Ireland | 68-0683755 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland | Not Applicable |
(Address of principal executive offices) | (Zip Code) |
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 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 such files). | Yes þ No o |
Large accelerated filer | þ | Accelerated filer | o |
Non-accelerated filer | o | 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 Exchange Act). | Yes o No þ |
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Ordinary shares, nominal value $0.0001 per share | ENDP | The NASDAQ Global Market |
Ordinary shares, $0.0001 par value | Number of ordinary shares outstanding as of May 2, 2019: | 226,181,657 |
Page | ||
March 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 981,739 | $ | 1,149,113 | |||
Restricted cash and cash equivalents | 332,547 | 305,368 | |||||
Accounts receivable, net | 487,974 | 470,570 | |||||
Inventories, net | 331,391 | 322,179 | |||||
Prepaid expenses and other current assets | 104,899 | 56,139 | |||||
Income taxes receivable | 33,583 | 39,781 | |||||
Total current assets | $ | 2,272,133 | $ | 2,343,150 | |||
MARKETABLE SECURITIES | 969 | 738 | |||||
PROPERTY, PLANT AND EQUIPMENT, NET | 494,429 | 498,892 | |||||
OPERATING LEASE ASSETS | 57,771 | — | |||||
GOODWILL | 3,679,801 | 3,764,636 | |||||
OTHER INTANGIBLES, NET | 3,235,594 | 3,457,306 | |||||
DEFERRED INCOME TAXES | — | 678 | |||||
OTHER ASSETS | 62,627 | 66,993 | |||||
TOTAL ASSETS | $ | 9,803,324 | $ | 10,132,393 | |||
LIABILITIES AND SHAREHOLDERS' DEFICIT | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable and accrued expenses | $ | 840,830 | $ | 1,009,200 | |||
Current portion of legal settlement accrual | 861,325 | 905,085 | |||||
Current portion of operating lease liabilities | 12,051 | — | |||||
Current portion of long-term debt | 35,940 | 34,150 | |||||
Income taxes payable | 1,142 | 1,661 | |||||
Total current liabilities | $ | 1,751,288 | $ | 1,950,096 | |||
DEFERRED INCOME TAXES | 33,581 | 34,487 | |||||
LONG-TERM DEBT, LESS CURRENT PORTION, NET | 8,075,337 | 8,224,269 | |||||
OPERATING LEASE LIABILITIES, LESS CURRENT PORTION | 54,258 | — | |||||
OTHER LIABILITIES | 383,310 | 421,824 | |||||
COMMITMENTS AND CONTINGENCIES (NOTE 13) | |||||||
SHAREHOLDERS' DEFICIT: | |||||||
Euro deferred shares, $0.01 par value; 4,000,000 shares authorized and issued at both March 31, 2019 and December 31, 2018 | 45 | 46 | |||||
Ordinary shares, $0.0001 par value; 1,000,000,000 shares authorized; 224,864,678 and 224,382,791 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 22 | 22 | |||||
Additional paid-in capital | 8,878,133 | 8,855,810 | |||||
Accumulated deficit | (9,148,151 | ) | (9,124,932 | ) | |||
Accumulated other comprehensive loss | (224,499 | ) | (229,229 | ) | |||
Total shareholders' deficit | $ | (494,450 | ) | $ | (498,283 | ) | |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ | 9,803,324 | $ | 10,132,393 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
TOTAL REVENUES, NET | $ | 720,411 | $ | 700,527 | |||
COSTS AND EXPENSES: | |||||||
Cost of revenues | 391,909 | 403,598 | |||||
Selling, general and administrative | 151,123 | 166,667 | |||||
Research and development | 33,486 | 38,646 | |||||
Litigation-related and other contingencies, net | 6 | (2,500 | ) | ||||
Asset impairment charges | 165,448 | 448,416 | |||||
Acquisition-related and integration items | (37,501 | ) | 6,835 | ||||
Interest expense, net | 132,675 | 123,990 | |||||
Gain on extinguishment of debt | (119,828 | ) | — | ||||
Other expense (income), net | 4,802 | (2,878 | ) | ||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | $ | (1,709 | ) | $ | (482,247 | ) | |
INCOME TAX EXPENSE | 10,903 | 15,491 | |||||
LOSS FROM CONTINUING OPERATIONS | $ | (12,612 | ) | $ | (497,738 | ) | |
DISCONTINUED OPERATIONS, NET OF TAX (NOTE 3) | (5,961 | ) | (7,751 | ) | |||
NET LOSS | $ | (18,573 | ) | $ | (505,489 | ) | |
NET LOSS PER SHARE—BASIC: | |||||||
Continuing operations | $ | (0.06 | ) | $ | (2.23 | ) | |
Discontinued operations | (0.02 | ) | (0.03 | ) | |||
Basic | $ | (0.08 | ) | $ | (2.26 | ) | |
NET LOSS PER SHARE—DILUTED: | |||||||
Continuing operations | $ | (0.06 | ) | $ | (2.23 | ) | |
Discontinued operations | (0.02 | ) | (0.03 | ) | |||
Diluted | $ | (0.08 | ) | $ | (2.26 | ) | |
WEIGHTED AVERAGE SHARES: | |||||||
Basic | 224,594 | 223,521 | |||||
Diluted | 224,594 | 223,521 |
Three Months Ended March 31, | |||||||||||||||
2019 | 2018 | ||||||||||||||
NET LOSS | $ | (18,573 | ) | $ | (505,489 | ) | |||||||||
OTHER COMPREHENSIVE INCOME (LOSS): | |||||||||||||||
Net unrealized gain (loss) on foreign currency: | |||||||||||||||
Foreign currency translation gain (loss) arising during the period | $ | 4,730 | $ | (5,797 | ) | ||||||||||
Less: reclassification adjustments for (gain) loss realized in net loss | — | 4,730 | — | (5,797 | ) | ||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | $ | 4,730 | $ | (5,797 | ) | ||||||||||
COMPREHENSIVE LOSS | $ | (13,843 | ) | $ | (511,286 | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
OPERATING ACTIVITIES: | |||||||
Net loss | $ | (18,573 | ) | $ | (505,489 | ) | |
Adjustments to reconcile Net loss to Net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | 162,733 | 191,590 | |||||
Inventory step-up | — | 66 | |||||
Share-based compensation | 24,733 | 17,890 | |||||
Amortization of debt issuance costs and discount | 5,586 | 5,025 | |||||
Deferred income taxes | (785 | ) | 11,615 | ||||
Change in fair value of contingent consideration | (37,501 | ) | 6,835 | ||||
Gain on extinguishment of debt | (119,828 | ) | — | ||||
Asset impairment charges | 165,448 | 448,416 | |||||
Loss (gain) on sale of business and other assets | 1,294 | (2,416 | ) | ||||
Changes in assets and liabilities which (used) provided cash: | |||||||
Accounts receivable | (14,389 | ) | 39,710 | ||||
Inventories | (11,928 | ) | 4,791 | ||||
Prepaid and other assets | 5,059 | 15,668 | |||||
Accounts payable, accrued expenses and other liabilities | (258,202 | ) | (187,426 | ) | |||
Income taxes payable/receivable | 5,770 | 2,571 | |||||
Net cash (used in) provided by operating activities | $ | (90,583 | ) | $ | 48,846 | ||
INVESTING ACTIVITIES: | |||||||
Purchases of property, plant and equipment, excluding capitalized interest | (15,386 | ) | (24,874 | ) | |||
Capitalized interest payments | (1,094 | ) | (751 | ) | |||
Proceeds from sale of business and other assets, net | 103 | 13,350 | |||||
Other investing activities | — | (3,322 | ) | ||||
Net cash used in investing activities | $ | (16,377 | ) | $ | (15,597 | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
FINANCING ACTIVITIES: | |||||||
Proceeds from issuance of notes, net | 1,483,125 | — | |||||
Repayments of notes | (1,499,998 | ) | — | ||||
Repayments of term loans | (8,538 | ) | (8,538 | ) | |||
Repayments of other indebtedness | (1,174 | ) | (1,283 | ) | |||
Payments of deferred financing fees | (211 | ) | — | ||||
Payments for contingent consideration | (4,565 | ) | (11,947 | ) | |||
Payments of tax withholding for restricted shares | (2,414 | ) | (1,642 | ) | |||
Proceeds from exercise of options | 4 | — | |||||
Net cash used in financing activities | $ | (33,771 | ) | $ | (23,410 | ) | |
Effect of foreign exchange rate | 537 | (627 | ) | ||||
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS | $ | (140,194 | ) | $ | 9,212 | ||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,476,837 | 1,311,014 | |||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD | $ | 1,336,643 | $ | 1,320,226 | |||
SUPPLEMENTAL INFORMATION: | |||||||
Cash paid into Qualified Settlement Funds for mesh legal settlements | $ | 81,582 | $ | 66,108 | |||
Cash paid out of Qualified Settlement Funds for mesh legal settlements | $ | 54,984 | $ | 50,636 | |||
Other cash distributions for mesh legal settlements | $ | 10,239 | $ | 4,547 |
• | Lease payments—Lease payments include fixed and certain variable payments, less lease incentives, together with amounts probable of being owed by the Company under residual value guarantees and, if reasonably certain of being paid, the cost of certain renewal options and early termination penalties set forth in the lease arrangement. Lease payments exclude consideration that is not related to the transfer of goods and services to the Company. |
• | Discount rate—The discount rate must be determined based on information available to the Company upon the commencement of a lease. Lessees are required to use the rate implicit in the lease whenever such rate is readily available; however, as the implicit rate in the Company’s leases is generally not readily determinable, the Company generally uses the hypothetical incremental borrowing rate it would have to pay to borrow an amount equal to the lease payments, on a collateralized basis, over a timeframe similar to the lease term. |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Loss from discontinued operations before income taxes | $ | (5,961 | ) | $ | (7,751 | ) | |
Income tax benefit | $ | — | $ | — | |||
Discontinued operations, net of tax | $ | (5,961 | ) | $ | (7,751 | ) |
Employee Separation and Other Benefit-Related Costs | Other Restructuring Costs | Total | |||||||||
Liability balance as of January 1, 2019 | $ | 4,239 | $ | 48 | $ | 4,287 | |||||
Cash distributions | (2,827 | ) | (48 | ) | (2,875 | ) | |||||
Liability balance as of March 31, 2019 | $ | 1,412 | $ | — | $ | 1,412 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net revenues from external customers: | |||||||
Branded Pharmaceuticals | $ | 203,525 | $ | 200,235 | |||
Sterile Injectables | 270,048 | 215,854 | |||||
Generic Pharmaceuticals | 218,526 | 249,240 | |||||
International Pharmaceuticals (1) | 28,312 | 35,198 | |||||
Total net revenues from external customers | $ | 720,411 | $ | 700,527 | |||
Adjusted income from continuing operations before income tax: | |||||||
Branded Pharmaceuticals | $ | 79,008 | $ | 93,814 | |||
Sterile Injectables | 196,183 | 169,445 | |||||
Generic Pharmaceuticals | 49,997 | 74,280 | |||||
International Pharmaceuticals | 12,095 | 13,718 | |||||
Total segment adjusted income from continuing operations before income tax | $ | 337,283 | $ | 351,257 |
(1) | Revenues generated by our International Pharmaceuticals segment are primarily attributable to external customers located in Canada. |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Total consolidated loss from continuing operations before income tax | $ | (1,709 | ) | $ | (482,247 | ) | |
Interest expense, net | 132,675 | 123,990 | |||||
Corporate unallocated costs (1) | 48,095 | 52,460 | |||||
Amortization of intangible assets | 145,599 | 157,172 | |||||
Inventory step-up | — | 66 | |||||
Upfront and milestone payments to partners | 939 | 1,332 | |||||
Separation benefits and other cost reduction initiatives (2) | 2,025 | 48,987 | |||||
Certain litigation-related and other contingencies, net (3) | 6 | (2,500 | ) | ||||
Asset impairment charges (4) | 165,448 | 448,416 | |||||
Acquisition-related and integration items (5) | (37,501 | ) | 6,835 | ||||
Gain on extinguishment of debt | (119,828 | ) | — | ||||
Foreign currency impact related to the remeasurement of intercompany debt instruments | 1,534 | (2,514 | ) | ||||
Other, net (6) | — | (740 | ) | ||||
Total segment adjusted income from continuing operations before income tax | $ | 337,283 | $ | 351,257 |
(1) | Amounts include certain corporate overhead costs, such as headcount, facility and corporate litigation expenses and certain other income and expenses. |
(2) | Amounts for the three months ended March 31, 2019 primarily relate to employee separation costs of $1.8 million and other charges of $0.2 million. Amounts for the three months ended March 31, 2018 primarily relate to employee separation costs of $25.2 million, accelerated depreciation of $17.1 million, charges to increase excess inventory reserves of $2.4 million and other charges of $4.3 million. These charges were related primarily to our restructuring initiatives. 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 13. 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. |
(5) | Amounts primarily relate to changes in the fair value of contingent consideration. |
(6) | Amounts primarily relate to gains on sales of businesses and other assets. |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Branded Pharmaceuticals: | |||||||
Specialty Products: | |||||||
XIAFLEX® | $ | 68,507 | $ | 57,141 | |||
SUPPRELIN® LA | 22,056 | 20,577 | |||||
Other Specialty (1) | 24,403 | 19,027 | |||||
Total Specialty Products | $ | 114,966 | $ | 96,745 | |||
Established Products: | |||||||
PERCOCET® | $ | 30,760 | $ | 31,976 | |||
TESTOPEL® | 15,814 | 15,170 | |||||
Other Established (2) | 41,985 | 56,344 | |||||
Total Established Products | $ | 88,559 | $ | 103,490 | |||
Total Branded Pharmaceuticals (3) | $ | 203,525 | $ | 200,235 | |||
Sterile Injectables: | |||||||
VASOSTRICT® | $ | 139,137 | $ | 113,725 | |||
ADRENALIN® | 47,322 | 29,740 | |||||
Ertapenem for injection | 32,219 | — | |||||
Other Sterile Injectables (4) | 51,370 | 72,389 | |||||
