoverable, resulting in a pre-tax, non-cash impairment charge of $20.6 million in the second quarter of 2017, representing the remaining carrying amount. As a result of the withdrawal of OPANA® ER from the market and the continued erosion of our U.S. Branded Pharmaceuticals segment’s Established Products portfolio, we initiated an interim goodwill impairment analysis of our Branded reporting unit during the second quarter of 2017. We recorded a pre-tax, non-cash goodwill impairment charge of $180.4 million during the three months ended June 30, 2017 for the amount by which the carrying amount exceeded the reporting unit’s fair value. We estimated the fair value of the Branded reporting unit using an income approach that utilized a discounted cash flow model. The discount rate applied to the estimated cash flows for our Branded goodwill impairment test was 9.5%. As further described in Note 4. Restructuring, the Company announced the 2017 U.S. Generic Pharmaceuticals restructuring initiative in July 2017, which includes the discontinuation of certain commercial products. As a result, the Company assessed the recoverability of the impacted products, resulting in pre-tax, non-cash intangible asset impairment charges of approximately $57.5 million during the second quarter of 2017. The Company also initiated an interim goodwill impairment analysis of its Generics reporting unit during the second quarter of 2017 as a result of the 2017 U.S. Generic Pharmaceuticals restructuring initiative and determined that the estimated fair value of the Generics reporting unit exceeded its carrying amount. Accordingly, no related goodwill impairment was recorded. The Company estimated the fair value of the Generics reporting unit using an income approach that utilized a discounted cash flow model. The discount rate applied to the estimated cash flows for our Generics goodwill impairment test was 9.0%. Pursuant to an existing agreement with a wholly owned subsidiary of Novartis AG (Novartis), Paladin licensed the Canadian rights to commercialize serelaxin, an investigational drug for the treatment of acute heart failure (AHF). In March 2017, Novartis announced that a Phase 3 study of serelaxin in patients with AHF failed to meet its primary endpoints. As a result, we concluded that the full carrying amount of our serelaxin in-process research and development intangible asset was impaired, resulting in a $45.5 million pre-tax non-cash impairment charge for the three months ended March 31, 2017. In addition and as a result of the serelaxin impairment, we assessed the recoverability of our Paladin goodwill balance and determined that the estimated fair value of the Paladin reporting unit was below its carrying amount. We recorded a pre-tax, non-cash goodwill impairment charge of $82.6 million during the three months ended March 31, 2017 for the amount by which the carrying amount exceeded the reporting unit’s fair value. We estimated the fair value of the Paladin reporting unit using an income approach that utilized a discounted cash flow model. The discount rate applied to the estimated cash flows for our Paladin goodwill impairment test was 10.0%. As further discussed in Note 3. Discontinued Operations and Divestitures, we entered into a definitive agreement to sell Somar on June 30, 2017, which resulted in Somar’s assets and liabilities being classified as held for sale. The initiation of held-for-sale accounting, together with the agreed upon sale price, triggered an impairment review. Accordingly, we performed an impairment analysis using a market approach and determined that impairment charges were required. We recorded pre-tax, non-cash impairment charges of $25.7 million and $89.5 million related to Somar’s goodwill and other intangible assets, respectively, during the second quarter of 2017, each of which represented the remaining carrying amounts of the corresponding assets. |
License And Collaboration Agreements |
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License And Collaboration Agreements [Abstract] | |
LICENSE AND COLLABORATION AGREEMENTS | NOTE 10. LICENSE AND COLLABORATION AGREEMENTS Our subsidiaries have entered into certain license, collaboration and discovery agreements with third parties for product development. These agreements require our subsidiaries to share in the development costs of such products and the third parties grant marketing rights to our subsidiaries for such products. Generally, under these agreements: (i) we are required to make upfront payments and other payments upon successful completion of regulatory or sales milestones, (ii) we are required to pay royalties on sales of the products arising from these agreements and (iii) termination is permitted with no significant continuing obligation. During the three months ended June 30, 2018, we entered into a development, license and commercialization agreement with a third party pharmaceutical company related to five sterile injectable product candidates. Pursuant to this agreement, the third party will generally be responsible, at its expense, to develop and seek regulatory approval for these product candidates, and the Company will generally be responsible, at its expense, to launch and distribute any products that are approved. The Company will have exclusive license rights to all of these products launched in the U.S. and a first right of refusal for the Canadian territory. Upon entering into this agreement, the Company became obligated to make an upfront payment, which was recorded as Research and development expense in the Condensed Consolidated Statements of Operations during the three months ended June 30, 2018. The Company could become obligated to make additional payments based on certain potential future milestones being achieved. There have been no other significant changes to our license, collaboration and discovery agreements since our Annual Report on Form 10-K for the year ended December 31, 2017. |
Contract Assets and Liabilities |
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Contract with Customer, Asset and Liability [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Assets and Liabilities | NOTE 11. CONTRACT ASSETS AND LIABILITIES Our revenue consists almost entirely of sales of our pharmaceutical products to customers, whereby we ship product to a customer pursuant to a purchase order. Revenue contracts such as these do not generally give rise to contract assets or contract liabilities because: (i) the underlying contracts generally have only a single performance obligation and (ii) we do not generally receive consideration until the performance obligation is fully satisfied. At June 30, 2018, the unfulfilled performance obligations for these types of contracts relate to ordered but undelivered product. We generally expect to fulfill the performance obligations and recognize revenue within one week of entering into the underlying contract. Based on the short-term initial contract duration, additional disclosure about the remaining performance obligations is not required. Certain of our other revenue-generating contracts, including license and collaboration agreements, may result in contract assets and/or contract liabilities. For example, we may recognize contract liabilities upon receipt of certain upfront and milestone payments from customers when there are remaining performance obligations. The following table shows the opening and closing balances of contract assets and contract liabilities from contracts with customers (dollars in thousands):
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During the six months ended June 30, 2018, we recognized revenue of $0.5 million relating to performance obligations satisfied, or partially satisfied, in prior periods. Such revenue generally relates to changes in estimates with respect to our variable consideration. |
Accounts Payable And Accrued Expenses |
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Accounts Payable And Accrued Expenses | NOTE 12. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses include the following at June 30, 2018 and December 31, 2017 (in thousands):
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | NOTE 13. DEBT The following table presents information about the Company’s total indebtedness at June 30, 2018 and December 31, 2017 (in thousands):
The senior unsecured notes are unsecured and effectively subordinated in right of priority to our credit agreement (the 2017 Credit Agreement) and our senior secured notes, in each case to the extent of the value of the collateral securing such instruments, which collateral represents substantially all of the assets of the issuers or borrowers and the guarantors party thereto. The aggregate estimated fair value of the Company’s long-term debt, which was estimated using inputs based on quoted market prices for the same or similar debt issuances, was $7.5 billion at both June 30, 2018 and December 31, 2017. Based on this valuation methodology, we determined these debt instruments represent Level 2 measurements within the fair value hierarchy. Credit Facility We have $996.8 million of remaining credit available through our Revolving Credit Facility as of June 30, 2018. As of June 30, 2018, we were in compliance with all covenants contained in our credit agreement. |
Commitments And Contingencies |
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COMMITMENTS AND CONTINGENCIES | NOTE 14. COMMITMENTS AND CONTINGENCIES Legal Proceedings and Investigations We and certain of our subsidiaries are involved in various claims, legal proceedings, internal and governmental investigations (collectively, proceedings) that arise from time to time in the ordinary course of our business, including, among others, those relating to product liability, intellectual property, regulatory compliance, consumer protection and commercial matters. While we cannot predict the outcome of these proceedings and we intend to vigorously prosecute or defend our position as appropriate, there can be no assurance that we will be successful or obtain any requested relief, and an adverse outcome in any of these proceedings could have a material adverse effect on our current and future financial position, results of operations and cash flows. Matters that are not being disclosed herein are, in the opinion of our management, immaterial both individually and in the aggregate with respect to our financial position, results of operations and cash flows. If and when such matters, in the opinion of our management, become material either individually or in the aggregate, we will disclose such matters. We believe that certain settlements and judgments, as well as legal defense costs, relating to certain product liability or other matters are or may be covered in whole or in part under our insurance policies with a number of insurance carriers. In certain circumstances, insurance carriers reserve their rights to contest or deny coverage. We intend to contest vigorously any and all such disputes with our insurance carriers and to enforce our rights under the terms of our insurance policies. Accordingly, we will record receivables with respect to amounts due under these policies only when the resolution of any dispute has been reached and realization of the potential claim for recovery is considered probable. Amounts recovered under our insurance policies could be less than the stated coverage limits and may not be adequate to cover damages and/or costs relating to claims. In addition, there is no guarantee that insurers will pay claims or that coverage will otherwise be available. As of June 30, 2018, our accrual for loss contingencies totaled $1,160.5 million, of which $930.0 million relates to our liability accrual for vaginal mesh cases and other mesh-related matters. During the fourth quarter of 2017, the Company recorded a total increase to its legal accruals of approximately $200 million related to testosterone-related product liability matters and LIDODERM®-related antitrust matters, which reflects the Company’s conclusion that a loss is probable with respect to these matters. The accrual for LIDODERM®-related matters includes an estimated loss for, among other matters, settlement of all remaining claims filed against EPI in multidistrict litigation (MDL) No. 2521, which is further discussed below under the heading “Other Antitrust Matters.” The testosterone-related accrual includes an estimated loss for, among other matters, all testosterone-related product liability cases filed in MDL No. 2545 and in other courts. These cases are further discussed below under the heading “Product Liability and Related Matters.” Although we believe there is a reasonable possibility that a loss in excess of the amount recognized exists, we are unable to estimate the possible loss or range of loss in excess of the amount recognized at this time. Product Liability and Related Matters We and certain of our subsidiaries have been named as defendants in numerous lawsuits in various U.S. federal and state courts, as well as in Canada and other countries, alleging personal injury resulting from the use of certain products of our subsidiaries. These and other related matters are described below in more detail. Vaginal Mesh. Since 2008, we and certain of our subsidiaries, including American Medical Systems Holdings, Inc. (subsequently converted to Astora Women’s Health Holding LLC and merged into Astora Women’s Health LLC and referred to herein as AMS) and/or Astora, have been named as defendants in multiple lawsuits in various state and federal courts in the U.S. (including a federal MDL pending in the U.S. District Court for the Southern District of West Virginia (MDL No. 2325)), and in Canada and other countries, alleging personal injury resulting from the use of transvaginal surgical mesh products designed to treat pelvic organ prolapse (POP) and stress urinary incontinence (SUI). In January 2018, a representative proceeding (class action) was filed in the Federal Court of Australia against American Medical Systems, LLC. In the various class action and individual complaints, plaintiffs claim a variety of personal injuries, including chronic pain, incontinence, inability to control bowel function and permanent deformities, and seek compensatory and punitive damages, where available. We and certain plaintiffs’ counsel representing mesh-related product liability claimants have entered into various Master Settlement Agreements (MSAs) and other agreements to resolve up to approximately 71,000 filed and unfiled mesh claims handled or controlled by the participating counsel. These MSAs and other agreements were entered into at various times between June 2013 and the present, were solely by way of compromise and settlement and were not in any way an admission of liability or fault by us or any of our subsidiaries. All MSAs are subject to a process that includes guidelines and procedures for administering the settlements and the release of funds. In certain cases, the MSAs provide for the creation of QSFs into which funds may be deposited pursuant to certain schedules set forth in those agreements. All MSAs have participation requirements regarding the claims represented by each law firm party to the MSA. In addition, one agreement gives us a unilateral right of approval regarding which claims may be eligible to participate under that settlement. To the extent fewer claims than are authorized under an agreement participate, the total settlement payment under that agreement will be reduced by an agreed-upon amount for each such non-participating claim. Funds deposited in QSFs are included in restricted cash and cash equivalents in the Condensed Consolidated Balance Sheets. Distribution of funds to any individual claimant is conditioned upon the receipt of documentation substantiating the validity of the claim, a full release and dismissal of the entire action or claim as to all AMS parties and affiliates. Prior to receiving funds, an individual claimant is required to represent and warrant that liens, assignment rights or other claims identified in the claims administration process have been or will be satisfied by the individual claimant. Confidentiality provisions apply to the amount of settlement awards to participating claimants, the claims evaluation process and procedures used in conjunction with award distributions, and the negotiations leading to the settlements. In June 2017, the MDL court entered a case management order which, among other things, requires plaintiffs in newly-filed MDL cases to provide expert disclosures on specific causation within one hundred twenty (120) days of filing a claim (the Order). Under the Order, a plaintiff's failure to meet the foregoing deadline may be grounds for the entry of judgment against such plaintiff. In July 2017, a similar order was entered in Minnesota state court. Although the Company believes it has appropriately estimated the probable total amount of loss associated with all matters as of the date of this report, it is reasonably possible that further claims may be filed or asserted and adjustments to our liability accrual may be required. This could have a material adverse effect on our business, financial condition, results of operations and cash flows. The following table presents the changes in the QSFs and mesh liability accrual balance during the six months ended June 30, 2018 (in thousands):
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As of June 30, 2018, $869.2 million of the mesh liability accrual amount shown above is classified in the Current portion of the legal settlement accrual in the Condensed Consolidated Balance Sheets, with the remainder classified as Long-term legal settlement accrual, less current portion. Charges related to vaginal mesh liability and associated legal fees and other expenses for all periods presented are reported in Discontinued operations, net of tax in our Condensed Consolidated Statements of Operations. To date, the Company has made total mesh liability payments of approximately $3.0 billion, $292.5 million of which remains in the QSFs as of June 30, 2018. We expect to fund into the QSFs the remaining payments under all settlement agreements during the remainder of 2018 and 2019. As the funds are disbursed out of the QSFs from time to time, the liability accrual will be reduced accordingly with a corresponding reduction to restricted cash and cash equivalents. In addition, we may pay cash distributions to settle disputes separate from the QSFs, which will also decrease the liability accrual and decrease cash and cash equivalents. We were contacted in October 2012 regarding a civil investigation initiated by a number of state attorneys general into mesh products, including transvaginal surgical mesh products designed to treat POP and SUI. In November 2013, we received a subpoena relating to this investigation from the state of California, and we have subsequently received additional subpoenas from California and other states. We are cooperating with these investigations. We will continue to vigorously defend any unresolved claims and to explore other options as appropriate in our best interests. Similar matters may be brought by others or the foregoing matters may be expanded. We are unable to predict the outcome of these matters or to estimate the possible range of any additional losses that could be incurred. Testosterone. Various manufacturers of prescription medications containing testosterone, including our subsidiaries Endo Pharmaceuticals Inc. (EPI) and Auxilium Pharmaceuticals, Inc. (subsequently converted to Auxilium Pharmaceuticals, LLC and hereinafter referred to as Auxilium), have been named as defendants in multiple lawsuits alleging personal injury resulting from the use of such medications, including FORTESTA® Gel, DELATESTRYL®, TESTIM®, TESTOPEL®, AVEED® and STRIANT®. Plaintiffs in these suits generally allege various personal injuries, including pulmonary embolism, stroke or other vascular and/or cardiac injuries, and seek compensatory and/or punitive damages, where available. As of July 31, 2018, we were aware of approximately 1,254 testosterone cases (some of which may have been filed on behalf of multiple plaintiffs) pending against one or more of our subsidiaries in federal or state court. Many of these cases have been coordinated in a federal MDL pending in the U.S. District Court for the Northern District of Illinois (MDL No. 2545). In November 2015, the MDL court entered an order granting defendants’ motion to dismiss claims involving certain testosterone products that were approved pursuant to ANDAs, including TESTOPEL®. Plaintiffs filed a motion for reconsideration and clarification of this order. In March 2016, the MDL court granted plaintiffs’ motion in part and entered an order permitting certain claims to go forward to the extent they are based on allegations of fraudulent off-label marketing. An MDL trial against Auxilium involving TESTIM® took place in November 2017 and resulted in a defense verdict. A trial against Auxilium involving TESTIM® was scheduled for January 2018 in the Philadelphia Court of Common Pleas (PCCP) but resolved prior to trial. In June 2018, counsel for plaintiffs, on the one hand, and Auxilium and EPI, on the other, executed an MSA allowing for the resolution of all known testosterone replacement therapy product liability claims against our subsidiaries. The MSA was solely by way of compromise and settlement and was not in any way an admission of fault by us or any of our subsidiaries. The MSA is subject to a process that includes guidelines and procedures for administering the settlement and the release of funds. Among other things, the MSA provides for the creation of a QSF into which the settlement funds will be deposited, establishes participation requirements, and allows for a reduction of the total settlement payment in the event the participation threshold is not met. Distribution of funds to any individual claimant is conditioned upon the receipt of documentation substantiating product use and injury as determined by a third-party special master, the dismissal of any lawsuit and the release of the claim as to us and all affiliates. Prior to receiving funds, an individual claimant must represent and warrant that liens, assignment rights or other claims identified in the claims administration process have been or will be satisfied by the individual claimant. Confidentiality provisions apply to the settlement funds, amounts allocated to individual claimants and other terms of the agreement. Although the Company believes it has appropriately estimated the probable total amount of loss associated with testosterone-related product liability matters as of the date of this report, it is reasonably possible that further claims may be filed or asserted and adjustments to our liability accrual may be required. This could have a material adverse effect on our business, financial condition, results of operations and cash flows. The MDL also includes a lawsuit filed in November 2014 in the U.S. District for the Northern District of Illinois against EPI, Auxilium and various other manufacturers of testosterone products on behalf of a proposed class of health insurance companies and other third party payers that claim to have paid for certain testosterone products. After a series of motions to dismiss, plaintiff filed a third amended complaint in April 2016, asserting civil claims for alleged violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and negligent misrepresentation based on defendants’ marketing of certain testosterone products. The court denied a motion to dismiss this complaint in August 2016. In July 2018, the court denied plaintiff’s motion for class certification. This lawsuit is not part of the settlement described above. We will continue to vigorously defend any unresolved claims and to explore other options as appropriate in our best interests. Similar matters may be brought by others or the foregoing matters may be expanded. We are unable to predict the outcome of these matters or to estimate the possible range of any additional losses that could be incurred. Unapproved Drug Litigation In September 2013, the State of Louisiana filed a petition for damages against certain of our subsidiaries, including EPI, and more than 50 other pharmaceutical companies in Louisiana state court (19th Judicial District) alleging that the defendants or their subsidiaries marketed products that were not approved by the FDA and seeking damages, fines, penalties, attorneys’ fees and costs under various causes of action. In October 2015, the district court entered judgment for defendants on their exception for no right of action. The State appealed, and in October 2016 the Louisiana First Circuit Court of Appeals reversed the dismissal as to the State’s Medicaid Assistance Program Integrity Law (MAPIL) and Louisiana Unfair Trade Practices Act (LUTPA) claims but affirmed the dismissal as to the State’s other claims. The State’s petition for rehearing was denied in December 2016. Both sides applied to the Louisiana Supreme Court for a writ of certiorari to review the First Circuit’s decision. Those writs were denied in March 2017. In May 2017, defendants filed exceptions for no cause of action in the district court. In August 2017, the court sustained defendants’ exception as to the MAPIL claim but overruled defendants’ exception as to the LUTPA claim. The State then filed a motion seeking reconsideration with respect to the MAPIL claim, and defendants filed a motion for clarification with respect to the court’s ruling on the LUTPA claim. In October 2017, the court denied the State’s motion and entered final judgment against the State with respect to the MAPIL claim. The court also granted defendants’ motion for clarification and dismissed the State’s LUTPA claim insofar as it sought civil penalties for alleged violations occurring before June 2, 2006. In October 2017, defendants applied for a supervisory writ to the Louisiana First Circuit Court of Appeals on the district court’s August 2017 order overruling defendants’ exception on the State’s LUTPA claim. The First Circuit Court of Appeals denied defendants’ writ application in July 2018. In March 2017, the State of Mississippi filed a complaint against our subsidiary EPI in Mississippi state court (Hinds County Chancery Court) alleging that EPI marketed products that were not approved by the FDA and seeking damages, penalties, attorneys’ fees, costs and other relief under various causes of action. In April 2017, EPI removed the case to the U.S. District Court for the Southern District of Mississippi. In May 2017, the State moved to remand the case to state court, and that motion was