Total Sterile Injectables (3) | $ | 270,048 | $ | 215,854 | |||
Total Generic Pharmaceuticals (5) | $ | 218,526 | $ | 249,240 | |||
Total International Pharmaceuticals (6) | $ | 28,312 | $ | 35,198 | |||
Total revenues, net | $ | 720,411 | $ | 700,527 |
(1) | Products included within Other Specialty are NASCOBAL® Nasal Spray and AVEED®. Beginning with our first quarter 2019 reporting, TESTOPEL®, which was previously included in Other Specialty, has been reclassified and is now included in the Established Products portfolio for all periods presented. |
(2) | Products included within Other Established include, but are not limited to, LIDODERM®, VOLTAREN® Gel, EDEX®, FORTESTA® Gel, and TESTIM®, including the authorized generics of TESTIM® and FORTESTA® Gel. |
(3) | Individual products presented above represent the top two performing products in each product category for the three months ended March 31, 2019 and/or any product having revenues in excess of $25 million during any quarterly period in 2019 or 2018. |
(4) | Products included within Other Sterile Injectables include, but are not limited to, APLISOL® and ephedrine sulfate injection. |
(5) | The 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 months ended March 31, 2019, colchicine tablets, the authorized generic of Takeda Pharmaceuticals U.S.A., Inc.’s Colcrys®, which launched in July 2018, made up 6% of consolidated total revenue. 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 4% and 5% of consolidated total revenues during the three months ended March 31, 2019 and 2018, respectively, includes a variety of specialty pharmaceutical products sold outside the U.S., primarily in Canada through our operating company Paladin. |
March 31, 2019 | December 31, 2018 | ||||||
Restricted cash and cash equivalents—current portion (1) | $ | 332,547 | $ | 305,368 | |||
Restricted cash and cash equivalents—noncurrent portion (2) | 22,357 | 22,356 | |||||
Restricted cash and cash equivalents—total (3) | $ | 354,904 | $ | 327,724 |
(1) | These amounts are reported in our Condensed Consolidated Balance Sheets as Restricted cash and cash equivalents. |
(2) | These amounts are reported in our Condensed Consolidated Balance Sheets as Other assets. |
(3) | Approximately $327.4 million and $299.7 million of our restricted cash and cash equivalents are held in qualified settlement funds (QSFs) for mesh-related matters at March 31, 2019 and December 31, 2018, respectively. The remaining amount of restricted cash and cash equivalents at March 31, 2019 primarily relates to other litigation-related matters. See Note 13. Commitments and Contingencies for further information. |
• | 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 March 31, 2019 using: | |||||||||||||||
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 | $ | 641,012 | $ | — | $ | — | $ | 641,012 | |||||||
Equity securities | 969 | — | — | 969 | |||||||||||
Total | $ | 641,981 | $ | — | $ | — | $ | 641,981 | |||||||
Liabilities: | |||||||||||||||
Acquisition-related contingent consideration—current | $ | — | $ | — | $ | 28,305 | $ | 28,305 | |||||||
Acquisition-related contingent consideration—noncurrent | — | — | 39,537 | 39,537 | |||||||||||
Total | $ | — | $ | — | $ | 67,842 | $ | 67,842 |
Fair Value Measurements at December 31, 2018 using: | |||||||||||||||
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 | $ | 137,215 | $ | — | $ | — | $ | 137,215 | |||||||
Equity securities | 738 | — | — | 738 | |||||||||||
Total | $ | 137,953 | $ | — | $ | — | $ | 137,953 | |||||||
Liabilities: | |||||||||||||||
Acquisition-related contingent consideration—current | $ | — | $ | — | $ | 36,514 | $ | 36,514 | |||||||
Acquisition-related contingent consideration—noncurrent | — | — | 80,189 | 80,189 | |||||||||||
Total | $ | — | $ | — | $ | 116,703 | $ | 116,703 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Beginning of period | $ | 116,703 | $ | 190,442 | |||
Amounts settled | (11,591 | ) | (27,767 | ) | |||
Changes in fair value recorded in earnings | (37,501 | ) | 6,835 | ||||
Effect of currency translation | 231 | (223 | ) | ||||
End of period | $ | 67,842 | $ | 169,287 |
Balance as of December 31, 2018 | Changes in Fair Value Recorded in Earnings | Amounts Settled and Other | Balance as of March 31, 2019 | ||||||||||||
Auxilium acquisition | $ | 14,157 | $ | 388 | $ | — | $ | 14,545 | |||||||
Lehigh Valley Technologies, Inc. acquisitions | 34,700 | (400 | ) | (5,000 | ) | 29,300 | |||||||||
VOLTAREN® Gel acquisition (1) | 56,240 | (37,784 | ) | (6,260 | ) | 12,196 | |||||||||
Other | 11,606 | 295 | (100 | ) | 11,801 | ||||||||||
Total | $ | 116,703 | $ | (37,501 | ) | $ | (11,360 | ) | $ | 67,842 |
(1) | The change in fair value recorded in earnings includes the impact of certain competitive events occurring during the three months ended March 31, 2019. |
Fair Value Measurements during the Three Months Ended March 31, 2019 (1) using: | Total Expense for the Three Months Ended March 31, 2019 | ||||||||||||||
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) | $ | — | $ | — | $ | 41,839 | $ | (78,700 | ) | ||||||
Certain property, plant and equipment | — | — | — | (748 | ) | ||||||||||
Total | $ | — | $ | — | $ | 41,839 | $ | (79,448 | ) |
(1) | The fair value amounts are presented as of the date of the fair value measurement as these assets are not measured at fair value on a recurring basis. Such measurements generally occur in connection with our quarter-end financial reporting close procedures. |
March 31, 2019 | December 31, 2018 | ||||||
Raw materials (1) | $ | 127,622 | $ | 122,825 | |||
Work-in-process (1) | 84,801 | 70,458 | |||||
Finished goods (1) | 118,968 | 128,896 | |||||
Total | $ | 331,391 | $ | 322,179 |
Condensed Consolidated Balance Sheets Line Items | March 31, 2019 | ||||
ROU assets: | |||||
Operating lease ROU assets | Operating lease assets | $ | 57,771 | ||
Finance lease ROU assets | Property, plant and equipment, net | 57,935 | |||
Total ROU assets | $ | 115,706 | |||
Operating lease liabilities: | |||||
Current operating lease liabilities | Current portion of operating lease liabilities | $ | 12,051 | ||
Noncurrent operating lease liabilities | Operating lease liabilities, less current portion | 54,258 | |||
Total operating lease liabilities | $ | 66,309 | |||
Finance lease liabilities: | |||||
Current finance lease liabilities | Accounts payable and accrued expenses | $ | 5,105 | ||
Noncurrent finance lease liabilities | Other liabilities | 33,979 | |||
Total finance lease liabilities | $ | 39,084 |
Condensed Consolidated Statements of Operations Line Items | Three Months Ended March 31, 2019 | ||||
Operating lease cost | Various (1) | $ | 3,499 | ||
Finance lease cost: | |||||
Amortization of ROU assets | Various (1) | $ | 2,296 | ||
Interest on lease liabilities | Interest expense, net | $ | 500 | ||
Other lease costs and income: | |||||
Variable lease costs (2) | Various (1) | $ | 2,089 | ||
Sublease income | Various (1) | $ | (964 | ) |
(1) | Amounts are included in Cost of revenues, Selling, general and administrative and/or Research and development based on the function that the underlying leased asset supports. Of these amounts, a total of $2.7 million was Cost of revenues, $4.1 million was Selling, general and administrative and $0.1 million was Research and development. |
(2) | Amounts represent variable lease costs incurred that were not included in the initial measurement of the lease liability, such as common area maintenance and utilities costs associated with leased real estate and certain costs associated with our automobile leases. |
Operating Leases | Finance Leases | ||||||
2019, excluding amounts already paid | $ | 11,135 | $ | 5,240 | |||
2020 | 13,667 | 7,329 | |||||
2021 | 13,021 | 7,476 | |||||
2022 | 12,309 | 7,626 | |||||
2023 | 9,890 | 7,780 | |||||
Thereafter | 20,622 | 10,521 | |||||
Total future lease payments | $ | 80,644 | $ | 45,972 | |||
Less: amount representing interest | 14,335 | 6,888 | |||||
Present value of future lease payments (lease liability) | $ | 66,309 | $ | 39,084 |
Capital Leases (1) | Operating Leases | ||||||
2019 | $ | 6,884 | $ | 15,800 | |||
2020 | 6,819 | 14,519 | |||||
2021 | 6,921 | 12,883 | |||||
2022 | 7,072 | 12,454 | |||||
2023 | 7,225 | 9,945 | |||||
Thereafter | 9,127 | 20,573 | |||||
Total minimum lease payments | $ | 44,048 | $ | 86,174 | |||
Less: Amount representing interest | 4,084 | ||||||
Total present value of minimum payments | $ | 39,964 | |||||
Less: Current portion of such obligations | 5,845 | ||||||
Long-term capital lease obligations | $ | 34,119 |
(1) | The Malvern, Pennsylvania headquarters lease arrangement is included under Capital Leases. |
March 31, 2019 | ||
Weighted average remaining lease term (years), weighted based on lease liability balances: | ||
Operating leases | 6.5 years | |
Finance leases | 6.2 years | |
Weighted average discount rate (percentages), weighted based on the remaining balance of lease payments: | ||
Operating leases | 5.8 | % |
Finance leases | 5.1 | % |
Three Months Ended March 31, 2019 | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash payments for operating leases | $ | 3,692 | |
Operating cash payments for finance leases | $ | 473 | |
Financing cash payments for finance leases | $ | 1,174 | |
Lease liabilities arising from obtaining right-of-use assets: | |||
Operating leases | $ | — | |
Finance leases | $ | — |
Branded Pharmaceuticals | Sterile Injectables | Generic Pharmaceuticals | International Pharmaceuticals | Total | |||||||||||||||
Goodwill as of December 31, 2018 | $ | 828,818 | $ | 2,731,193 | $ | 151,108 | $ | 53,517 | $ | 3,764,636 | |||||||||
Effect of currency translation | — | — | — | 1,165 | 1,165 | ||||||||||||||
Goodwill impairment charges | — | — | (86,000 | ) | — | (86,000 | ) | ||||||||||||
Goodwill as of March 31, 2019 | $ | 828,818 | $ | 2,731,193 | $ | 65,108 | $ | 54,682 | $ | 3,679,801 |
Branded Pharmaceuticals | Sterile Injectables | Generic Pharmaceuticals | International Pharmaceuticals | Total | |||||||||||||||
Accumulated impairment losses as of December 31, 2018 | $ | 855,810 | $ | — | $ | 2,991,549 | $ | 456,408 | $ | 4,303,767 | |||||||||
Accumulated impairment losses as of March 31, 2019 | $ | 855,810 | $ | — | $ | 3,077,549 | $ | 466,317 | $ | 4,399,676 |
Cost basis: | Balance as of December 31, 2018 | Acquisitions | Impairments | Effect of Currency Translation | Balance as of March 31, 2019 | ||||||||||||||
Indefinite-lived intangibles: | |||||||||||||||||||
In-process research and development | $ | 93,900 | $ | — | $ | — | $ | — | $ | 93,900 | |||||||||
Total indefinite-lived intangibles | $ | 93,900 | $ | — | $ | — | $ | — | $ | 93,900 | |||||||||
Finite-lived intangibles: | |||||||||||||||||||
Licenses (weighted average life of 14 years) | $ | 457,402 | $ | — | $ | — | $ | — | $ | 457,402 | |||||||||
Tradenames | 6,409 | — | — | — | 6,409 | ||||||||||||||
Developed technology (weighted average life of 11 years) | 6,182,015 | — | (78,700 | ) | 5,356 | 6,108,671 | |||||||||||||
Total finite-lived intangibles (weighted average life of 11 years) | $ | 6,645,826 | $ | — | $ | (78,700 | ) | $ | 5,356 | $ | 6,572,482 | ||||||||
Total other intangibles | $ | 6,739,726 | $ | — | $ | (78,700 | ) | $ | 5,356 | $ | 6,666,382 | ||||||||
Accumulated amortization: | Balance as of December 31, 2018 | Amortization | Impairments | Effect of Currency Translation | Balance as of March 31, 2019 | ||||||||||||||
Finite-lived intangibles: | |||||||||||||||||||
Licenses | $ | (398,182 | ) | $ | (4,869 | ) | $ | — | $ | — | $ | (403,051 | ) | ||||||
Tradenames | (6,409 | ) | — | — | — | (6,409 | ) | ||||||||||||
Developed technology | (2,877,829 | ) | (140,730 | ) | — | (2,769 | ) | (3,021,328 | ) | ||||||||||
Total other intangibles | $ | (3,282,420 | ) | $ | (145,599 | ) | $ | — | $ | (2,769 | ) | $ | (3,430,788 | ) | |||||
Net other intangibles | $ | 3,457,306 | $ | 3,235,594 |
2019 | $ | 545,757 | |
2020 | $ | 461,267 | |
2021 | $ | 419,045 | |
2022 | $ | 403,142 | |
2023 | $ | 372,939 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Goodwill impairment charges | $ | 86,000 | $ | 391,000 | |||
Other intangible asset impairment charges | $ | 78,700 | $ | 54,200 |
• | The former Generics reporting unit’s estimated fair value exceeded its carrying amount, resulting in no related goodwill impairment charge. |
• | The new Sterile Injectables reporting unit’s estimated fair value exceeded its carrying amount, resulting in no related goodwill impairment charge. |
• | The new Generic Pharmaceuticals reporting unit’s carrying amount exceeded its estimated fair value, resulting in a pre-tax non-cash goodwill impairment charge of $391.0 million. |
March 31, 2019 | December 31, 2018 | $ Change | % Change | |||||||||||
Contract assets, net (1) | $ | 9,406 | $ | 12,065 | $ | (2,659 | ) | (22 | )% | |||||
Contract liabilities, net (2) | $ | 22,756 | $ | 19,217 | $ | 3,539 | 18 | % |