granted in October 2017. In November 2017, EPI filed a motion to dismiss the State’s complaint on various grounds. In January 2018, the State filed a motion for leave to amend its complaint. In February 2018, following an unopposed motion by the State, the court consolidated the State’s case against EPI with five substantially similar cases brought by the State against other defendants. The consolidation is solely for purposes of coordinated pretrial proceedings and discovery, not for trial. In March 2018, the court signed an Agreed Order dismissing EPI and granting the State leave to file a first amended complaint. The first amended complaint names our subsidiary Generics International (US), Inc. (Generics) as the defendant. In April 2018, Generics moved to dismiss on various grounds. We will continue to vigorously defend the foregoing matters and to explore other options as appropriate in our best interests. Similar matters may be brought by others or the foregoing matters may be expanded. We are unable to predict the outcome of these matters or to estimate the possible range of any losses that could be incurred. Opioid-Related Matters Since 2014, multiple U.S. states, counties, other governmental persons or entities and private plaintiffs have filed suit against certain of our subsidiaries, including Endo Health Solutions Inc. (EHSI), EPI, Par Pharmaceutical, Inc. (PPI), Par Pharmaceutical Companies, Inc. (Par), Vintage Pharmaceuticals, LLC and/or Generics Bidco I, LLC and, in some instances, the Company, as well as various other manufacturers, distributors and/or others, asserting claims relating to defendants’ alleged sales, marketing and/or distribution practices with respect to prescription opioid medications, including certain of our products. As of July 31, 2018, the cases of which we were aware include, but are not limited to, approximately 11 cases filed by states; approximately 1,221 cases filed by counties, cities, Native American tribes and/or other government-related persons or entities; approximately 78 cases filed by hospitals, health systems, unions, health and welfare funds or other third-party payers; and approximately 26 cases filed by individuals. Certain of the cases have been filed as putative class actions. Many of these cases have been coordinated in a federal MDL pending in the U.S. District Court for the Northern District of Ohio (MDL No. 2804). In March 2018, the U.S. Department of Justice (DOJ) filed a statement of interest in the case, and in April 2018 it filed a motion to participate in settlement discussions and as a friend of the court, which the MDL court has granted. The MDL court has issued a series of case management orders permitting motions to dismiss addressing threshold legal issues in certain cases, setting a trial date in 2019 for three cases originally filed in the Northern District of Ohio, allowing certain discovery and establishing certain other deadlines and procedures, among other things. Other cases remain pending in various state courts. In some jurisdictions, such as Connecticut, Illinois, New York, Pennsylvania and Texas, certain state court cases have been transferred to a single court within their respective state court systems for coordinated pretrial proceedings. The state cases are generally at the pleading and/or discovery stage. The complaints in the cases assert a variety of claims including, but not limited to, claims for alleged violations of public nuisance, consumer protection, unfair trade practices, racketeering, Medicaid fraud and/or drug dealer liability statutes and/or common law claims for public nuisance, fraud/misrepresentation, strict liability, negligence and/or unjust enrichment. The claims are generally based on alleged misrepresentations and/or omissions in connection with the sale and marketing of prescription opioid medications and/or an alleged failure to take adequate steps to prevent abuse and diversion. Plaintiffs generally seek declaratory and/or injunctive relief; compensatory, punitive and/or treble damages; restitution, disgorgement, civil penalties, abatement, attorneys’ fees, costs and/or other relief. We will continue to vigorously defend the foregoing matters and to explore other options as appropriate in our best interests. Similar matters may be brought by others or the foregoing matters may be expanded. We are unable to predict the outcome of these matters or to estimate the possible range of any losses that could be incurred. In addition to the lawsuits described above, the Company and/or its subsidiaries have received certain subpoenas, civil investigative demands (CIDs) and informal requests for information concerning the sale, marketing and/or distribution of prescription opioid medications, including the following: In September 2017, the Department of Justice for the State of Oregon and the Office of the Attorney General for the Commonwealth of Massachusetts issued CIDs to EHSI and EPI on behalf of a multistate group which we understand currently includes the District of Columbia and the following additional states: Arizona, California, Colorado, Connecticut, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Michigan, Minnesota, Nebraska, Nevada, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin and Wyoming. Our subsidiaries are cooperating with this investigation. We understand that these CIDs superseded prior subpoenas and/or CIDs issued by certain of the foregoing states. Other states are conducting their own investigations outside of the multistate group. These states include New Hampshire (subpoenas received by EPI in August 2015 and December 2017); New Jersey (subpoena received by EPI in March 2017); Washington (CID received by the Company, EHSI and EPI in August 2017); Indiana (CID received by EHSI and EPI in November 2017); Montana (CID received by EHSI and EPI in January 2018); Alaska (CID received by EPI in February 2018); and South Carolina (CID received by EHSI and EPI in February 2018). We are cooperating with these investigations. In January 2018, our subsidiary EPI received a federal grand jury subpoena from the U.S. District Court for the Southern District of Florida in connection with an investigation being conducted by the U.S. Attorney’s Office for the Southern District of Florida in conjunction with the U.S. Food and Drug Administration. The subpoena seeks information related to OPANA® ER and other oxymorphone products. EPI is cooperating with the investigation. Similar investigations may be brought by others or the foregoing matters may be expanded or result in litigation. We are unable to predict the outcome of these matters or to estimate the possible range of any losses that could be incurred. Generic Drug Pricing Matters In December 2014, we received a grand jury subpoena from the Antitrust Division of the DOJ issued by the U.S. District Court for the Eastern District of Pennsylvania to Par Pharmaceuticals. The subpoena requested documents and information focused primarily on product and pricing information relating to Par’s authorized generic version of Lanoxin (digoxin) oral tablets and Par’s generic doxycycline products, and on communications with competitors and others regarding those products. We are cooperating with the investigation. In December 2015, EPI received interrogatories and a subpoena from the Connecticut Attorney General’s Office requesting documents and information regarding pricing of certain of generic products, including doxycycline hyclate, amitriptyline hydrochloride, doxazosin mesylate, methotrexate sodium and oxybutynin chloride. EPI is cooperating with this investigation. In May 2018, we and our subsidiary Par each received a CID from the U.S. Department of Justice in relation to a False Claims Act investigation concerning whether generic pharmaceutical manufacturers engaged in price fixing and market allocation agreements, paid illegal remuneration and caused the submission of false claims. We are cooperating with the investigation. Similar investigations may be brought by others or the foregoing matters may be expanded or result in litigation. We are unable to predict the outcome of these matters or to estimate the possible range of any losses that could be incurred. Certain cases alleging price-fixing and other anticompetitive conduct with respect to various generic pharmaceutical products have been consolidated and/or coordinated for pretrial proceedings in a federal MDL pending in the U.S. District Court for the Eastern District of Pennsylvania under the caption In re Generic Pharmaceuticals Pricing Antitrust Litigation (MDL No. 2724). Among the lawsuits consolidated and/or coordinated in the MDL, the earliest lawsuits naming the Company and/or its subsidiaries were filed in November 2016 and related to digoxin and doxycycline. The private plaintiffs in the MDL include alleged direct purchasers, end-payers, and indirect purchaser resellers, and they purport to represent not only themselves but also all others similarly situated. At the MDL court’s direction, in August 2017, each group of private plaintiffs (direct purchasers, end-payers and indirect purchaser resellers) filed separate consolidated amended class action complaints as to each of 18 products, except with respect to one product (propranolol) direct purchaser plaintiffs stated their intention to proceed on a consolidated amended complaint filed in the U.S. District Court for the Southern District of New York prior to MDL transfer (the Southern District of New York had denied a motion to dismiss this complaint). Each of these consolidated amended complaints relates to one product, and our subsidiary PPI was named as a defendant in complaints relating to six products: digoxin, doxycycline hyclate, divalproex ER, propranolol, baclofen and amitriptyline hydrochloride. The MDL court divided the various cases into three separate product-based tranches for certain administrative and scheduling purposes, including briefing on motions to dismiss. As to the six products in the first tranche (including digoxin, doxycycline hyclate and divalproex ER), defendants filed motions to dismiss in October 2017, and these motions remain pending. Defendants also asserted that they are entitled to move the MDL court to dismiss the propranolol direct purchaser consolidated amended complaint. The MDL court has allowed certain targeted discovery. In December 2016, the Attorney General for the State of Connecticut, leading a coalition of 20 state attorneys general, filed a complaint in the U.S. District Court for the District of Connecticut alleging price-fixing and other anticompetitive conduct with respect to doxycycline hyclate delayed release and glyburide against certain manufacturers of those products. The Company and its subsidiaries were not named in that complaint, or in an amended complaint filed on behalf of 40 states in March 2017, or in a separate lawsuit filed by four more states and the District of Columbia in the same court in July 2017. In August 2017, the state cases were transferred to MDL No. 2724. In October 2017, the state plaintiffs filed a motion for leave to (1) consolidate their two cases, (2) add Alaska and the Commonwealth of Puerto Rico as plaintiffs and (3) assert additional claims against existing and new defendants. In June 2018, the MDL court granted this motion, and the state plaintiffs filed their amended complaint. The amended complaint adds new allegations and claims against 14 new defendants, including our subsidiary Par, relating to 13 additional products. The amended complaint alleges anticompetitive conduct by our subsidiary with respect to doxycycline monohydrate. It also alleges that all defendants engaged in an overarching conspiracy to restrain trade across the generic pharmaceutical industry and seeks to hold all defendants, including our subsidiary, jointly and severally liable for harm caused by alleged anticompetitive activity concerning each of the 15 drugs at issue. The amended complaint seeks declaratory and injunctive relief, disgorgement and other equitable relief, compensatory and treble damages, civil penalties, costs and attorneys’ fees. In January 2018, The Kroger Co., Albertsons Companies, LLC, and H.E. Butt Grocery Company LP filed a complaint in the U.S. District Court for the Eastern District of Pennsylvania against PPI, as well as numerous other manufacturers of generic pharmaceuticals, alleging anticompetitive conduct relating to 30 separate generic pharmaceutical products, including seven products allegedly manufactured by PPI: digoxin, doxycycline hyclate, doxycycline monohydrate, divalproex ER, propranolol, baclofen and amitriptyline hydrochloride. This lawsuit has been assigned to the MDL court. The complaint alleges an overarching conspiracy among all named defendants to engage in price-fixing for all 30 products, as well as product-specific conspiracies relating to each individual product, in violation of federal antitrust law. The complaint seeks monetary damages, including treble damages, attorneys’ fees and injunctive relief. In June 2018, direct purchaser, end-payer and indirect purchaser reseller plaintiffs filed additional class action complaints in the U.S. District Court for the Eastern District of Pennsylvania, alleging anticompetitive conduct relating to approximately 15 generic pharmaceuticals (generally those that were the subject of the state plaintiffs’ amended complaint). These lawsuits have also been assigned to the MDL court. The end payer and indirect purchaser reseller complaints name our subsidiaries PPI, Generics Bidco I, LLC and DAVA Pharmaceuticals, LLC, and other companies, as defendants. The direct purchaser complaint names our subsidiary Par and other companies as defendants. As to our subsidiaries, the complaints allege anticompetitive conduct with respect to doxycycline hyclate, doxycycline monohydrate, nystatin cream and/or zoledronic acid. These complaints also seek to hold all defendants jointly and severally liable for alleged anticompetitive conduct relating to all products identified in the complaints on the basis of an “overarching conspiracy” theory similar to that asserted by the state plaintiffs. In August 2018, Humana Inc. filed a complaint in the U.S. District Court for the Eastern District of Pennsylvania against the Company, PPI and Par, as well as numerous other manufacturers of generic pharmaceuticals, alleging anticompetitive conduct relating to approximately 16 generic pharmaceutical products, including amitriptyline, baclofen, digoxin, divalproex, doxycycline (both doxycycline hyclate and doxycycline monohydrate) and propranolol. The complaint alleges an overarching conspiracy among all named defendants to engage in price-fixing for all 16 products, as well as product-specific conspiracies relating to each individual product. The complaint asserts claims under state and federal law and seeks monetary damages, including treble damages, attorneys’ fees and equitable relief. The lawsuit has been assigned to the MDL court. We will continue to vigorously defend the foregoing matters and to explore other options as appropriate in our best interests. Similar matters may be brought by others or the foregoing matters may be expanded. We are unable to predict the outcome of these matters or to estimate the possible range of any losses that could be incurred. Other Antitrust Matters Beginning in November 2013, multiple direct and indirect purchasers of LIDODERM® filed a number of cases against our subsidiary EPI and co-defendants Teikoku Seiyaku Co., Ltd. and Teikoku Pharma USA, Inc. (collectively, Teikoku), and Actavis plc and certain of its subsidiaries (collectively, Actavis, which was subsequently acquired by Teva Pharmaceuticals Industries Ltd and its subsidiaries from Allergan plc). Plaintiffs generally alleged that EPI, Teikoku and Actavis entered into an anticompetitive conspiracy to restrain trade through the settlement of patent infringement litigation concerning U.S. Patent No. 5,827,529 (the ‘529 patent) and other patents. Some complaints also alleged that Teikoku wrongfully listed the ‘529 patent in FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) as related to LIDODERM®, that EPI and Teikoku commenced sham patent litigation against Actavis and that EPI abused the FDA citizen petition process by filing a citizen petition and amendments solely to interfere with generic companies’ efforts to obtain FDA approval of their versions of LIDODERM®. The complaints asserted claims under Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1, 2), and/or various state antitrust and consumer protection statutes, as well as common law claims, and generally sought damages, treble damages, disgorgement of profits, restitution, injunctive relief and attorneys’ fees. The cases were consolidated and/or coordinated in April 2014 in a federal MDL in the U.S. District Court for the Northern District of California (MDL No. 2521). The MDL court certified classes of direct and indirect purchasers in February 2017. In June 2017, defendants moved for summary judgment on all claims, and plaintiffs also moved for partial summary judgment on certain elements of their claims. In November 2017, the court granted defendants’ motion in part, ruling in defendants’ favor on the issues of infringement and derivation and also limiting the time period at issue. Defendants’ motions for summary judgment were denied in all other respects. The court also granted plaintiffs’ motions for summary judgment on the issues of agreement and relevant market. EPI settled with certain opt-out plaintiffs in October 2017. EPI reached agreements in principle with the class plaintiffs in February 2018. In connection with the settlements, several indirect purchasers which previously had opted out were permitted to rejoin the class. The class settlement agreements provide that, subject to certain conditions, EPI will make aggregate payments of approximately $100 million, approximately $90 million of which are classified in the Current portion of the legal settlement accrual in the Condensed Consolidated Balance Sheets at June 30, 2018, with the remainder classified as Long-term legal settlement accrual, less current portion. The class settlement agreements have received preliminary approval but remain subject to final approval by the court. Beginning in June 2014, multiple direct and indirect purchasers of OPANA® ER filed cases against our subsidiaries EHSI and EPI and other pharmaceutical companies, including Impax Laboratories Inc. (Impax) and Penwest Pharmaceuticals Co., which our subsidiary EPI had acquired. Some cases were filed on behalf of putative classes of direct and indirect purchasers, while others were filed on behalf of individual retailers or health care benefit plans. All cases have been consolidated and/or coordinated for pretrial proceedings in a federal MDL pending in the U.S. District Court for the Northern District of Illinois (MDL No. 2580). Plaintiffs generally allege that an agreement reached by EPI and Impax to settle patent infringement litigation concerning multiple patents pertaining to OPANA® ER and EPI’s introduction of reformulated OPANA® ER violated antitrust laws. The complaints assert claims under Sections 1 and 2 of the Sherman Act, various state antitrust and consumer protection statutes and/or state common law. Plaintiffs generally seek damages, treble damages, disgorgement of profits, restitution, injunctive relief and attorneys’ fees. In February 2016, the MDL court issued orders (i) denying defendants’ motion to dismiss the claims of the direct purchasers, (ii) denying in part and granting in part defendants’ motion to dismiss the claims of the indirect purchasers, but giving them permission to file amended complaints and (iii) granting defendants’ motion to dismiss the complaints filed by certain retailers, but giving them permission to file amended complaints. In response to the MDL court’s orders, the indirect purchasers filed an amended complaint to which the defendants filed a renewed motion to dismiss certain claims, and certain retailers also filed amended complaints. The court has dismissed the indirect purchaser unjust enrichment claims arising under the laws of the states of California, Rhode Island and Illinois. The cases are currently in discovery. We will continue to vigorously defend these matters and to explore other options as appropriate in our best interests. Beginning in February 2009, the FTC and certain private plaintiffs, including distributors and retailers, filed suit against our subsidiary Par Pharmaceutical Companies, Inc. (since June 2016, Endo Generics Holdings, Inc., and referred to in this Commitments and Contingencies note as EGHI) and others alleging violations of antitrust law arising out of EGHI’s settlement of certain patent litigation concerning the generic version of AndroGel®. Generally, the complaints seek damages, treble damages, equitable relief, and attorneys’ fees and costs. The cases have been consolidated and/or coordinated for pretrial proceedings in a federal MDL pending in the U.S. District Court for the Northern District of Georgia (MDL No. 2084). In September 2012, the district court granted summary judgment to defendants on plaintiffs’ claims of sham litigation. In May 2016, plaintiffs representing a putative class of indirect purchasers voluntarily dismissed their claims with prejudice. In February 2017, the FTC voluntarily dismissed its claims against EGHI with prejudice. Claims by certain alleged direct purchasers or their assignees are still pending. In June 2018, the district court granted in part and denied in part various summary judgment and evidentiary motions filed by defendants. In particular, the district court’s order rejected two of direct purchasers’ three causation theories, rejected damages claims related to AndroGel® 1.62% and granted in part a motion seeking to exclude part of plaintiffs’ proposed manufacturing expert’s opinions. The motions were denied in all other respects. In July 2018, EGHI filed a motion for reconsideration of the order insofar as it denied summary judgment to EGHI, or in the alternative leave to file an interlocutory appeal; this motion remains pending. In July 2018, the district court denied certain plaintiffs’ motion for certification of a direct purchaser class. We will continue to vigorously defend these matters and to explore other options as appropriate in our best interests. Beginning in February 2018, several alleged indirect purchasers filed proposed class actions against our subsidiary PPI and others alleging a conspiracy to delay generic competition and monopolize the market for Zetia® (ezetimibe) and its generic equivalents. The complaints generally assert claims under Sections 1 and 2 of the Sherman Act, various state antitrust and consumer protection statutes and state common law and seek injunctive relief, damages, treble damages, attorneys’ fees and costs. In June 2018, the cases were consolidated and/or coordinated for pretrial proceedings in a federal MDL pending in the U.S. District Court for the Eastern District of Virginia (MDL No. 2836). We intend to vigorously defend these matters and to explore other options as appropriate in our best interests. Beginning in May 2018, multiple alleged direct and indirect purchasers filed proposed class actions in the U.S. District Court for the Southern District of New York against PPI, EPI and/or us, as well as others, alleging a conspiracy to delay generic competition and monopolize the market for Exforge® (amlodipine/valsartan) and its generic equivalents. The complaints generally assert claims under Sections 1 and 2 of the Sherman Act, various state antitrust and consumer protection statutes and state common law and seek damages, treble damages, equitable relief and attorneys’ fees and costs. We intend to vigorously defend these matters and to explore other options as appropriate in our best interests. In November 2014, EPI received a CID from Florida’s Office of the Attorney General seeking documents and other information concerning EPI’s agreement with Actavis settling the LIDODERM® patent litigation, as well as information concerning marketing and sales of LIDODERM®. EPI received similar CIDs from South Carolina’s Office of the Attorney General in February 2016 and from Alaska’s Office of the Attorney General in February 2015. The Alaska CID was also directed to EHSI and included requests for documents and information concerning agreements with Actavis and Impax settling the OPANA® ER patent litigation. We are cooperating with this investigation. In February 2015, EGHI and affiliates received a CID from the Office of the Attorney General for the State of Alaska seeking production of certain documents and information regarding EGHI’s settlement of the AndroGel® patent litigation as well as documents produced in the aforementioned litigation filed by the FTC. We are cooperating with this investigation. Similar matters may be brought by others or the foregoing matters may be expanded. We are unable to predict the outcome of these matters or to estimate the possible range of any additional losses that could be incurred. Securities Litigation In May 2016, a putative class action entitled Craig Friedman v. Endo International plc, Rajiv Kanishka Liyanaarchchie de Silva and Suketu P. Upadhyay was filed in the U.S. District Court for the Southern District of New York by an individual shareholder on behalf of himself and all similarly situated shareholders. In August 2016, the court appointed Steamfitters’ Industry Pension Fund and Steamfitters’ Industry Security Benefit Fund as lead plaintiffs in the action. In October 2016, plaintiffs filed a second amended complaint that, among other things, added Paul Campanelli as a defendant, and we filed a motion to dismiss. In response, and without resolving the motion, the court permitted lead plaintiffs to file a third amended complaint. The amended complaint alleged violations of Sections 10(b) and 20(a) of the Exchange Act based on the Company’s revision of its 2016 earnings guidance and certain disclosures about its generics business, the integration of Par Pharmaceutical Holdings, Inc. and its subsidiaries, certain other alleged business issues and the receipt of a CID from the U.S. Attorney’s Office for the Southern District of New York regarding contracts with pharmacy benefit managers concerning FROVA®. Lead plaintiffs sought class certification, damages in an unspecified amount and attorneys’ fees and costs. We filed a motion to dismiss the third amended complaint in December 2016. In January 2018, the court granted our motion and dismissed the case with prejudice. In February 2018, lead plaintiffs filed a motion for relief from the judgment and leave