(1) | At March 31, 2019 and December 31, 2018, approximately $9.4 million and $9.3 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 noncurrent and are included in Other assets. The net decrease in contract assets during the three months ended March 31, 2019 was primarily due to 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, partially offset by certain sales activity during the period. |
(2) | At March 31, 2019 and December 31, 2018, approximately $2.8 million and $1.7 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 noncurrent and are included in Other liabilities. During the three months ended March 31, 2019, the Company entered into new contracts resulting in an increase to contract liabilities of approximately $4.0 million. This increase was partially offset by approximately $0.5 million in revenue recognized during the period. |
March 31, 2019 | December 31, 2018 | ||||||
Trade accounts payable | $ | 97,592 | $ | 96,024 | |||
Returns and allowances | 223,156 | 236,946 | |||||
Rebates | 118,658 | 144,860 | |||||
Chargebacks | 2,481 | 2,971 | |||||
Accrued interest | 45,351 | 130,182 | |||||
Accrued payroll and related benefits | 45,037 | 89,895 | |||||
Accrued royalties and other distribution partner payables | 103,649 | 122,028 | |||||
Acquisition-related contingent consideration—current | 28,305 | 36,514 | |||||
Other | 176,601 | 149,780 | |||||
Total | $ | 840,830 | $ | 1,009,200 |
March 31, 2019 | December 31, 2018 | ||||||||||||||||||||
Effective Interest Rate | Principal Amount | Carrying Amount | Effective Interest Rate | Principal Amount | Carrying Amount | ||||||||||||||||
7.25% Senior Notes due 2022 | 7.25 | % | $ | 10,084 | $ | 10,083 | 7.91 | % | $ | 400,000 | $ | 392,947 | |||||||||
5.75% Senior Notes due 2022 | 5.75 | % | 182,479 | 182,462 | 6.04 | % | 700,000 | 694,464 | |||||||||||||
5.375% Senior Notes due 2023 | 5.61 | % | 210,440 | 208,733 | 5.62 | % | 750,000 | 743,438 | |||||||||||||
6.00% Senior Notes due 2023 | 6.28 | % | 1,439,840 | 1,424,854 | 6.28 | % | 1,635,000 | 1,616,817 | |||||||||||||
5.875% Senior Secured Notes due 2024 | 6.14 | % | 300,000 | 296,205 | 6.14 | % | 300,000 | 296,062 | |||||||||||||
6.00% Senior Notes due 2025 | 6.27 | % | 1,200,000 | 1,183,979 | 6.27 | % | 1,200,000 | 1,183,415 | |||||||||||||
7.50% Senior Secured Notes due 2027 | 7.71 | % | 1,500,000 | 1,480,876 | — | — | |||||||||||||||
Term Loan B Facility Due 2024 | 6.96 | % | 3,355,238 | 3,324,085 | 7.02 | % | 3,363,775 | 3,331,276 | |||||||||||||
Total long-term debt, net | $ | 8,198,081 | $ | 8,111,277 | $ | 8,348,775 | $ | 8,258,419 | |||||||||||||
Less current portion, net | 35,940 | 35,940 | 34,150 | 34,150 | |||||||||||||||||
Total long-term debt, less current portion, net | $ | 8,162,141 | $ | 8,075,337 | $ | 8,314,625 | $ | 8,224,269 |
• | the entry into an amendment (the Revolving Credit Facility Amendment) to the Company’s existing credit agreement, which was originally dated April 27, 2017 (the Credit Agreement); |
• | the issuance of $1,500.0 million of 7.50% Senior Secured Notes due 2027 (the 2027 Notes); |
• | the repurchase of $1,642.2 million aggregate principal amount of certain of the Company’s senior unsecured notes for $1,500.0 million in cash, excluding accrued interest (the Notes Repurchases); and |
• | the solicitation of consents from the holders of the existing 7.25% Senior Notes due 2022 and 5.75% Senior Notes due 2022 (together, the Consent Notes) to certain amendments to the indentures governing such notes, which eliminated substantially all of the restrictive covenants, certain events of default and other provisions contained in each such indenture. |
• | Before April 1, 2022, the 2027 Notes may be redeemed, in whole or in part, by paying the sum of: (i) 100% of the principal amount being redeemed, (ii) an applicable make-whole premium as described in the indenture and (iii) accrued and unpaid interest, if any, to, but not including, the date of redemption. |
• | On or after April 1, 2022, the 2027 Notes may be redeemed, in whole or in part, at redemption prices set forth in the indenture, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. The redemption prices for the 2027 Notes vary over time pursuant to a step-down schedule set forth in the indenture, beginning at 105.625% of the principal amount redeemed and decreasing to 100% by April 1, 2025. |
• | Before April 1, 2022, the 2027 Notes may be redeemed, in part (up to 35% of the principal amount outstanding) with the net cash proceeds from specified equity offerings at 107.500% of the principal amount redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption. |
Maturities (1) | ||||
2019 (2) | $ | 34,150 | ||
2020 | $ | 34,150 | ||
2021 | $ | 34,150 | ||
2022 (2) | $ | 226,713 | ||
2023 | $ | 1,684,430 |
(1) | Certain amounts borrowed pursuant to the Credit Facilities will immediately mature if certain of our senior notes are not refinanced or repaid in full prior to the date that is 91 days prior to the respective stated maturity dates thereof. Accordingly, we may seek to repay or refinance certain senior notes prior to their stated maturity dates. The amounts in this maturities table do not reflect any such early repayment or refinancing; rather, they reflect stated maturity dates. |
(2) | In April 2019, the Company redeemed $1.8 million of senior notes, which had a stated maturity date in 2022. The amounts in this table do not reflect this early redemption; rather, they reflect stated maturity dates. |
Qualified Settlement Funds | Mesh Liability Accrual | ||||||
Balance as of January 1, 2019 | $ | 299,733 | $ | 748,606 | |||
Additional charges | — | — | |||||
Cash contributions to Qualified Settlement Funds | 81,582 | — | |||||
Cash distributions to settle disputes from Qualified Settlement Funds | (54,984 | ) | (54,984 | ) | |||
Cash distributions to settle disputes | — | (10,239 | ) | ||||
Other (1) | 1,057 | 1,057 | |||||
Balance as of March 31, 2019 | $ | 327,388 | $ | 684,440 |
(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 and Mesh Liability Accrual balances. Any interest remaining after all claims have been paid will generally be distributed to the claimants who participated in that settlement. |
Euro Deferred Shares | Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Shareholders' Deficit | ||||||||||||||||||
BALANCE, DECEMBER 31, 2018, PRIOR TO THE ADOPTION OF ASC 842 (1) | $ | 46 | $ | 22 | $ | 8,855,810 | $ | (9,124,932 | ) | $ | (229,229 | ) | $ | (498,283 | ) | ||||||||
Effect of adopting ASC 842 (1) | — | — | — | (4,646 | ) | — | (4,646 | ) | |||||||||||||||
BALANCE, JANUARY 1, 2019 | $ | 46 | $ | 22 | $ | 8,855,810 | $ | (9,129,578 | ) | $ | (229,229 | ) | $ | (502,929 | ) | ||||||||
Net loss | — | — | — | (18,573 | ) | — | (18,573 | ) | |||||||||||||||
Other comprehensive income | — | — | — | — | 4,730 | 4,730 | |||||||||||||||||
Compensation related to share-based awards | — | — | 24,733 | — | — | 24,733 | |||||||||||||||||
Exercise of options | — | — | 4 | — | — | 4 | |||||||||||||||||
Tax withholding for restricted shares | — | — | (2,414 | ) | — | — | (2,414 | ) | |||||||||||||||
Other | (1 | ) | — | — | — | — | (1 | ) | |||||||||||||||
BALANCE, MARCH 31, 2019 | $ | 45 | $ | 22 | $ | 8,878,133 | $ | (9,148,151 | ) | $ | (224,499 | ) | $ | (494,450 | ) |
(1) | Refer to Note 2. Summary of Significant Accounting Policies for further description of ASC 842. |
Euro Deferred Shares | Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Shareholders' Equity (Deficit) | ||||||||||||||||||
BALANCE, DECEMBER 31, 2017, PRIOR TO THE ADOPTION OF ASC 606 (1) | $ | 48 | $ | 22 | $ | 8,791,170 | $ | (8,096,539 | ) | $ | (209,821 | ) | $ | 484,880 | |||||||||
Effect of adopting ASC 606 (1) | — | — | — | 3,076 | — | 3,076 | |||||||||||||||||
BALANCE, JANUARY 1, 2018 | $ | 48 | $ | 22 | $ | 8,791,170 | $ | (8,093,463 | ) | $ | (209,821 | ) | $ | 487,956 | |||||||||
Net loss | — | — | — | (505,489 | ) | — | (505,489 | ) | |||||||||||||||
Other comprehensive loss | — | — | — | — | (5,797 | ) | (5,797 | ) | |||||||||||||||
Compensation related to share-based awards | — | — | 17,890 | — | — | 17,890 | |||||||||||||||||
Tax withholding for restricted shares | — | — | (1,642 | ) | — | — | (1,642 | ) | |||||||||||||||
Other | 1 | — | (12 | ) | — | — | (11 | ) | |||||||||||||||
BALANCE, MARCH 31, 2018 | $ | 49 | $ | 22 | $ | 8,807,406 | $ | (8,598,952 | ) | $ | (215,618 | ) | $ | (7,093 | ) |
(1) | 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. 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. |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net loss (gain) on sale of business and other assets | $ | 1,294 | $ | (2,416 | ) | ||
Foreign currency loss (gain), net | 1,716 | (2,085 | ) | ||||
Net loss from our investments in the equity of other companies | 2,086 | 2,626 | |||||
Other miscellaneous, net | (294 | ) | (1,003 | ) | |||
Other expense (income), net | $ | 4,802 | $ | (2,878 | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Loss from continuing operations before income tax | $ | (1,709 | ) | $ | (482,247 | ) | |
Income tax expense | $ | 10,903 | $ | 15,491 | |||
Effective tax rate | (638.0 | )% | (3.2 | )% |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Numerator: | |||||||
Loss from continuing operations | $ | (12,612 | ) | $ | (497,738 | ) | |
Loss from discontinued operations, net of tax | (5,961 | ) | (7,751 | ) | |||
Net loss | $ | (18,573 | ) | $ | (505,489 | ) | |
Denominator: | |||||||
For basic per share data—weighted average shares | 224,594 | 223,521 | |||||
Dilutive effect of ordinary share equivalents | — | — | |||||
For diluted per share data—weighted average shares | 224,594 | 223,521 |
Three Months Ended March 31, | % Change | |||||||||
2019 | 2018 | 2019 vs. 2018 | ||||||||
Total revenues, net | $ | 720,411 | $ | 700,527 | 3 | % | ||||
Cost of revenues | 391,909 | 403,598 | (3 | )% | ||||||
Gross margin | $ | 328,502 | $ | 296,929 | 11 | % | ||||
Gross margin percentage | 45.6 | % | 42.4 | % | ||||||
Selling, general and administrative | $ | 151,123 | $ | 166,667 | (9 | )% | ||||
Research and development | 33,486 | 38,646 | (13 | )% | ||||||
Litigation-related and other contingencies, net | 6 | (2,500 | ) | NM | ||||||
Asset impairment charges | 165,448 | 448,416 | (63 | )% | ||||||
Acquisition-related and integration items | (37,501 | ) | 6,835 | NM | ||||||
Interest expense, net | 132,675 | 123,990 | 7 | % | ||||||
Gain on extinguishment of debt | (119,828 | ) | — | NM | ||||||
Other expense (income), net | 4,802 | (2,878 | ) | NM | ||||||
Loss from continuing operations before income tax | $ | (1,709 | ) | $ | (482,247 | ) | (100 | )% |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Amortization of intangible assets (1) | $ | 145,599 | $ | 157,172 | |||
Separation benefits and other cost reduction initiatives (2) | $ | — | $ | 29,606 |
(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 decrease during the three months ended March 31, 2019 was primarily driven by asset impairment charges and decreases in the rate of amortization expense for certain assets, partially offset by the impact of certain in-process research and development assets put into service. |
(2) | Amounts in 2018 primarily relate to certain accelerated depreciation charges, employee separation costs, 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 March 31, | |||||||
2019 | 2018 | ||||||
Goodwill impairment charges | $ | 86,000 | $ | 391,000 | |||
Other intangible asset impairment charges | 78,700 | 54,200 | |||||
Property, plant and equipment impairment charges | 748 | 3,216 | |||||
Total asset impairment charges | $ | 165,448 | $ | 448,416 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Interest expense | $ | 137,106 | $ | 127,513 | |||
Interest income | (4,431 | ) | (3,523 | ) | |||
Interest expense, net | $ | 132,675 | $ | 123,990 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net loss (gain) on sale of business and other assets | $ | 1,294 | $ | (2,416 | ) | ||
Foreign currency loss (gain), net | 1,716 | (2,085 | ) | ||||
Net loss from our investments in the equity of other companies | 2,086 | 2,626 | |||||
Other miscellaneous, net | (294 | ) | (1,003 | ) | |||
Other expense (income), net | $ | 4,802 | $ | (2,878 | ) |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Loss from continuing operations before income tax | $ | (1,709 | ) | $ | (482,247 | ) | |
Income tax expense | $ | 10,903 | $ | 15,491 | |||
Effective tax rate | (638.0 | )% | (3.2 | )% |
• | growth in the Specialty Products portfolio of our Branded Pharmaceuticals segment, primarily driven by increased revenues following continued investments in XIAFLEX®; |
• | growth in the Sterile Injectables segment, driven by continued performance of VASOSTRICT® and ADRENALIN® and the full-year impact of ertapenem for injection, which launched during the third quarter of 2018; and |
• | declines in the Generic Pharmaceuticals segment, the Established Products portfolio of the Branded Pharmaceuticals segment and the International Pharmaceuticals segment, primarily driven by continued competitive pressures impacting these product portfolios. |
Three Months Ended March 31, | % Change | |||||||||
2019 | 2018 | 2019 vs. 2018 | ||||||||