to file a fourth amended complaint; the court denied this motion in April 2018. Lead plaintiffs appealed to the U.S. Court of Appeals for the Second Circuit; that appeal is still pending. In February 2017, a putative class action entitled Public Employees’ Retirement System of Mississippi v. Endo International plc was filed in the Court of Common Pleas of Chester County, Pennsylvania by an institutional purchaser of shares in our June 2, 2015 public offering, on behalf of itself and all similarly situated purchasers. The lawsuit alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 against Endo, certain of its current and former directors and officers, and the underwriters who participated in the offering, based on certain disclosures about Endo’s generics business. In March 2017, defendants removed the case to the U.S. District Court for the Eastern District of Pennsylvania. In August 2017, the court remanded the case back to the Chester County Court of Common Pleas. In October 2017, plaintiff filed an amended complaint. In December 2017, defendants filed preliminary objections to the amended complaint. The court denied those preliminary objections in April 2018. The case is currently in discovery. Plaintiff filed its motion for class certification in July 2018. In April 2017, a putative class action entitled Phaedra A. Makris v. Endo International plc, Rajiv Kanishka Liyanaarchchie de Silva and Suketu P. Upadhyay was filed in the Superior Court of Justice in Ontario, Canada by an individual shareholder on behalf of herself and similarly-situated Canadian-based investors who purchased Endo’s securities between January 11 and May 5, 2016. The statement of claim generally seeks class certification, declaratory relief, damages, interest and costs based on alleged violations of the Ontario Securities Act. The statement of claim alleges negligent misrepresentations concerning the Company’s revenues, profit margins and earnings per share; its receipt of a subpoena from the State of Connecticut regarding doxycycline hyclate, amitriptyline hydrochloride, doxazosin mesylate, methotrexate sodium and oxybutynin chloride; and the erosion of the Company’s U.S. generic pharmaceuticals business. In August 2017, a putative class action entitled Bier v. Endo International plc, et al. was filed in the U.S. District Court for the Eastern District of Pennsylvania by an individual shareholder on behalf of himself and all similarly situated shareholders. The original complaint alleged violations of Section 10(b) and 20(a) of the Exchange Act against Endo and four current and former directors and officers, based on the Company’s decision to remove reformulated OPANA® ER from the market. In December 2017, SEB Investment Management AB was appointed lead plaintiff in the action. In February 2018, the lead plaintiff filed an amended complaint, which added claims alleging violations of Sections 11 and 15 of the Securities Act in connection with the June 2015 offering. The amended complaint named the Company, EHSI and twenty current and former directors, officers and employees of Endo as defendants. In April 2018, the defendants moved to dismiss the amended complaint; that motion remains pending. In November 2017, a putative class action entitled Pelletier v. Endo International plc, Rajiv Kanishka Liyanaarchchie De Silva, Suketu P. Upadhyay, and Paul V. Campanelli was filed in the U.S. District Court for the Eastern District of Pennsylvania by an individual shareholder on behalf of himself and all similarly situated shareholders. The lawsuit alleges violations of Section 10(b) and 20(a) of the Exchange Act relating to the pricing of various generic pharmaceutical products. In January 2018, the Chief Judge of the Eastern District of Pennsylvania designated Pelletier as related to Bier and reassigned Pelletier to the judge overseeing Bier. In June 2018, the Park Employees’ Annuity and Benefit Fund of Chicago was appointed lead plaintiff in the action. In August 2018, the lead plaintiff filed an amended complaint. We will continue to vigorously defend the foregoing matters and to explore other options as appropriate in our best interests. Similar matters may be brought by others or the foregoing matters may be expanded. We are unable to predict the outcome of these matters or to estimate the possible range of any losses that could be incurred. VASOSTRICT® Related Matters In July 2016, Fresenius Kabi USA, LLC (Fresenius) filed a complaint against Par and its affiliate Par Sterile Products, LLC (PSP) in the U.S. District Court for the District of New Jersey alleging that Par and its affiliate engaged in an anticompetitive scheme to exclude competition from the market for vasopressin solution for intravenous injection in view of Par’s VASOSTRICT® (vasopressin) product. The complaint alleges violations of Sections 1 and 2 of the Sherman Antitrust Act, as well as state antitrust and common law, based on assertions that Par and its affiliate entered into exclusive supply agreements with one or more active pharmaceutical ingredient (API) manufacturers and that, as a result, Fresenius has been unable to obtain vasopressin API in order to file an ANDA to obtain FDA approval for its own vasopressin product. Fresenius seeks actual, treble and punitive damages, attorneys’ fees and costs, and injunctive relief. In September 2016, Par and its affiliate filed a motion to dismiss, which the district court denied in February 2017. The case is currently in discovery. In August 2017, our subsidiaries PPI and PSP filed a complaint for actual, exemplary and punitive damages, injunctive relief and other relief against QuVa Pharma, Inc. (QuVa), Stuart Hinchen, Peter Jenkins, and Mike Rutkowski in the U.S. District Court for the District of New Jersey. The complaint alleges misappropriation in violation of the federal Defend Trade Secrets Act, New Jersey’s Trade Secrets Act and New Jersey common law, as well as unfair competition, breach of contract, breach of fiduciary duty, breach of the duty of loyalty, tortious interference with contractual relations and breach of the duty of confidence in connection with VASOSTRICT®, a vasopressin-based cardiopulmonary drug. In October 2017, defendants answered the complaint and QuVa asserted counterclaims against PPI and PSP alleging unfair competition under New Jersey common law and seeking declaratory judgment of non-infringement as to five U.S. Patents assigned to PPI that are listed in FDA’s Orange Book for VASOSTRICT®. The counterclaims seek actual, exemplary, and punitive damages, injunctive relief and other relief. We filed a motion to dismiss the unfair competition counterclaim in November 2017. Also in November 2017, we filed a motion for preliminary injunction seeking various forms of relief. These motions are still pending. In January 2018, we filed a first amended complaint adding five former employees of PSP as defendants and numerous causes of action against some or all of those former employees, including misappropriation under the federal Defend Trade Secrets Act, New Jersey’s Trade Secrets Act and New Jersey common law, as well as breach of contract, breach of the duty of loyalty and breach of the duty of confidence. In March 2018, the court granted in part our motion for preliminary injunction and enjoined QuVa from marketing and releasing its planned vasopressin product through the conclusion of trial. Also in March 2018, QuVa and seven of the individual defendants filed a motion to dismiss the New Jersey common law claims, four of the individual defendants filed a motion to dismiss for lack of personal jurisdiction and one of the individuals filed a motion to dismiss the breach of contract claim. In April 2018, another individual defendant filed a motion to dismiss asserting numerous arguments, including lack of personal jurisdiction, improper venue and choice of law. These motions are still pending. Full discovery began in May 2018, but the court has not yet set a trial date. Also in May 2018, defendants filed a notice of appeal to the Third Circuit Court of Appeal indicating intent to appeal the court’s preliminary injunction. In October 2017, Endo Par Innovation Company, LLC (EPIC) and PSP filed a complaint in the United States District Court for the District of Columbia challenging the legality of the FDA’s Interim Policy on Compounding Using Bulk Drug Substances Under Section 503B of the Federal Food, Drug, and Cosmetic Act (January 2017) with respect to the listing of vasopressin in Category 1 of the Interim Policy. The complaint contends that the Interim Policy is unlawful because it is inconsistent with the Federal, Food, Drug, and Cosmetic Act, including, but not limited to, Section 503B of that Act. The complaint seeks (i) a declaration that FDA’s Interim Policy and its listing of vasopressin in Category 1 of the Interim Policy are unlawful, and (ii) an order enjoining and vacating the Interim Policy and FDA’s listing of vasopressin in Category 1 of the Interim Policy. In January 2018, EPIC and PSP agreed to a temporary 60-day stay of the litigation in light of the FDA’s announcement that forthcoming guidance will address the concerns set forth in the Company’s complaint. In March 2018, the FDA released new draft guidance for industry entitled “Evaluation of Bulk Drug Substances Nominated for Use in Compounding Under Section 503B of the Federal Food, Drug, and Cosmetic Act.” Shortly thereafter, the parties agreed to extend the temporary stay for an additional 180 days. In April 2018, PSP and PPI received a notice letter from Eagle Pharmaceuticals, Inc. (Eagle) advising of the filing by such company of an ANDA for a generic version of VASOSTRICT® (vasopressin IV solution (infusion)). In May 2018, PSP and PPI received a second notice letter from Eagle advising of the same filing, but adding an additional patent. The Paragraph IV Notices refer to U.S. Patent Nos. 9,375,478; 9,687,526; 9,744,209; 9744, 239; 9,750,785; and 9,937,223, which variously cover either vasopressin-containing pharmaceutical compositions or methods of using a vasopressin-containing usage dosage form to increase blood pressure in humans. In May 2018, PPI, PSP and EPIC filed a lawsuit against Eagle in the United States District Court for the District of Delaware within the 45-day deadline to invoke a 30-month stay of FDA approval pursuant to the Hatch-Waxman legislative scheme. In August 2018, Eagle filed an answer and a counterclaim for non-infringement and invalidity of asserted patents. The Company’s legal reserves include, among other things, an estimated accrual for certain VASOSTRICT®-related matters. We will continue to vigorously defend or prosecute the foregoing matters as appropriate, to protect our intellectual property rights, to pursue all available legal and regulatory avenues and to explore other options as appropriate in our best interests. Similar matters may be brought by others or the foregoing matters may be expanded. We are unable to predict the outcome of these matters or to estimate the possible range of any additional accruals that could be required. Paragraph IV Certifications on OPANA® ER In late 2012, two patents (U.S. Patent Nos. 8,309,122 and 8,329,216) were issued to EPI covering OPANA® ER (oxymorphone hydrochloride extended-release tablets CII). In December 2012, EPI filed a complaint against Actavis in U.S. District Court for the Southern District of New York for patent infringement based on its ANDA for a non-INTAC® technology version of OPANA® ER. In May 2013 and June 2013, EPI filed similar suits in the U.S. District Court for the Southern District of New York against the following applicants for non-INTAC® technology OPANA® ER: Roxane Laboratories, Inc. (Roxane) and Ranbaxy Laboratories Limited, which was acquired by Sun Pharmaceutical Industries Ltd. (Ranbaxy). Those suits allege infringement of U.S. Patent Nos. 7,851,482, 8,309,122 and 8,329,216. In July 2013, Actavis and Roxane were granted FDA approval to market all strengths of their respective non-INTAC® technology formulations of OPANA® ER. In September 2013, Actavis launched its generic version of non-crush-resistant OPANA® ER 5, 10, 20, 30 and 40 mg tablets. A trial in this case was held from March 2015 through April 2015 in the U.S. District Court for the Southern District of New York. In August 2015, the District Court ruled that all defendants infringed the claims of U.S. Patent Nos. 8,309,122 and 8,329,216. The District Court also ruled that the defendants failed to show that U.S. Patent Nos. 8,309,122 and 8,329,216 were invalid, enjoined the defendants from launching their generic products until the expiration of those patents and directed Actavis to withdraw its generic product within 60 days. In October 2015, the District Court tolled the 60-day period until it decided two pending post-trial motions. In April 2016, the District Court issued an order upholding its August 2015 ruling in EPI’s favor and confirming the prior injunction against the manufacture or sale of the generic version of the non-INTAC® technology OPANA® ER currently offered by Actavis and the additional approved but not yet marketed generic version of the product developed by Roxane. The defendants filed appeals to the Court of Appeals for the Federal Circuit. EPI continued its suit for damages for Actavis’s sales of its infringing generic version of OPANA® ER. In August 2017, EPI settled the damages portion of this suit with Actavis. As a result of that settlement, EPI received $25 million from Actavis in August 2017. We intend to continue vigorously asserting our intellectual property rights and to oppose any such appeal. On May 16, 2018, the Court of Appeals for the Federal Circuit issued an opinion in EPI’s favor on all issues. This case is now closed. From September 21, 2012 through October 30, 2013, EPI and its partner Grünenthal received Paragraph IV Notices from each of Teva Pharmaceuticals USA, Inc., Amneal Pharmaceuticals, LLC (Amneal), ThoRx Laboratories, Inc. (ThoRx), Actavis, Impax and Ranbaxy (now Sun Pharmaceutical Industries Ltd.), advising of the filing by each such company of an ANDA for a generic version of the formulation of OPANA® ER with INTAC® technology. These Paragraph IV Notices refer to U.S. Patent Nos. 7,851,482, 8,075,872, 8,114,383, 8,192,722, 8,309,060, 8,309,122 and 8,329,216, which variously cover the formulation of OPANA® ER, a highly pure version of the active pharmaceutical ingredient and the release profile of OPANA® ER. EPI filed lawsuits against each of these filers in the U.S. District Court for the Southern District of New York. Each lawsuit was filed within the 45-day deadline to invoke a 30-month stay of FDA approval pursuant to the Hatch-Waxman legislative scheme. A trial in this case was held from March 2015 through April 2015 in the U.S. District Court for the Southern District of New York against the remaining filers. In August 2015, the District Court issued an Opinion holding that all defendants infringed the claims of U.S. Patent Nos. 8,309,060, 8,309,122 and 8,329,216. The Opinion also held that the defendants had shown that U.S. Patent No. 8,309,060 was invalid, but that the defendants had failed to show that U.S. Patent Nos. 8,309,122 and 8,329,216 were invalid. The District Court also issued an Order enjoining the defendants from launching their generic products until the expiration of U.S. Patent Nos. 8,309,122 and 8,329,216. The defendants filed appeals to the Court of Appeals for the Federal Circuit. An argument was held at the Federal Circuit on this appeal in December 2017. On May 16, 2018, the Court of Appeals for the Federal Circuit issued an opinion in EPI’s favor on all issues. This case is now closed. In August 2014 and October 2014, the U.S. Patent Office issued U.S. Patent Nos. 8,808,737 and 8,871,779 respectively, which cover a method of using OPANA® ER and a highly pure version of the active pharmaceutical ingredient of OPANA® ER. In November 2014, EPI filed lawsuits against Teva, ThoRx, Actavis, Impax, Ranbaxy, Roxane, Amneal and Sandoz Inc. based on their ANDAs filed against both the INTAC® technology and non-INTAC® technology versions of OPANA® ER. Those lawsuits were filed in the U.S. District Court for the District of Delaware alleging infringement of these new patents, which expire in 2027 and 2029, respectively. On November 17, 2015, the District Court held the ‘737 patent invalid for claiming unpatentable subject matter. That patent has been dismissed from all suits and the suits administratively closed as to that patent, subject to appeal at the end of the case on the ‘779 patent. In July 2016, a three-day trial was held in the U.S. District Court for the District of Delaware against Teva and Amneal for infringement of the ‘779 patent. In October 2016, the District Court issued an Opinion holding that the defendants infringed the claims of U.S. Patent No. 8,871,779. The Opinion also held that the defendants had failed to show that U.S. Patent No. 8,871,779 was invalid. The District Court issued an Order enjoining the defendants from launching their generic products until the expiration of U.S. Patent No. 8,871,779 in November 2029. A trial for infringement of the ‘799 patent by Actavis was held in February 2017 in the same court (U.S. District Court for the District of Delaware) in front of the same judge. In August 2017, the District Court issued an Opinion holding that Actavis infringed the claims of U.S. Patent No. 8,871,779, and that Actavis had failed to show that U.S. Patent No. 8,871,779 was invalid. Teva, Amneal and Actavis have appealed these holdings. We have appealed the holding that the ‘737 patent is invalid. We are awaiting a hearing date for that appeal. We will continue to vigorously defend or prosecute the foregoing matter as appropriate, to protect our intellectual property rights, to pursue all available legal and regulatory avenues and to explore other options as appropriate in our best interests in defense of our intellectual property, including enforcement of the product’s intellectual property rights and approved labeling. We are unable to predict the outcome of these matters or to estimate the possible range of any losses that could be incurred. Other Proceedings and Investigations Proceedings similar to those described above may also be brought in the future. Additionally, we are involved in, or have been involved in, arbitrations or various other proceedings that arise from the normal course of our business. We cannot predict the timing or outcome of these other proceedings. Currently, neither we nor our subsidiaries are involved in any other proceedings that we expect to have a material effect on our business, financial condition, results of operations and cash flows. |
Other Comprehensive (Loss) Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE (LOSS) INCOME | NOTE 15. OTHER COMPREHENSIVE (LOSS) INCOME Set forth below are the tax effects allocated to each component of Other comprehensive (loss) income for the three and six months ended June 30, 2018 and 2017 (in thousands):
Substantially all of the Company’s Accumulated other comprehensive loss at June 30, 2018 and December 31, 2017 consists of Foreign currency translation loss. |
Shareholders' (Deficit) Equity Shareholders' (Deficit) Equity |
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Shareholders' (Deficit) Equity | NOTE 16. SHAREHOLDERS' (DEFICIT) EQUITY Changes in Shareholders' (Deficit) Equity The following table displays a reconciliation of our beginning and ending balances in shareholders' (deficit) equity for the six months ended June 30, 2018 (in thousands):
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Share-Based Compensation During the second quarter of 2018, the Company’s shareholders approved an amendment to the Endo International plc Amended and Restated 2015 Stock Incentive Plan (the Plan). The Plan was amended and restated to increase the number of the Company’s ordinary shares that may be issued with respect to awards under the Plan by 5.0 million ordinary shares and to make certain other changes to the Plan’s terms. None of the additional ordinary shares were issued during the six months ended June 30, 2018. The Company recognized share-based compensation expense of $12.1 million and $7.5 million during the three months ended June 30, 2018 and 2017, respectively, and $30.0 million and $27.0 million during the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, the total remaining unrecognized compensation cost related to non-vested share-based compensation awards amounted to $54.8 million. During the third quarter of 2017, the Company issued approximately 1.0 million stock options and 0.1 million restricted stock units that were initially subject to shareholder approval and were subsequently approved by shareholders on June 7, 2018 at the Company’s Annual General Meeting of Shareholders. The options have an exercise price equal to the closing share price on their issuance date in August 2017. There are 0.5 million performance share units outstanding as of June 30, 2018, representing target amounts, for which a grant date has not been established. No fair value has been ascribed to these awards as no grant date has been established. Accordingly, they are not reflected in the remaining unrecognized compensation cost above or the weighted average remaining requisite service period below. As of June 30, 2018, the weighted average remaining requisite service period for non-vested stock options was 2.1 years and for non-vested restricted stock units was 2.2 years. |
Other Income, Net |
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OTHER INCOME, NET | NOTE 17. OTHER INCOME, NET The components of Other income, net for the three and six months ended June 30, 2018 and 2017 are as follows (in thousands):
(Gain) loss on sale of business and other assets primarily relates to proceeds received from the sale of various ANDAs during the three and six months ended June 30, 2018. Foreign currency gain, net results from the remeasurement of the Company’s foreign currency denominated assets and liabilities. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | NOTE 18. INCOME TAXES The following table displays our Loss from continuing operations before income tax, Income tax expense (benefit) and Effective tax rate for the three and six months ended June 30, 2018 and 2017 (dollars in thousands):
The income tax expense for the three months ended June 30, 2018 primarily related to the geographic mix of pre-tax earnings. As of June 30, 2018, we had valuation allowances established against our deferred tax assets in most jurisdictions in which we operate, with the exception of Canada and India. The income tax benefit for the comparable 2017 period primarily related to the geographic mix of pre-tax earnings and the net discrete tax benefits associated with goodwill and intangible asset impairments. The income tax expense for the six months ended June 30, 2018 is primarily related to the geographic mix of pre-tax earnings and discrete tax expense incurred in connection with an intercompany asset restructuring. The income tax benefit for the comparable 2017 period related primarily to the geographic mix of pre-tax earnings and the discrete tax benefits associated with goodwill and intangible asset impairments. During the year ended December 31, 2017, we recorded a benefit of $36.2 million as our estimate of the impact of the TCJA. This benefit, which is primarily related to the remeasurement of deferred tax liabilities related to tax deductible goodwill, was recorded in our Consolidated Statements of Operations as Income tax benefit during the three months ended December 31, 2017. We recorded the aforementioned net benefit based on currently available information and interpretations of the TCJA. In accordance with authoritative guidance issued by the SEC, the income tax effect for certain aspects of the TCJA may represent provisional amounts for which our accounting is incomplete but a reasonable estimate could be determined. We consider amounts related to the various transition rules and interpretations of the TCJA to be provisional. Accordingly, we will continue to evaluate the impacts of the TCJA, including administrative and regulatory guidance as it becomes available. The measurement and existence of current and non-current income tax payables and/or the remeasurement of deferred tax assets and liabilities may change upon finalization of our analysis, which is expected to occur no later than one year from December 22, 2017, the date of the TCJA’s enactment. Any adjustment to a provisional amount identified during the one-year measurement period will be recorded as an income tax expense or benefit in the period the adjustment is determined. During the six months ended June 30, 2018, we did not record any adjustments to the provisional amounts recognized in 2017. We will continue to monitor for any significant impact on the Company’s consolidated financial statements with respect to the TCJA as more refined information and further guidance become available. |
Net Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE | NOTE 19. NET LOSS PER SHARE The following is a reconciliation of the numerator and denominator of basic and diluted net loss per share for the three and six months ended June 30, 2018 and 2017 (in thousands):
Basic net loss per share data is computed based on the weighted average number of ordinary shares outstanding during the period. Diluted loss per share data is computed based on the weighted average number of ordinary shares outstanding and, if there is net income from continuing operations attributable to Endo ordinary shareholders during the period, the dilutive impact of ordinary share equivalents outstanding during the period. Stock options and awards that have been issued but for which a grant date has not yet been established, such as the performance share units discussed in Note 16. Shareholders' (Deficit) Equity, are not considered in the calculation of basic of diluted weighted average shares. All potentially dilutive items were excluded from the diluted share calculation for the three and six months ended June 30, 2018 and 2017 because their effect would have been anti-dilutive, as the Company was in a loss position. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||