Branded Pharmaceuticals | $ | 203,525 | $ | 200,235 | 2 | % | ||||
Sterile Injectables | 270,048 | 215,854 | 25 | % | ||||||
Generic Pharmaceuticals | 218,526 | 249,240 | (12 | )% | ||||||
International Pharmaceuticals (1) | 28,312 | 35,198 | (20 | )% | ||||||
Total net revenues from external customers | $ | 720,411 | $ | 700,527 | 3 | % |
(1) | Revenues generated by our International Pharmaceuticals segment are primarily attributable to external customers located in Canada. |
Three Months Ended March 31, | % Change | |||||||||
2019 | 2018 | 2019 vs. 2018 | ||||||||
Specialty Products: | ||||||||||
XIAFLEX® | $ | 68,507 | $ | 57,141 | 20 | % | ||||
SUPPRELIN® LA | 22,056 | 20,577 | 7 | % | ||||||
Other Specialty (1) | 24,403 | 19,027 | 28 | % | ||||||
Total Specialty Products | $ | 114,966 | $ | 96,745 | 19 | % | ||||
Established Products: | ||||||||||
PERCOCET® | $ | 30,760 | $ | 31,976 | (4 | )% | ||||
TESTOPEL® | 15,814 | 15,170 | 4 | % | ||||||
Other Established (2) | 41,985 | 56,344 | (25 | )% | ||||||
Total Established Products | $ | 88,559 | $ | 103,490 | (14 | )% | ||||
Total Branded Pharmaceuticals (3) | $ | 203,525 | $ | 200,235 | 2 | % |
(1) | Products included within Other Specialty are NASCOBAL® Nasal Spray and AVEED®. Beginning with our first quarter 2019 reporting, TESTOPEL®, which was previously included in Other Specialty, has been reclassified and is now included in the Established Products portfolio for all periods presented. |
(2) | Products included within Other Established include, but are not limited to, LIDODERM®, VOLTAREN® Gel, EDEX®, FORTESTA® Gel, and TESTIM®, including the authorized generics of TESTIM® and FORTESTA® Gel. |
(3) | Individual products presented above represent the top two performing products in each product category for the three months ended March 31, 2019 and/or any product having revenues in excess of $25 million during any quarterly period in 2019 or 2018. |
Three Months Ended March 31, | % Change | |||||||||
2019 | 2018 | 2019 vs. 2018 | ||||||||
VASOSTRICT® | $ | 139,137 | $ | 113,725 | 22 | % | ||||
ADRENALIN® | 47,322 | 29,740 | 59 | % | ||||||
Ertapenem for injection | 32,219 | — | NM | |||||||
Other Sterile Injectables (1) | 51,370 | 72,389 | (29 | )% | ||||||
Total Sterile Injectables (2) | $ | 270,048 | $ | 215,854 | 25 | % |
(1) | Products included within Other Sterile Injectables include, but are not limited to, APLISOL® and ephedrine sulfate injection. |
(2) | Individual products presented above represent the top two performing products within the Sterile Injectables segment for the three months ended March 31, 2019 and/or any product having revenues in excess of $25 million during any quarterly period in 2019 or 2018. |
Three Months Ended March 31, | % Change | |||||||||
2019 | 2018 | 2019 vs. 2018 | ||||||||
Branded Pharmaceuticals | $ | 79,008 | $ | 93,814 | (16 | )% | ||||
Sterile Injectables | 196,183 | 169,445 | 16 | % | ||||||
Generic Pharmaceuticals | 49,997 | 74,280 | (33 | )% | ||||||
International Pharmaceuticals | 12,095 | 13,718 | (12 | )% | ||||||
Total segment adjusted income from continuing operations before income tax | $ | 337,283 | $ | 351,257 | (4 | )% |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Total consolidated loss from continuing operations before income tax | $ | (1,709 | ) | $ | (482,247 | ) | |
Interest expense, net | 132,675 | 123,990 | |||||
Corporate unallocated costs (1) | 48,095 | 52,460 | |||||
Amortization of intangible assets | 145,599 | 157,172 | |||||
Inventory step-up | — | 66 | |||||
Upfront and milestone payments to partners | 939 | 1,332 | |||||
Separation benefits and other cost reduction initiatives (2) | 2,025 | 48,987 | |||||
Certain litigation-related and other contingencies, net (3) | 6 | (2,500 | ) | ||||
Asset impairment charges (4) | 165,448 | 448,416 | |||||
Acquisition-related and integration items (5) | (37,501 | ) | 6,835 | ||||
Gain on extinguishment of debt | (119,828 | ) | — | ||||
Foreign currency impact related to the remeasurement of intercompany debt instruments | 1,534 | (2,514 | ) | ||||
Other, net (6) | — | (740 | ) | ||||
Total segment adjusted income from continuing operations before income tax | $ | 337,283 | $ | 351,257 |
(1) | Amounts include certain corporate overhead costs, such as headcount, facility and corporate litigation expenses and certain other income and expenses. |
(2) | Amounts for the three months ended March 31, 2019 primarily relate to employee separation costs of $1.8 million and other charges of $0.2 million. Amounts for the three months ended March 31, 2018 primarily relate to employee separation costs of $25.2 million, accelerated depreciation of $17.1 million, charges to increase excess inventory reserves of $2.4 million and other charges of $4.3 million. These charges were related primarily to our restructuring initiatives. 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 13. 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. |
(5) | Amounts primarily relate to changes in the fair value of contingent consideration. |
(6) | Amounts primarily relate to gains on sales of businesses and other assets. |
March 31, 2019 | December 31, 2018 | ||||||
Total current assets | $ | 2,272,133 | $ | 2,343,150 | |||
Less: total current liabilities | (1,751,288 | ) | (1,950,096 | ) | |||
Working capital | $ | 520,845 | $ | 393,054 | |||
Current ratio (total current assets divided by total current liabilities) | 1.3:1 | 1.2:1 |
2019 | 2018 | ||||||
Net cash flow provided by (used in): | |||||||
Operating activities | $ | (90,583 | ) | $ | 48,846 | ||
Investing activities | (16,377 | ) | (15,597 | ) | |||
Financing activities | (33,771 | ) | (23,410 | ) | |||
Effect of foreign exchange rate | 537 | (627 | ) | ||||
Movement in cash held for sale | — | — | |||||
Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents | $ | (140,194 | ) | $ | 9,212 |
Incorporated by Reference from: | ||||
Number | Description | File Number | Filing Type | Filing Date |
4.1 | 001-36326 | Current Report on Form 8-K | March 28, 2019 | |
4.2 | 001-36326 | Current Report on Form 8-K | March 28, 2019 | |
10.1 | 001-36326 | Current Report on Form 8-K | March 28, 2019 | |
10.2 | Not applicable; filed herewith | |||
10.3 | Not applicable; filed herewith | |||
10.4 | 001-36326 | Current Report on Form 8-K | April 26, 2019 | |
10.5 | 001-36326 | Current Report on Form 8-K | April 26, 2019 | |
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 March 31, 2019, 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) |
1. | Consent to Assignment. BTC hereby (i) acknowledges and consents to the Assignment, (ii) acknowledges that the Assignment does not constitute a default under, or breach of, the Agreement; (iii) waives any right (if any exists) to terminate the Agreement based on the Assignment; (iv) waives any right (if any exists) to any period of prior notice; (v) agrees not to exercise any other remedies based solely on such Assignment for purposes of the Agreement; (vi) confirms that no other notice or documentation is required under the Agreement in connection with the Assignment; and (vii) agrees that the Agreement will remain in full force and effect after the consummation of the Assignment. The acknowledgement, consent and waivers set forth above will only be effective for, and relate to, the Assignment specifically described herein relating to the Reorganization and will not be effective for or relate to any other transactions involving BTC. Notwithstanding the foregoing, Assignment to Endo Global Aesthetics Limited, Endo Designated Activity Company, an Irish designated activity company (“Endo DAC”) hereby guarantees to BTC Endo Global Aesthetics Limited’s performance of all obligations under the Agreement, provided however, that in the event of a transfer or sale of all or substantially all of the assets or business of Endo Global Aesthetics Limited to a third party not under the control of Endo International PLC, or in the event of a merger or consolidation of Endo Global Aesthetics Limited with a third party not under the control of Endo International PLC, Endo DAC will use commercially reasonable efforts to cause the guarantee to be replaced by a guarantee that is reasonably satisfactory to BTC made by the purchaser or successor of Endo Global Aesthetics Limited, following which Endo DAC and its affiliates shall be released in full from any and all liabilities arising from the foregoing guarantee. |
2. | Royalty Reporting. Section 7.1(d) of the Agreement shall be amended and restated in its entirety as follows: |
3. | Amendment. Except to the extent amended hereby, the provisions of the Agreement shall remain unmodified, and the Agreement, as amended by this Amendment shall remain in full force and effect in accordance with its terms. |
4. | Governing Law. This Amendment shall be governed by and construed in accordance with the law of the State of New York, without regard to the conflicts of law rules of such state. |
5. | Counterparts. This Amendment may be executed simultaneously in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. |
/s/ Ronald Law | |
Name: | Ronald Law |
Title: | Senior Vice President-Business Development |
Date: | February 26, 2019 |
/s/ Carl A Valenstein | |
Name: | Carl Valenstein |
Title: | Corporate Secretary |
Date: | February 26, 2019 |
/s/ MT Bolger | |
Name: | Marie-Therese Bolger |
Title: | Secretary |
Date: | February 26, 2019 |
/s/ MT Bolger | |
Name: | Marie-Therese Bolger |
Title: | Secretary |
Date: | February 26, 2019 |
Name of Participant: | |
Total Target TSR Performance Award (Total Number of Restricted Stock Units Underlying the Target TSR 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. |
Name of Participant: | |
Total Target FCF Performance Award (Total Number of Restricted Stock Units Underlying the Target FCF Performance Award): | |
Date of Grant: | |
Performance Period for the FCF Performance Award: | The period beginning on January 1, 2019 and ending on December 31, 2021. |
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 |
1. | AbbVie Inc. (ABBV) |
2. | Abbott Laboratories (ABT) |
3. | Akorn, Inc. (AKRX) |
4. | Alexion Pharmaceuticals Inc. (ALXN) |
5. | Alkermes plc (ALKS) |
6. | Allergan plc (AGN) |
7. | AMAG Pharmaceuticals Inc. (AMAG) |
8. | Amgen Inc. (AMGN) |
9. | Amneal Pharmaceuticals Inc. (AMRX) |
10. | AstraZeneca plc (AZN) |
11. | Biogen Inc. (BIIB) |
12. | BioMarin Pharmaceutical Inc. (BMRN) |
13. | Bristol-Myers Squibb Company (BMY) |
14. | Celgene Corporation (CELG) |
15. | Dr. Reddy’s Laboratories Ltd. (RDY) |
16. | Eli Lilly and Company (LLY) |
17. | Gilead Sciences Inc. (GILD) |
18. | GlaxoSmithKline plc (GSK) |
19. | Horizon Pharma Public Limited Company (HZNP) |
20. | Incyte Corporation (INCY) |
21. | Jazz Pharmaceuticals Public Limited Company (JAZZ) |
22. | Johnson & Johnson (JNJ) |
23. | Lannett Company (LCI) |
24. | Mallinckrodt Public Limited Company (MNK) |
25. | Merck & Co. Inc. (MRK) |
26. | Mylan N.V. (MYL) |
27. | Novartis AG (NVS) |
28. | Novo Nordisk A/S (NVO) |
29. | Perrigo Company Public Limited Company (PRGO) |
30. | Pfizer Inc. (PFE) |
31. | Qiagen NV (QGEN) |
32. | Regeneron Pharmaceuticals Inc. (REGN) |
33. | Roche Holding AG (RHHBY) |
34. | Sanofi (SNY) |
35. | Taro Pharmaceutical Industries Ltd. (TARO) |
36. | Teva Pharmaceutical Industries Limited (TEVA) |
37. | United Therapeutics Corporation (UTHR) |
38. | Valeant Pharmaceuticals International, Inc. (VRX) |
39. | Vertex Pharmaceuticals Inc. (VRTX) |
40. | Zoetis Inc. (ZTS) |
Adjusted 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 95% of Target but less than 100% of Target | 0.75 |
Equal to or greater than 90% of Target but less than 95% of Target | 0.5 |
Less than 90% of Target | 0 |
/S/ PAUL V. CAMPANELLI | |
Paul V. Campanelli | |
President and Chief Executive Officer (Principal Executive Officer) | |
Date: | May 9, 2019 |
/S/ BLAISE COLEMAN | |
Blaise Coleman | |
Executive Vice President, Chief Financial Officer (Principal Financial Officer) | |
Date: | May 9, 2019 |
/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 |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
May 02, 2019 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
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 Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Ordinary Shares Outstanding | 226,181,657 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Euro deferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Euro deferred shares, shares authorized (in shares) | 4,000,000 | 4,000,000 |
Euro deferred shares, shares issued (in shares) | 4,000,000 | 4,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 224,864,678 | 224,382,791 |
Common stock, shares outstanding (in shares) | 224,864,678 | 224,382,791 |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (18,573) | $ (505,489) |
Net unrealized gain (loss) on foreign currency: | ||
Foreign currency translation gain (loss) arising during the period | 4,730 | (5,797) |
Less: reclassification adjustments for (gain) loss realized in net loss | 0 | 0 |