Revenue Recognition | Revenue Recognition. The Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606) on January 1, 2018 using the modified retrospective method for all revenue-generating contracts, including modifications thereto, that were not completed contracts at the date of adoption. For further discussion of the impact of adoption, refer to the “Recent Accounting Pronouncements Adopted or Otherwise Effective as of June 30, 2018” section below. ASC 606 applies to contracts with commercial substance that establish the payment terms and each party’s rights regarding the goods or services to be transferred, to the extent collection of substantially all of the related consideration is probable. Under ASC 606, we recognize revenue for contracts meeting these criteria when (or as) we satisfy our performance obligations for such contracts by transferring control of the underlying promised goods or services to our customers. The amount of revenue we recognize reflects our estimate of the consideration we expect to be entitled to receive, subject to certain constraints, in exchange for such goods or services. This amount is referred to as the transaction price. Our revenue consists almost entirely of sales of our pharmaceutical products to customers, whereby we ship product to a customer pursuant to a purchase order and invoice the customer upon shipment. For contracts such as these, revenue is recognized when our contractual performance obligations have been fulfilled and control has been transferred to the customer pursuant to the contract’s terms, which is generally upon delivery to the customer. The amount of revenue we recognize is equal to the fixed amount of the transaction price, adjusted for our estimates of a number of significant variable components including, but not limited to, estimates for chargebacks, rebates, sales incentives and allowances, distribution service agreement (DSA) and other fees for services, returns and allowances. The Company utilizes the expected value method when estimating the amount of variable consideration to include in the transaction price with respect to each of the foregoing variable components and the most likely amount method when estimating the amount of variable consideration to include in the transaction price with respect to future potential milestone payments that do not qualify for the sales- and usage-based royalty exception. Variable consideration is included in the transaction price only to the extent that it is probable that a significant revenue reversal will not occur when the uncertainty associated with the variable consideration is resolved. Payment terms for these types of contracts generally fall within 30 to 90 days of invoicing. Our most significant components of variable consideration are further described below. Our estimates for these components are based on factors such as historical experience, estimated future trends, estimated customer inventory levels, current contract sales terms with our direct and indirect customers and other competitive factors. Contract Assets and Contract Liabilities. Contract assets represent the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer when that right is conditioned on something other than the passage of time including, for example, the entity’s future performance. The Company records revenue and a corresponding contract asset when it fulfills a contractual performance obligation, but must also fulfill one or more additional performance obligations before being entitled to payment. Once the Company’s right to consideration becomes unconditional, the contract asset amount is reclassified as Accounts receivable. Contract liabilities represent the Company’s obligation to transfer goods or services to a customer. The Company records a contract liability generally upon receipt of consideration in advance of fulfilling one or more of its contractual performance obligations. Upon completing the corresponding performance obligation, the contract liability amount is reversed and revenue is recognized. Contract assets and liabilities related to rights and obligations arising from a single contract, or a series of contracts combined and accounted for as a single contract, are generally presented on a net basis. Contract assets and liabilities are further described in Note 11. Contract Assets and Liabilities. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted as of June 30, 2018 In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, “Leases (Topic 842)” (ASU 2016-02) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, lessees are required to recognize a lease liability, which represents the discounted obligation to make future minimum lease payments, and a corresponding right-of-use asset on the balance sheet for most leases. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases” (ASU 2018-10), which provides narrow amendments to clarify how to apply certain aspects of the new lease standard, and ASU No. 2018-11, “Leases (Topic 842) - Targeted Improvements” (ASU 2018-11), which addresses implementation issues related to the new lease standard. This guidance will be effective for the Company beginning in the first quarter of 2019, with early application permitted, and the Company plans to adopt this guidance in the first quarter of 2019. The Company is continuing to evaluate the impact that this new guidance will have on its consolidated financial statements, including its disclosures and the method of adoption. It is expected that the primary impact upon adoption will be the recognition, on a discounted basis, of the Company’s minimum commitments under noncancelable operating leases as right of use assets and obligations on the consolidated balance sheets. This will result in a significant increase in assets and liabilities on the Company’s consolidated balance sheets. In preparation for the adoption of this guidance, the Company is continuing the process of identifying and validating the Company’s lease information and evaluating the impact that this new guidance will have on its processes and controls. In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (ASU 2018-02). ASU 2018-02 allows for a reclassification from accumulated other comprehensive income or loss to retained earnings or accumulated deficit for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (TCJA). ASU 2018-02 also requires certain related disclosures. ASU 2018-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2018-02 on the Company’s consolidated results of operations and financial position. In July 2018, the FASB issued ASU No. 2018-09, “Codification Improvements” (ASU 2018-09). ASU 2018-09 makes changes to a variety of topics to clarify, correct errors in or make minor improvements to the Accounting Standards Codification. Certain of these provisions are effective immediately; however, these provisions did not have a material impact on the Company’s financial statements or disclosures. The remaining provisions are generally effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2018. The Company is currently evaluating the impact of these remaining provisions of ASU 2018-09 on the Company’s consolidated results of operations and financial position. Recent Accounting Pronouncements Adopted or Otherwise Effective as of June 30, 2018 In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09), which was subsequently amended and supplemented by several additional ASUs including:
These ASUs have generally been codified in Accounting Standards Codification Topic 606 “Revenue from Contracts with Customers”, and are collectively referred to herein as ASC 606. ASC 606 supersedes the revenue recognition requirements in Topic 605 “Revenue Recognition” (ASC 605), and requires entities to recognize revenue when control of promised goods or services is transferred to customers at an amount that reflects the consideration to which entities expect to be entitled in exchange for those goods or services. The Company adopted ASC 606 on January 1, 2018 using the modified retrospective method for all revenue-generating contracts, including modifications thereto, that were not completed contracts at the date of adoption. Under the modified retrospective method, results beginning on January 1, 2018 are presented under ASC 606, while the comparative prior period results continue to be presented under ASC 605 based on the accounting standards originally in effect for such periods. As a result of adopting ASC 606, the Company recorded a net decrease of $3.1 million to its accumulated deficit at January 1, 2018, representing the cumulative impact of adopting ASC 606. In May 2017, the FASB issued ASU No. 2017-09 “Compensation - Stock Compensation” (ASU 2017-09). ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. It is intended to reduce both (1) diversity in practice and (2) cost and complexity when accounting for changes to the terms or conditions of share-based payment awards. ASU 2017-09 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company adopted the new standard on January 1, 2018 and the amendments in this update will be applied prospectively to any award modified on or after the adoption date. |
Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of new accounting pronouncements | The table below presents the effects of ASU 2016-18 on the Company’s Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2017 (in thousands):
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The current period impact of adoption on our Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets is as follows (in thousands):
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of new accounting pronouncements | The table below presents the effects of ASU 2016-18 on the Company’s Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2017 (in thousands):
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The current period impact of adoption on our Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets is as follows (in thousands):
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Discontinued Operations and Divestitures (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disposal groups, including discontinued operations, income statement, balance sheet and additional disclosures | The following table provides the operating results of Astora Discontinued operations, net of tax for the three and six months ended June 30, 2018 and 2017 (in thousands):
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Restructuring (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restructuring reserve by type of cost | Changes to this liability during the six months ended June 30, 2018 were as follows (in thousands):
Changes to this liability during the six months ended June 30, 2018 were as follows (in thousands):
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Segment Results (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reportable segments information | The following represents selected information for the Company’s reportable segments for the three and six months ended June 30, 2018 and 2017 (in thousands):
__________
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Schedule of reconciliations of consolidated loss from continuing operations before income tax | The table below provides reconciliations of our consolidated Loss from continuing operations before income tax, which is determined in accordance with U.S. generally accepted accounting principles (U.S. GAAP), to our total segment adjusted income from continuing operations before income tax for the three and six months ended June 30, 2018 and 2017 (in thousands):
__________
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Disaggregation of Revenue | The Company disaggregates its revenue from contracts with customers into the categories included in the table below (in thousands). The Company believes these categories depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors.
__________
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial assets and liabilities measured at fair value on recurring basis | The Company’s financial assets and liabilities measured at fair value on a recurring basis at June 30, 2018 and December 31, 2017 were as follows (in thousands):
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Changes to liability for acquisition-related contingent consideration | The following table presents changes to the Company’s liability for acquisition-related contingent consideration, which was measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2018 and 2017 (in thousands):
The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the six months ended June 30, 2018 by acquisition (in thousands):
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Summary of nonrecurring fair value measurements | The Company’s financial assets and liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2018 were as follows (in thousands):
__________
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventory | Inventories consist of the following at June 30, 2018 and December 31, 2017 (in thousands):
__________ (1) The components of inventory shown in the table above are net of allowance for obsolescence. |
Goodwill And Other Intangibles (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the carrying amount of goodwill | Changes in the carrying amount of our goodwill for the six months ended June 30, 2018 were as follows (in thousands):
__________
The carrying amounts of goodwill at June 30, 2018 and December 31, 2017 are net of the following accumulated impairments (in thousands):
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Schedule of other intangible assets | Changes in the amount of other intangible assets for the six months ended June 30, 2018 are set forth in the table below (in thousands).