Foreign currency translation gain (loss) | 4,730 | (5,797) |
OTHER COMPREHENSIVE INCOME (LOSS) | 4,730 | (5,797) |
COMPREHENSIVE LOSS | $ (13,843) | $ (511,286) |
Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
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 (U.S. GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. 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 March 31, 2019 and the results of our operations and our cash flows for the periods presented. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The year-end Condensed Consolidated Balance Sheet data as of December 31, 2018 was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. 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 the Annual Report. Certain prior period amounts have been reclassified to conform to the current period presentation. |
Summary of Significant Accounting Policies |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||
Accounting Policies [Abstract] | |||||||||
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies Added or Updated since December 31, 2018 Significant changes to our significant accounting policies since December 31, 2018 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 the Annual Report. Lease Accounting. The Company adopted Accounting Standards Codification Topic 842, Leases (ASC 842) on January 1, 2019. For further discussion of the adoption, refer to the “Recent Accounting Pronouncements Adopted or Otherwise Effective as of March 31, 2019” section below. ASC 842 applies to a number of arrangements to which the Company is party. Whenever the Company enters into a new arrangement, it must determine, at the inception date, whether the arrangement is or contains a lease. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. If a lease exists, the Company must then determine the separate lease and nonlease components of the arrangement. Each right to use an underlying asset conveyed by a lease arrangement should generally be considered a separate lease component if it both: (i) can benefit the Company without depending on other resources not readily available to the Company and (ii) does not significantly affect and is not significantly affected by other rights of use conveyed by the lease. Aspects of a lease arrangement that transfer other goods or services to the Company but do not meet the definition of lease components are considered nonlease components. The consideration owed by the Company pursuant to a lease arrangement is generally allocated to each lease and nonlease components for accounting purposes. However, the Company has elected, for all of its leases, to not separate lease and nonlease components. Each lease component is accounted for separately from other lease components, but together with the associated nonlease components. For each lease, the Company must then determine the lease term, the present value of lease payments and the classification of the lease as either an operating or finance lease. The lease term is the period of the lease not cancellable by the Company, together with periods covered by: (i) renewal options the Company is reasonably certain to exercise, (ii) termination options the Company is reasonably certain not to exercise and (iii) renewal or termination options that are controlled by the lessor. The present value of lease payments is calculated based on:
In making the determination of whether a lease is an operating lease or a finance lease, the Company considers the lease term in relation to the economic life of the leased asset, the present value of lease payments in relation to the fair value of the leased asset and certain other factors, including the lessee's and lessor's rights, obligations and economic incentives over the term of the lease. Generally, upon the commencement of a lease, the Company will record a lease liability and a right-of-use (ROU) asset. However, the Company has elected, for all underlying assets with initial lease terms of twelve months or less (known as short-term leases), to not recognize a lease liability or ROU asset. Lease liabilities are initially recorded at lease commencement as the present value of future lease payments. ROU assets are initially recorded at lease commencement as the initial amount of the lease liability, together with the following, if applicable: (i) initial direct costs incurred by the lessee and (ii) lease payments made by the lessor, net of lease incentives received, prior to lease commencement. Over the lease term, the Company generally increases its lease liabilities using the effective interest method and decreases its lease liabilities for lease payments made. The Company generally amortizes its ROU assets over the shorter of the estimated useful life and the lease term and assesses its ROU assets for impairment, similar to other long-lived assets. For finance leases, amortization expense and interest expense are recognized separately in the Condensed Consolidated Statements of Operations, with amortization expense generally recorded on a straight-line basis and interest expense recorded using the effective interest method. For operating leases, a single lease cost is generally recognized in the Condensed Consolidated Statements of Operations on a straight-line basis over the lease term unless an impairment has been recorded with respect to a leased asset. Lease costs for short-term leases not recognized in the Condensed Consolidated Balance Sheets are recognized in the Condensed Consolidated Statements of Operations on a straight-line basis over the lease term. Variable lease costs not initially included in the lease liability and ROU asset impairment charges are expensed as incurred. Cloud Computing Arrangements. The Company may from time to time incur costs in connection with hosting arrangements that are service contracts. Subsequent to the Company’s January 1, 2019 adoption of Accounting Standards Update (ASU) No. 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (ASU 2018-15), which is further described below, the Company capitalizes any such implementation costs, expenses them over the terms of the respective hosting arrangements and subjects them to impairment testing consistent with other long-lived assets. Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted as of March 31, 2019 In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (ASU 2018-13). ASU 2018-13 modifies the disclosure requirements on fair value measurements in Accounting Standards Codification Topic 820, Fair Value Measurement. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain aspects of ASU 2018-13 require prospective treatment, while others require retrospective treatment. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2018-13 on the Company’s disclosures. In November 2018, the FASB issued ASU No. 2018-18, “Clarifying the Interaction Between Topic 808 and Topic 606” (ASU 2018-18). The main provisions of ASU 2018-18 include: (i) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and (ii) precluding the presentation of transactions with collaborative arrangement participants that are not directly related to sales to third parties together with revenue. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. ASU 2018-18 should be applied retrospectively to the date of initial application of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606), which was January 1, 2018 for the Company. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2018-18 on the Company’s consolidated results of operations, financial position and disclosures. Recent Accounting Pronouncements Adopted or Otherwise Effective as of March 31, 2019 In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (ASU 2016-02) to establish a comprehensive new accounting standard for leases. ASU 2016-02, together with a series of subsequently-issued related ASUs, have been codified in ASC 842. ASC 842 supersedes the lease accounting requirements in Accounting Standards Codification Topic 840, Leases (ASC 840), and requires lessees to, among other things, recognize on the balance sheet a right-of-use asset and a right-of-use lease liability, representing the present value of future minimum lease payments, for most leases. The Company adopted ASC 842 using the modified retrospective approach with an effective date of January 1, 2019 for leases that existed on that date. Prior period results continue to be presented under ASC 840 based on the accounting standards originally in effect for such periods. The Company has elected certain practical expedients permitted under the transition guidance within ASC 842 to leases that commenced before January 1, 2019, including the package of practical expedients, as well as the practical expedient permitting the Company to not assess whether certain land easements contain leases. Due to the Company's election of these practical expedients, the Company has carried forward certain historical conclusions for existing contracts, including conclusions relating to initial direct costs and to the existence and classification of leases. On January 1, 2019, as a result of adopting ASC 842, the Company recognized new ROU assets, current lease liabilities and noncurrent lease liabilities associated with operating leases of $59.4 million, $11.0 million and $57.3 million, respectively, which were recorded in the Condensed Consolidated Balance Sheets as Operating lease assets, Current portion of operating lease liabilities and Operating lease liabilities, less current portion, respectively. The Company also derecognized certain assets and liabilities related to existing build-to-suit lease arrangements for which construction was completed prior to the date of transition and recognized new finance lease ROU assets and lease liabilities related to those lease arrangements. The net effect of the Company’s adoption of ASC 842 resulted in a net increase to Accumulated deficit of $4.6 million. In August 2018, the FASB issued ASU 2018-15. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (including hosting arrangements where a software license is deemed to exist). ASU 2018-15 also requires the customer to expense any such capitalized implementation costs over the term of the hosting arrangement and to apply the existing impairment guidance for long-lived assets to such capitalized costs. Additionally, ASU 2018-15 sets forth required disclosures and guidance on financial statement classification for expenses, cash flows and balances related to implementation costs within the scope of ASU 2018-15. The Company early adopted this guidance during the first quarter of 2019 on a prospective basis. |
Discontinued Operations |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DISCONTINUED OPERATIONS | NOTE 3. DISCONTINUED OPERATIONS Astora The operating results of the Company’s Astora business, which the Board of Directors resolved to wind-down in 2016, 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 months ended March 31, 2019 and 2018 (in thousands):
Loss from discontinued operations before income taxes includes Litigation-related and other contingencies, net, 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 $6.0 million and $7.8 million for the three months ended March 31, 2019 and 2018, respectively, and the impact of cash activity related to vaginal mesh cases. There were no material net cash flows related to Astora discontinued investing activities during the three months ended March 31, 2019 and 2018. There was no depreciation or amortization during the three months ended March 31, 2019 or 2018 related to Astora. |
Restructuring |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING | NOTE 4. RESTRUCTURING Set forth below are disclosures relating to restructuring initiatives that resulted in material expenses or cash expenditures during any of the three months ended March 31, 2019 and 2018 or had material restructuring liabilities at either March 31, 2019 or December 31, 2018. Employee separation, retention and certain other employee benefit-related costs related to our restructurings are expensed ratably over the requisite service period. Other restructuring costs are generally expensed as incurred. 2017 Generic Pharmaceuticals Restructuring Initiative On July 21, 2017, the Company announced that after completing a comprehensive review of its manufacturing network, it would be ceasing operations and closing its manufacturing and distribution facilities in Huntsville, Alabama (the 2017 Generic Pharmaceuticals Restructuring Initiative). The closure of the facilities was completed in June 2018 and the facilities were sold in the fourth quarter of 2018 for net cash proceeds of $23.1 million, resulting in a net gain on disposal of $12.5 million. As a result of the 2017 Generic Pharmaceuticals Restructuring Initiative, the Company incurred pre-tax charges of $27.7 million during the three months ended March 31, 2018. The expenses consisted of charges relating to accelerated depreciation of $17.1 million, employee separation, retention and other benefit-related costs of $3.8 million, asset impairment charges of $2.6 million and certain other charges of $4.2 million. These charges are included in the Generic Pharmaceuticals segment. Accelerated depreciation and employee separation, retention and other benefit-related costs are primarily included in Cost of revenues in the Condensed Consolidated Statements of Operations. 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 did not incur any material pre-tax charges as a result of the 2017 Generic Pharmaceuticals Restructuring Initiative during the three months ended March 31, 2019 and does not expect to incur additional material pre-tax restructuring-related expenses related to this initiative. The liability related to the 2017 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 three months ended March 31, 2019 were as follows (in thousands):