__________
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Schedule of future amortization expense | Estimated amortization of intangibles for the five fiscal years subsequent to December 31, 2017 is as follows (in thousands):
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Schedule of intangible asset impairment charges including goodwill | During the three and six months ended June 30, 2018 and 2017, the Company incurred the following goodwill and other intangible asset impairment charges:
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Contract Assets and Liabilities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract with Customer, Asset and Liability [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Assets and Liabilities | The following table shows the opening and closing balances of contract assets and contract liabilities from contracts with customers (dollars in thousands):
__________
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Accounts Payable And Accrued Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses include the following at June 30, 2018 and December 31, 2017 (in thousands):
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt instruments | The following table presents information about the Company’s total indebtedness at June 30, 2018 and December 31, 2017 (in thousands):
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Commitments And Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Qualified Settlement Funds accounts and product liability balance | The following table presents the changes in the QSFs and mesh liability accrual balance during the six months ended June 30, 2018 (in thousands):
__________
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Other Comprehensive (Loss) Income (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of tax effects allocated to each component of other comprehensive income | Set forth below are the tax effects allocated to each component of Other comprehensive (loss) income for the three and six months ended June 30, 2018 and 2017 (in thousands):
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Shareholders' (Deficit) Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in stockholders' equity | The following table displays a reconciliation of our beginning and ending balances in shareholders' (deficit) equity for the six months ended June 30, 2018 (in thousands):
__________
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Other Income, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Component of Operating Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of other income, net | The components of Other income, net for the three and six months ended June 30, 2018 and 2017 are as follows (in thousands):
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Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Tax | The following table displays our Loss from continuing operations before income tax, Income tax expense (benefit) and Effective tax rate for the three and six months ended June 30, 2018 and 2017 (dollars in thousands):
|
Net Loss Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the numerator and denominator of basic and diluted net loss per share | The following is a reconciliation of the numerator and denominator of basic and diluted net loss per share for the three and six months ended June 30, 2018 and 2017 (in thousands):
|
Discontinued Operations and Divestitures - Lithia (Narrative) (Details) - USD ($) |
1 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jul. 03, 2017 |
Dec. 31, 2017 |
Oct. 31, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from sale of business, net | $ 37,971,000 | $ 18,531,000 | |||
Litha Healthcare Group Limited | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from sale of business, net | $ 94,200,000 | ||||
Consideration receivable | $ 4,400,000 | ||||
Gain on sale of business | $ 0 | $ 10,100,000 |
Discontinued Operations and Divestitures - Somar (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Oct. 25, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
(Gain) loss on sale of business and other assets | $ (24,577) | $ 26 | $ (26,993) | $ (2,311) | |
Somar | Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Aggregate purchase price | $ 124,000 | ||||
(Gain) loss on sale of business and other assets | $ 1,300 |
Acquisitions (Other Acquisition) (Narrative) (Details) - Forecast - Somerset $ in Millions |
6 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Business Acquisition [Line Items] | |
Percentage of voting interests acquired | 100.00% |
Aggregate consideration transferred | $ 160 |
Debt to be assumed | $ 30 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 117,199 | $ 124,685 |
Work-in-process | 91,857 | 109,897 |
Finished goods | 134,262 | 156,855 |
Total | 343,318 | 391,437 |
Long-term inventory | 11,300 | 17,100 |
Inventories not yet available for sale | $ 8,600 | $ 5,900 |
Goodwill And Other Intangibles - Accumulated Impairment (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Goodwill [Line Items] | ||
Accumulated impairment losses | $ 4,033,067 | $ 3,661,904 |
U.S. Branded - Specialty & Established Pharmaceuticals | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | 855,810 | 855,810 |
U.S. Branded - Sterile Injectables | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | 0 | 0 |
U.S. Generic Pharmaceuticals | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | 2,733,549 | 2,342,549 |
International Pharmaceuticals | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | $ 443,708 | 463,545 |
Former U.S. Generic Pharmaceuticals | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | $ 2,342,500 |
Goodwill And Other Intangibles - Other Intangibles (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 153,200 | $ 190,900 | $ 310,387 | $ 454,100 |
Goodwill And Other Intangibles - Schedule Of Estimated Amortization Of Intangibles (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2018 | $ 623,324 |
2019 | 551,471 |
2020 | 491,046 |
2021 | 458,821 |
2022 | $ 438,071 |
Goodwill And Other Intangibles - Schedule of Intangible Asset Impairment Charges Including Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill impairment charges | $ 0 | $ 206,143 | $ 391,000 | $ 288,745 |
Impairment of intangible assets | $ 22,767 | $ 476,971 | $ 76,967 | $ 595,877 |
License And Collaboration Agreements (Narrative) (Details) |
3 Months Ended |
---|---|
Jun. 30, 2018
product_candidates
| |
License And Collaboration Agreements [Abstract] | |
Number of sterile injectable product candidates | 5 |
Contract Assets and Liabilities (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jan. 01, 2018 |
|
Contract with Customer, Asset and Liability [Abstract] | ||
Contract assets, net | $ 15,257 | $ 11,287 |
Contract assets, net - $ change | $ 3,970 | |
Contract assets, net - % change | 35.00% | |
Contract liabilities, net | $ 20,054 | 20,954 |
Contract liabilities, net - $ change | $ (900) | |
Contract liabilities, net - % change | (4.00%) | |
Contract asset amounts classified as current | $ 10,300 | 8,200 |
Contract liability amounts classified as current | 1,700 | $ 1,900 |
Revenue recognized | (900) | |
Reduction in revenue relating to performance obligation satisfied in prior periods | $ 500 |
Accounts Payable And Accrued Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Trade accounts payable | $ 95,195 | $ 85,348 |
Returns and allowances | 276,677 | 291,034 |
Rebates | 142,813 | 168,333 |
Chargebacks | 5,513 | 14,604 |
Accrued interest | 130,242 | 130,257 |
Accrued payroll and related benefits | 84,317 | 113,908 |
Accrued royalties and other distribution partner payables | 52,515 | 63,114 |
Acquisition-related contingent consideration—short-term | 52,922 | 70,543 |
Other | 187,163 | 159,684 |
Total | $ 1,027,357 | $ 1,096,825 |
Debt (Credit Facility) (Narrative) (Details) $ in Millions |
Jun. 30, 2018
USD ($)
|
---|---|
Revolving Credit Facility | |
Line of Credit Facility [Line Items] | |
Credit facility, remaining borrowing capacity | $ 996.8 |
Commitments And Contingencies - Schedule of Loss Contingencies (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Qualified Settlement Funds | ||
Cash contributions to Qualified Settlement Funds | $ 126,400 | $ 522,770 |
Mesh Liability Accrual | ||
Ending balance | 1,160,500 | |
Vaginal Mesh Cases | ||
Qualified Settlement Funds | ||
Beginning balance | 313,814 | |
Cash contributions to Qualified Settlement Funds | 126,400 | |
Cash distributions to settle disputes from Qualified Settlement Funds | (148,824) | |
Other (1) | 1,156 | |
Ending balance | 292,546 | |
Mesh Liability Accrual | ||
Additional charges | 0 | |
Cash distributions to settle disputes | 0 | |
Vaginal Mesh Cases | Mesh Product Liability Accrual | ||
Qualified Settlement Funds | ||
Cash contributions to Qualified Settlement Funds | 0 | |
Other (1) | 4,388 | |
Mesh Liability Accrual | ||
Beginning balance | 1,087,172 | |
Additional charges | 0 | |
Cash distributions to settle disputes from Qualified Settlement Funds | (148,824) | |
Cash distributions to settle disputes | (12,761) | |
Ending balance | $ 929,975 |
Shareholders' (Deficit) Equity - Schedule of Changes in Shareholders' Equity (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Increase (Decrease) in Shareholders' Equity [Roll Forward] | |||||
Shareholders' equity, beginning balance | $ 484,880 | ||||
Effect of adopting ASC 606 | $ 3,076 | ||||
Shareholders' equity at January 1, 2018 | $ 487,956 | ||||
Net loss | (566,356) | ||||
Other comprehensive loss | $ (5,971) | $ 10,831 | (11,768) | $ 25,619 | |
Compensation related to share-based awards | 29,986 | ||||
Tax withholding for restricted shares | (1,876) | ||||
Other | (19) | ||||
Shareholders' equity, ending balance | $ (62,077) | $ (62,077) |
Other Income, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Component of Operating Income [Abstract] | ||||
(Gain) loss on sale of business and other assets | $ (24,577) | $ 26 | $ (26,993) | $ (2,311) |
Foreign currency gain, net | (3) | (3,870) | (2,088) | (6,854) |
Equity (earnings) loss from investments accounted for under the equity method, net | (305) | (1,090) | 2,321 | (88) |
Other miscellaneous, net | (3,946) | (1,775) | (4,949) | 507 |
Other income, net | $ (28,831) | $ (6,709) | $ (31,709) | $ (8,746) |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||||
Total consolidated loss from continuing operations before income tax | $ (46,244) | $ (753,500) | $ (528,491) | $ (930,851) | |
Income tax expense (benefit) | $ 6,235 | $ (57,480) | $ 21,726 | $ (69,408) | |
Provisional tax benefit related to Tax Cuts And Jobs Act Of 2017 | $ 36,200 | ||||
Effective Income Tax Rate Reconciliation, Percent | (13.50%) | 7.60% | (4.10%) | 7.50% |
Net Loss Per Share (Reconciliation Of The Numerator And Denominator Of Basic And Diluted Net Loss Per Share) (Details) - USD ($) shares in Thousands, $ / shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Numerator: | ||||
Loss from continuing operations | $ (52,479) | $ (696,020) | $ (550,217) | $ (861,443) |
Loss from discontinued operations, net of tax | (8,388) | (700,498) | (16,139) | (708,903) |
NET LOSS | $ (60,867) | $ (1,396,518) | $ (566,356) | $ (1,570,346) |
Denominator: | ||||
For basic per share data—weighted average shares (shares) | 223,834 | 223,158 | 223,677 | 223,086 |
Dilutive effect of ordinary share equivalents (shares) | 0 | 0 | 0 | 0 |
Dilutive effect of various convertible notes and warrants | $ 0 | $ 0 | $ 0 | $ 0 |
For diluted per share data—weighted average shares (shares) | 223,834 | 223,158 | 223,677 | 223,086 |
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