Substantially all cash payments are expected to be made by the end of the third quarter in 2019. January 2018 Restructuring Initiative In January 2018, the Company initiated a restructuring initiative that included a reorganization of its 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 incurred pre-tax charges of $22.9 million during the three months ended March 31, 2018. The expenses primarily consisted of employee separation, retention and other benefit-related costs of $21.9 million and certain other charges of $1.0 million. Of the total charges incurred, $10.2 million are included in the Generic Pharmaceuticals segment, $5.2 million are included in Corporate unallocated costs, $3.8 million are included in the Sterile Injectables segment, $3.0 million are included in the International Pharmaceuticals segment and $0.7 million are included in the Branded 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 did not incur any material pre-tax charges as a result of the January 2018 Restructuring Initiative during the three months ended March 31, 2019 and does not expect to incur additional material pre-tax restructuring-related expenses related to this initiative. At December 31, 2018, the remaining liability balance was $1.1 million. Substantially all related cash payments were made by the end of the first quarter of 2019. |
Segment Results |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT RESULTS | NOTE 5. SEGMENT RESULTS During the first quarter of 2019, the Company changed the names of its reportable segments. This change, which was intended to simplify the segments’ names, had no impact on the Company’s unaudited Condensed Consolidated Financial Statements or segment results for any of the periods presented. The Company’s four reportable business segments are set forth below. These 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 and changes in the fair value of contingent consideration; 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 directly 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. Branded Pharmaceuticals Our Branded 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, NASCOBAL® Nasal Spray, AVEED®, PERCOCET®, TESTOPEL®, LIDODERM®, VOLTAREN® Gel, EDEX®, FORTESTA® Gel and TESTIM®, among others. Sterile Injectables Our 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 ertapenem for injection, the authorized generic of Merck Sharp & Dohme Corp’s Invanz®, and ephedrine sulfate injection, among others. Generic Pharmaceuticals Our Generic Pharmaceuticals segment consists of a differentiated product portfolio including solid oral extended-release, solid oral immediate-release, 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, pain, women’s health and oncology. The following represents selected information for the Company’s reportable segments for the three months ended March 31, 2019 and 2018 (in thousands):
__________
There were no material revenues from external customers attributed to an individual country outside of the U.S. during any of the periods presented. There were no material tangible long-lived assets in an individual country other than the U.S. as of March 31, 2019 or December 31, 2018. The table below provides reconciliations of our Total consolidated loss from continuing operations before income tax, which is determined in accordance with U.S. GAAP, to our total segment adjusted income from continuing operations before income tax for the three months ended March 31, 2019 and 2018 (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 6. FAIR VALUE MEASUREMENTS Financial Instruments The financial instruments recorded in our Condensed Consolidated Balance Sheets include cash and cash equivalents (including money market funds), 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), accounts receivable, accounts payable and accrued expenses approximate their fair values. The following table presents current and noncurrent restricted cash and cash equivalent balances at March 31, 2019 and December 31, 2018 (in thousands):
__________
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 noncurrent assets. Equity securities are included in Marketable securities in our Condensed Consolidated Balance Sheets at March 31, 2019 and December 31, 2018. 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 these estimated inputs used as of the date of this report could have resulted in significant adjustments 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 March 31, 2019 and December 31, 2018 were as follows (in thousands):
At March 31, 2019 and December 31, 2018, money market funds include $69.1 million and $86.9 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 13. Commitments and Contingencies for further discussion of our product liability cases. At March 31, 2019 and December 31, 2018, the differences between the amortized cost and the fair value of our money market funds and equity securities, as well as the related gross unrealized gains or losses, were not material, individually or in the aggregate. 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 months ended March 31, 2019 and 2018 (in thousands):
At March 31, 2019, the fair value measurements of the contingent consideration obligations were determined using risk-adjusted discount rates ranging from approximately 9.5% to 15.0% (weighted average rate of approximately 11.7%). 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. Amounts recorded for the current and noncurrent 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 three months ended March 31, 2019 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 three months ended March 31, 2019 were as follows (in thousands):
__________
Additionally, the Company recorded aggregate pre-tax non-cash goodwill impairment charges during the three months ended March 31, 2019 of $86.0 million. Refer to Note 9. Goodwill and Other Intangibles for further description, including the valuation methodologies utilized. |
Inventories |
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INVENTORIES | NOTE 7. INVENTORIES Inventories consist of the following at March 31, 2019 and December 31, 2018 (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 is classified as noncurrent inventory and is not included in the table above. At March 31, 2019 and December 31, 2018, $9.9 million and $8.1 million, respectively, of noncurrent inventory was included in Other assets in the Condensed Consolidated Balance Sheets. As of March 31, 2019 and December 31, 2018, the Company’s Condensed Consolidated Balance Sheets included approximately $10.5 million and $12.5 million, respectively, of capitalized pre-launch inventories related to generic and sterile injectable products that were not yet available to be sold. |
Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | NOTE 8. LEASES We have entered into contracts with third parties to lease a variety of assets, including certain real estate, machinery, equipment, automobiles and other assets. Our leases frequently allow for lease payments that could vary based on factors such as inflation or the degree of utilization of the underlying asset and the incurrence of contractual charges such as those for common area maintenance or utilities. Renewal and/or early termination options are common in our lease arrangements, particularly with respect to our real estate leases. Our ROU assets and lease liabilities generally exclude periods covered by renewal options and include periods covered by early termination options (based on our conclusion that it is not reasonably certain that we will exercise such options). Our most significant lease is for our U.S. headquarters in Malvern, Pennsylvania. The initial term of the lease is through 2024 and includes three renewal options, each for an additional 60-month period. These renewal options are not considered reasonably certain of exercise and are therefore excluded from the ROU asset and lease liability. We are party to certain sublease arrangements, primarily related to our real estate leases, where we act as the lessee and intermediate lessor. For example, we sublease portions of our Malvern, Pennsylvania facility to multiple tenants through sublease arrangements ending in 2024, with certain limited renewal and early termination options. The following table presents information about the Company's ROU assets and lease liabilities at March 31, 2019 (in thousands):
The following table presents information about lease costs and expenses and sublease income for the three months ended March 31, 2019 (in thousands):
__________
The following table, determined in accordance with ASC 842, provides the undiscounted amount of future cash flows included in our lease liabilities at March 31, 2019 for each of the five years subsequent to December 31, 2018 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at March 31, 2019 (in thousands):
The Company’s future minimum lease commitments as of December 31, 2018 under ASC 840, as reported in the Annual Report, were as follows:
__________
The following table provides the weighted average remaining lease term and weighted average discount rates for our leases as of March 31, 2019:
The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the three months ended March 31, 2019 (in thousands):
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Leases | NOTE 8. LEASES We have entered into contracts with third parties to lease a variety of assets, including certain real estate, machinery, equipment, automobiles and other assets. Our leases frequently allow for lease payments that could vary based on factors such as inflation or the degree of utilization of the underlying asset and the incurrence of contractual charges such as those for common area maintenance or utilities. Renewal and/or early termination options are common in our lease arrangements, particularly with respect to our real estate leases. Our ROU assets and lease liabilities generally exclude periods covered by renewal options and include periods covered by early termination options (based on our conclusion that it is not reasonably certain that we will exercise such options). Our most significant lease is for our U.S. headquarters in Malvern, Pennsylvania. The initial term of the lease is through 2024 and includes three renewal options, each for an additional 60-month period. These renewal options are not considered reasonably certain of exercise and are therefore excluded from the ROU asset and lease liability. We are party to certain sublease arrangements, primarily related to our real estate leases, where we act as the lessee and intermediate lessor. For example, we sublease portions of our Malvern, Pennsylvania facility to multiple tenants through sublease arrangements ending in 2024, with certain limited renewal and early termination options. The following table presents information about the Company's ROU assets and lease liabilities at March 31, 2019 (in thousands):
The following table presents information about lease costs and expenses and sublease income for the three months ended March 31, 2019 (in thousands):
__________
The following table, determined in accordance with ASC 842, provides the undiscounted amount of future cash flows included in our lease liabilities at March 31, 2019 for each of the five years subsequent to December 31, 2018 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at March 31, 2019 (in thousands):
The Company’s future minimum lease commitments as of December 31, 2018 under ASC 840, as reported in the Annual Report, were as follows:
__________
The following table provides the weighted average remaining lease term and weighted average discount rates for our leases as of March 31, 2019:
The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the three months ended March 31, 2019 (in thousands):
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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 three months ended March 31, 2019 were as follows (in thousands):
The carrying amounts of goodwill at March 31, 2019 and December 31, 2018 are net of the following accumulated impairments (in thousands):
Other Intangible Assets Changes in the amount of other intangible assets for the three months ended March 31, 2019 are set forth in the table below (in thousands).
Amortization expense for the three months ended March 31, 2019 and 2018 totaled $145.6 million and $157.2 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, 2018 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 months ended March 31, 2019 and 2018, the Company incurred the following goodwill and other intangible asset impairment charges (in thousands):
A summary of significant goodwill and other intangible asset impairment tests and related charges is included below. Pre-tax non-cash intangible asset impairment charges related 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. As a result of certain competitive events that occurred during the first quarter of 2019, we tested the goodwill of our Generic Pharmaceuticals reporting unit for impairment as of March 31, 2019. The fair value of the reporting unit was estimated using an income approach that utilized a discounted cash flow model. The discount rate utilized in this test was 10.5%. This goodwill impairment test resulted in a pre-tax non-cash goodwill impairment charge of $86.0 million during the three months ended March 31, 2019, representing the excess of this reporting unit’s carrying amount over its estimated fair value. The Generic Pharmaceuticals impairment can be primarily attributed to the impact of the competitive events referenced above and an increase in the discount rate used in the determination of fair value. During the first quarter of 2018, a change in segments resulted in changes to our reporting units for goodwill impairment testing purposes, including the creation of a new 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 Sterile Injectables and 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:
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Contract Assets and Liabilities |
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Contract with Customer, Asset and Liability [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Assets and Liabilities | NOTE 10. CONTRACT ASSETS AND LIABILITIES Our revenue consists almost entirely of sales of our pharmaceutical products to customers, whereby we ship products 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 March 31, 2019, the unfulfilled performance obligations for these types of contracts relate to ordered but undelivered products. 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 three months ended March 31, 2019, we recognized revenue of $10.1 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 Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable And Accrued Expenses | NOTE 11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses include the following at March 31, 2019 and December 31, 2018 (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | NOTE 12. DEBT The following table presents information about the Company’s total indebtedness at March 31, 2019 and December 31, 2018 (dollars in thousands):
The Company and its subsidiaries, with certain customary exceptions, guarantee or serve as issuers or borrowers of the debt instruments representing substantially all of the Company’s indebtedness at March 31, 2019. The obligations under (i) the senior secured notes and (ii) the Credit Agreement (as defined below) and related loan documents are secured on a pari passu basis by a perfected first priority (subject to certain permitted liens) lien on the collateral securing such instruments, which collateral represents substantially all of the assets of the issuers or borrowers and the guarantors party thereto (subject to customary exceptions). Our senior unsecured notes are unsecured and effectively subordinated in right of priority to our credit agreement and our senior secured notes, in each case to the extent of the value of the collateral securing such instruments. 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 and $7.2 billion at March 31, 2019 and December 31, 2018, respectively. Based on this valuation methodology, we determined these debt instruments represent Level 2 measurements within the fair value hierarchy. Senior Notes and Senior Secured Notes At March 31, 2019 and December 31, 2018, we were in compliance with all covenants contained in the indentures governing our various senior notes and senior secured notes. Credit Facilities The credit facilities consist of a $1,000.0 million revolving credit facility (the Revolving Credit Facility) and a senior secured term loan facility (the Term Loan Facility and, together with the Revolving Credit Facility, the Credit Facilities). As of March 31, 2019, we had $996.8 million of remaining credit available through the Revolving Credit Facility. At March 31, 2019 and December 31, 2018, we were in compliance with all covenants contained in the Credit Agreement (as defined below). March 2019 Refinancing In March 2019, the Company executed several transactions (the March 2019 Refinancing Transactions), which included:
The Revolving Credit Facility Amendment amended the Credit Agreement to, among other things, (i) extend the maturity of the commitments under the Revolving Credit Facility from April 2022 to March 2024 (with the exception of $76.0 million of commitments that were not extended), (ii) provide greater covenant flexibility by increasing the maximum Secured Net Leverage Ratio described in the Financial Covenant (as defined in the Credit Agreement) from 3.50:1.00 to 4.50:1.00 and (iii) limit the scenarios under which such Financial Covenant will be tested. The 2027 Notes were issued by Par Pharmaceutical, Inc. (PPI), a wholly-owned indirect subsidiary of the Company, in a private offering to “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) and outside the U.S. to non-U.S. persons in compliance with Regulation S under the Securities Act. The 2027 Notes are guaranteed on a senior secured basis by the Company and its subsidiaries that also guarantee the Credit Agreement (collectively, the Guarantors). The 2027 Notes are senior secured obligations of PPI and the Guarantors and are secured by the same collateral that secures the Credit Agreement and the Company’s existing senior secured notes. Interest on the 2027 Notes is payable semiannually in arrears on April 1 and October 1 of each year, beginning on October 1, 2019. The 2027 Notes will mature on April 1, 2027; however, the indenture governing these notes allows for redemption prior to maturity, in whole or in part, subject to certain restrictions and limitations described therein, in the following ways:
The 2027 Notes indenture contains covenants that, among other things, restrict the Company’s ability and the ability of its Restricted Subsidiaries (as defined in the indenture) to incur certain additional indebtedness and issue preferred stock; make certain dividends, distributions, investments and other restricted payments; sell certain assets; enter into sale and leaseback transactions; agree to certain restrictions on the ability of restricted subsidiaries to make certain payments to the Company or any of its restricted subsidiaries; create certain liens; merge, consolidate or sell all or substantially all of the Company’s assets; enter into certain transactions with affiliates or designate subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of exceptions and qualifications, including the fall away or revision of certain of these covenants and release of collateral upon the 2027 Notes receiving investment grade credit ratings. The Company used the net proceeds of the 2027 Notes and cash on hand primarily to fund the Notes Repurchases and to pay certain premiums, fees and expenses related thereto. The Notes Repurchases were completed by Endo Finance LLC (Endo Finance), a wholly-owned subsidiary of the Company, pursuant to a tender offer to repurchase portions of the Company’s outstanding 7.25% Senior Notes due 2022, 5.75% Senior Notes due 2022, 5.375% Senior Notes due 2023 and 6.00% Senior Notes due 2023. In connection with the Notes Repurchases, Endo Finance repurchased $1,642.2 million of senior unsecured note indebtedness, representing the aggregate principal amount repurchased, for $1,500.0 million in cash (including certain cash premiums related thereto). The $1,642.2 million aggregate repurchase amount consisted of (i) $389.9 million aggregate principal amount of the 7.25% Senior Notes due 2022, (ii) $517.5 million aggregate principal amount of the 5.75% Senior Notes due 2022, (iii) $539.6 million aggregate principal amount of the 5.375% Senior Notes due 2023 and (iv) $195.2 million aggregate principal amount of the 6.00% Senior Notes due 2023. The aggregate carrying amount of notes repurchased was $1,624.0 million. In conjunction with the Notes Repurchases, Endo Finance also solicited consents from holders of the Consent Notes to certain proposed amendments to the applicable indentures under which each series of Consent Notes were issued, which would eliminate substantially all restrictive covenants, certain events of default and certain other provisions contained in each such indenture. The proposed amendments were effected pursuant to a supplemental indenture to each such indenture executed by Endo Finance and the guarantors of the Consent Notes, which became operative upon the repurchase of at least the requisite consent amount of the applicable series of Consent Notes tendered. The difference between the cash paid and the carrying amount of notes repurchased in the Notes Repurchases resulted in a $124.0 million gain recorded as Gain on extinguishment of debt in the Condensed Consolidated Statements of Operations. In connection with the March 2019 Refinancing Transactions, we also incurred costs and fees totaling $26.2 million, of which $4.2 million related to the Notes Repurchases, $19.1 million related to the 2027 Notes issuance and $2.9 million related to the Revolving Credit Facility Amendment. The costs incurred in connection with the Notes Repurchases were charged to expense in the first quarter of 2019 and recorded as an offset to the Gain on extinguishment of debt. The costs incurred in connection with the 2027 Notes issuance and the Revolving Credit Facility Amendment, together with previously deferred debt issuance costs associated with the Revolving Credit Facility, have been deferred and will be amortized as interest expense over the terms of the respective instruments. Maturities The following table presents the maturities on our long-term debt for each of the five fiscal years subsequent to December 31, 2018 (in thousands):
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Commitments And Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | NOTE 13. COMMITMENTS AND CONTINGENCIES Legal Proceedings and Investigations We and certain of our subsidiaries are involved in various claims, legal proceedings and internal and governmental investigations (collectively, proceedings) that arise from time to time, including, among others, those relating to product liability, intellectual property, regulatory compliance, consumer protection, tax 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 business, financial condition, 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 them. 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 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 realization of the potential claim for recovery is considered probable. Amounts recovered under our insurance policies could be materially less than the stated coverage limits and may not be adequate to cover damages, other relief 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 March 31, 2019, our accrual for loss contingencies totaled $861.3 million, the most significant components of which relate to product liability and related matters associated with vaginal mesh and testosterone. 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. While the timing of the resolution of certain of the matters accrued for as loss contingencies remains uncertain and could extend beyond 12 months, as of March 31, 2019, the entire liability accrual amount is classified in the Current portion of legal settlement accrual in the Condensed Consolidated Balance Sheets. 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 multidistrict litigation (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 considered restricted cash and/or restricted cash equivalents. 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. In June 2018, at the request of the MDL court, the Judicial Panel on Multidistrict Litigation entered a minute order suspending the transfer of cases into the MDL. Subsequently, the MDL court issued a pretrial order discontinuing the direct filing of claims in MDL No. 2325. The MDL court also issued similar orders in other MDLs involving claims against other mesh manufacturers. Although the Company believes it has appropriately estimated the probable total amount of loss associated with all mesh-related matters as of the date of this report, fact and expert discovery is ongoing in certain cases that have not settled, and it is reasonably possible that further claims may be filed or asserted and that 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 balances during the three months ended March 31, 2019 (in thousands):
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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 $3.4 billion, $327.4 million of which remains in the QSFs as of March 31, 2019. We currently expect to fund into the QSFs the remaining payments under all settlement agreements during 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 various 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 May 2, 2019, we were aware of approximately 935 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. Most 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). 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 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 that 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 included 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. This lawsuit is not part of the settlement described above. 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 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. In February 2019, the court granted defendants’ motion for summary judgment. Plaintiffs have appealed to the U.S. Court of Appeals for the Seventh Circuit. 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. Opioid-Related Matters Since 2014, multiple U.S. states, counties, other governmental persons or entities and private plaintiffs have filed suit against us and/or certain of our subsidiaries, including Endo Health Solutions Inc. (EHSI), EPI, PPI, Par Pharmaceutical Companies, Inc. (PPCI), Vintage Pharmaceuticals, LLC, Generics Bidco I, LLC and DAVA Pharmaceuticals, LLC, 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 May 2, 2019, the cases of which we were aware include, but are not limited to, approximately 13 cases filed by or on behalf of states; approximately 1,925 cases filed by counties, cities, Native American tribes and/or other government-related persons or entities; approximately 136 cases filed by hospitals, health systems, unions, health and welfare funds or other third-party payers and approximately 59 cases filed by individuals. Certain of the cases have been filed as putative class actions. In addition to the litigation in the U.S., in August 2018, an action against Paladin Labs Inc., EPI, the Company and various other manufacturers and distributors was commenced in British Columbia on behalf of all federal, provincial and territorial governments and agencies in Canada that paid healthcare, pharmaceutical and treatment costs related to opioids. Many of the U.S. 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 as a friend of the court, which the MDL court granted. The MDL court has issued a series of case management orders permitting motions to dismiss addressing threshold legal issues in certain cases (and has issued orders granting in part and denying in part some of those motions), setting a trial date in October 2019 for the claims of two Ohio counties, 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, South Carolina 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 with certain of these cases scheduled for trial beginning in 2020. 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. Such matters could have a material adverse effect on our business, financial condition, results of operations and cash flows. 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: Various state attorneys general have served subpoenas and/or CIDs on EHSI and/or EPI. 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 (FDA). 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. Such matters could have a material adverse effect on our business, financial condition, results of operations and cash flows. 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 addressed to Par Pharmaceuticals. The subpoena requested documents and information focused primarily on product and pricing information relating to the authorized generic version of Lanoxin (digoxin) oral tablets and generic doxycycline products, and on communications with competitors and others regarding those products. We are cooperating with the investigation. In May 2018, we and our subsidiary PPCI each received a CID from the DOJ 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. Since March 2016, various private plaintiffs and state attorneys general have filed cases against our subsidiary PPI and/or, in some instances, the Company, Generics Bidco I, LLC, DAVA Pharmaceuticals, LLC and/or PPCI, as well as other pharmaceutical manufacturers and, in some instances, other corporate and/or individual defendants, alleging price-fixing and other anticompetitive conduct with respect to generic pharmaceutical products. These cases, which include proposed class actions filed on behalf of direct purchasers, end-payers and indirect purchaser resellers, as well as non-class action suits, 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). The various complaints and amended complaints generally assert claims under federal and/or state antitrust law, state consumer protection statutes and/or state common law, and seek damages, treble damages, civil penalties, disgorgement, declaratory and injunctive relief, costs and attorneys’ fees. Some claims are based on alleged product-specific conspiracies. With respect to our subsidiaries, the allegations in the various complaints focus on amitriptyline, baclofen, digoxin, divalproex ER, doxycycline hyclate, doxycycline monohydrate, nystatin, propranolol and/or zoledronic acid. Other claims allege broader, multiple-product conspiracies involving various combinations of these and/or other products. Under these overarching conspiracy theories, plaintiffs seek to hold all alleged participants in a particular conspiracy jointly and severally liable for all harms caused by the alleged conspiracy, not just harms related to the products manufactured and/or sold by a particular defendant. In October 2018, the MDL court denied defendants’ motions to dismiss federal antitrust claims relating to digoxin, divalproex ER and doxycycline hyclate, among other products. In February 2019, the MDL court dismissed certain state law claims relating to these same products, but allowed other state law claims relating to those products to proceed. In February 2019, the defendants moved to dismiss plaintiffs’ overarching conspiracy claims; that motion remains pending. The MDL court has also allowed certain discovery. In May 2019, our subsidiary PPCI received written notice from certain state attorneys general that they intend to assert federal and/or state antitrust and/or consumer protection law claims with respect to additional generic pharmaceutical products. We do not know when or against whom such claims will be filed or the substance of such claims. 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 other pharmaceutical companies generally alleging that they had entered into an anticompetitive agreement to restrain trade through the settlement of patent infringement litigation concerning U.S. Patent No. 5,827,529 (the ‘529 patent) and other patents. 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. EPI settled with certain opt-out retailer plaintiffs in October 2017. In September 2018, the court approved EPI’s settlement with the class plaintiffs and entered judgment dismissing the class cases with prejudice. In connection with the settlements, several indirect purchasers which previously had opted out were permitted to rejoin the class. The class settlement agreements provide for aggregate payments of approximately $100 million. As of May 2, 2019, EPI had paid approximately $90 million of this total, including approximately $60 million in 2018 and $30 million in the first quarter of 2019. The remaining $10 million is included in our accrual for loss contingencies. 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, LLC (formerly Impax Laboratories, Inc. and referred to herein as 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 expert discovery. In March 2019, direct and indirect purchaser plaintiffs filed motions for class certification. 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 other pharmaceutical companies alleging violations of antitrust law arising out of their 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 MDL 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 against EGHI and other defendants. In June 2018, the MDL court granted in part and denied in part various summary judgment and evidentiary motions filed by defendants. In particular, the court 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, and the court denied a motion for reconsideration, or in the alternative leave to file an interlocutory appeal, in October 2018. In July 2018, the district court denied certain plaintiffs’ motion for certification of a direct purchaser class. The MDL court has scheduled trial for February 2020. We will continue 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 complaints 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. Some cases were filed on behalf of putative classes of direct and indirect purchasers; others are non-class action suits. The plaintiffs 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. In September 2018, the putative class plaintiffs stipulated to the dismissal without prejudice of their claims against EPI and us, and the retailer plaintiffs later did the same. PPI filed a partial motion to dismiss certain claims in September 2018. We intend 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 asserted 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, these and other cases, including proposed direct purchaser class actions in which PPI was not named as a defendant, 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). In May 2019, the direct purchaser plaintiffs filed a motion seeking leave of court to file an amended consolidated class complaint adding PPI as a defendant in the direct purchaser actions. 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 and/or EHSI later received similar CIDs from other states. A CID from Alaska’s Office of the Attorney General in February 2015 included requests for documents and information concerning agreements with Actavis and Impax settling the OPANA® ER patent litigation. We are cooperating with these investigations. 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. In April 2019, the Court of Appeals affirmed the District Court’s decision in full. 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. Plaintiff filed its motion for class certification in July 2018. In April 2019, the parties informed the court that they had reached a settlement in principle. The settlement in principle would provide the investor class $50 million in exchange for a release of their claims; the settlement is subject to court approval. As a result, during the first quarter of 2019, the Company recorded an increase of approximately $50 million to its accrual for loss contingencies. As the Company’s insurers have agreed to fund the foregoing settlement, the Company also recorded a corresponding insurance receivable of approximately $50 million during the first quarter of 2019, which is included in Prepaid expenses and other current assets in the Condensed Consolidated Balance Sheets. 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 January 2019, plaintiff amended her statement of claim to add a claim on behalf of herself and similarly-situated Canadian investors who purchased Endo’s securities between January 11, 2016 and June 8, 2017. This new claim is based on the Company’s decision to remove reformulated OPANA® ER from the market. 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, the court appointed SEB Investment Management AB 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 20 current and former directors, officers and employees of Endo as defendants. In April 2018, the defendants moved to dismiss the amended complaint. In December 2018, the court dismissed the plaintiff’s claims against four individual defendants, but otherwise denied the motion to dismiss. The case is currently in discovery. 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 June 2018, the court appointed Park Employees’ Annuity and Benefit Fund of Chicago lead plaintiff in the action. In August 2018, the lead plaintiff filed an amended complaint. In September 2018, the defendants moved to dismiss the amended complaint. That motion remains pending. 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 PPCI and its affiliate Par Sterile Products, LLC (PSP) in the U.S. District Court for the District of New Jersey alleging that Par Pharmaceutical Companies, Inc. and its affiliate engaged in an anticompetitive scheme to exclude competition for PPCI’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 PPCI 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 Abbreviated New Drug Application (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, PPCI 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 November 2017, we filed a motion for preliminary injunction seeking various forms of relief. In January 2018, we filed a first amended complaint adding four former employees and one former consultant of PSP as defendants and numerous causes of action against some or all of those individuals, 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. We subsequently deposited a bond to the court’s interest-bearing account to secure the preliminary injunction. Defendants filed a motion asking the court to reconsider the bond amount, which the court denied. 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. Discovery began in May 2018. 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. The parties completed appellate briefing in January 2019. Also in January 2019, the court denied all four of defendants’ pending motions to dismiss. In February 2019, the defendants filed their answers and affirmative defenses, and certain defendants also filed counterclaims for defamation, tortious interference with contract, tortious interference with prospective business relations and witness interference. The counterclaims seek actual, exemplary and punitive damages and other relief. In March 2019, we filed a motion to dismiss all of the defendants’ counterclaims. This motion is still pending. In April 2019, the Third Circuit Court of Appeals affirmed the court’s preliminary injunction but remanded for additional fact-finding concerning the duration of the preliminary injunction and, if needed, consideration of the additional trade secrets raised in our motion for preliminary injunction but not addressed by the preliminary injunction order. In October 2017, Endo Par Innovation Company, LLC (EPIC) and PSP filed a complaint in the U.S. 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 sought (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 the 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 would 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 August 2018, before the 180-day stay period expired, Athenex Pharma Solutions, LLC and Athenex Pharmaceutical Division, LLC announced they had commenced bulk compounding of vasopressin, and moved to intervene in EPIC and PSP’s case against the FDA. Later that month, EPIC and PSP invoked their ability to terminate the stay and filed a Motion for Preliminary Injunction. Before responding to the Motion for Preliminary Injunction, the FDA issued a notice containing a proposed finding that there is no clinical need to bulk compound vasopressin under Section 503B in August 2018. In September 2018, the FDA advised EPIC and PSP that it would agree to use its best efforts to finalize the vasopressin clinical need rulemaking by December 31, 2018, if the case were again stayed. EPIC and PSP agreed to the requested stay. In December 2018, the appropriations act that had been funding the DOJ and components of the FDA expired, resulting in a lapse of appropriations; therefore, the FDA moved the court for a further stay of the case until appropriations were restored. The court granted the motion in January 2019, ordering the FDA to file a notification with the court within three business days of DOJ operations resuming. After government appropriations were restored, the FDA advised that it would use its best efforts to finalize the vasopressin clinical need determination by March 15, 2019. The FDA finalized the vasopressin clinical need determination on March 4, 2019, finding that because of VASOSTRICT®’s availability, there is no clinical need for outsourcing facilities to compound drugs using bulk vasopressin. That same day, Athenex, Inc., Athenex Pharma Solutions, LLC, and Athenex Pharmaceutical Division, LLC filed a complaint in the U.S. District Court for the District of Columbia, challenging the FDA’s clinical need determination for vasopressin. EPIC and PSP intervened as defendants in the action. The parties and the court agreed to an expedited summary judgment briefing, and a hearing on cross-motions for summary judgment was held in April 2019. EPIC and PSP expect a ruling by early summer. EPIC and PSP’s suit against the FDA remains stayed until that ruling issues. In August 2018, Athenex filed a declaratory judgment action in the U.S. District Court for the Western District of New York, a case styled Athenex v. Par, alleging non-infringement and/or invalidity of the patents the Company has listed in the Orange Book in view of VASOSTRICT®. The Company moved to dismiss Athenex’s case on multiple grounds in October 2018, which motion was opposed by Athenex in December 2018. The Company responded to this opposition in December 2018. This motion has not yet been decided. 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)) 20 units/ml. 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; 9,744,239; 9,750,785; and 9,937,223, which variously cover either vasopressin-containing pharmaceutical compositions or methods of using a vasopressin-containing dosage form to increase blood pressure in humans. In May 2018, PPI, PSP and EPIC filed a lawsuit against Eagle in the U.S. 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. A claim construction hearing is scheduled for May 2019, with a bench trial scheduled for May 2020. In September 2018, PSP and PPI received a notice letter from Sandoz Inc. (Sandoz) advising of the filing by such company of an ANDA for a generic version of VASOSTRICT® (vasopressin IV solution (infusion)) 200 units/10 ml. In October 2018, PPI, PSP and EPIC filed a lawsuit against Sandoz in the U.S. District Court for the District of New Jersey within the 45-day deadline to invoke a 30-month stay of FDA approval pursuant to the Hatch-Waxman legislative scheme. In October 2018, PSP and PPI received an additional notice letter from Sandoz advising of the filing by such company of an ANDA for a generic version of the 20 units/1 ml presentation for VASOSTRICT®. In November 2018, the complaint was amended to add a claim for the additional notice letter, within the 45-day deadline to invoke a 30-month stay of FDA approval pursuant to the Hatch-Waxman legislative scheme. The Company continues to vigorously defend its intellectual property. In November 2018, PSP and PPI received a notice letter from Amphastar Pharmaceuticals, Inc. (Amphastar) advising of the filing by such company of an ANDA for a generic version of VASOSTRICT® (vasopressin IV solution (infusion)) 20 units/1 ml. In December 2018, PPI, PSP and EPIC filed a lawsuit against Amphastar in the U.S. 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. The Company continues to vigorously defend its intellectual property. In March 2019, PSP and PPI received a notice letter from Amneal Pharmaceuticals LLC (Amneal) advising of the filing by such company of an ANDA for a generic version of VASOSTRICT® (vasopressin IV solution (infusion)) 20 units/1 ml and 200 units/10 ml. In April 2019, PPI, PSP and EPIC filed a lawsuit against Amneal in the U.S. 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. The Company continues to vigorously defend its intellectual property. The Company’s accrual for loss contingencies includes, 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 losses that could be incurred. Paragraph IV Certifications on OPANA® ER In August 2014 and October 2014, the U.S. Patent Office issued U.S. Patent Nos. 8,808,737 (the ‘737 patent) and 8,871,779 (the ‘779 patent) respectively, which cover a method of using OPANA® ER and a highly pure version of the API 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 the ‘779 patent was invalid. The District Court issued an order enjoining the defendants from launching their generic products until the expiration of the ‘779 patent in November 2029. A trial for infringement of the ‘779 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 the ‘779 patent and that Actavis had failed to show that the ‘779 patent was invalid. Teva, Amneal and Actavis have appealed these holdings. We have appealed the holding that the ‘737 patent is invalid. A hearing on those appeals took place in December 2018. We are awaiting decisions on the Teva, Amneal and Actavis appeals. On Endo’s appeal, the court ruled in Endo’s favor in April 2019, holding that the ‘737 patent is not invalid for claiming a natural law. Once the remaining appeals are decided, this case will be referred back to the District Court. 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 Income (Loss) |
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Equity [Abstract] | |
Other Comprehensive Loss | NOTE 14. OTHER COMPREHENSIVE INCOME (LOSS) There were no tax effects allocated to any component of Other comprehensive income (loss) for the three months ended March 31, 2019 and 2018. Substantially all of the Company’s Accumulated other comprehensive loss at March 31, 2019 and December 31, 2018 consists of Foreign currency translation loss. |
Shareholders' Deficit |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Deficit | NOTE 15. SHAREHOLDERS' DEFICIT The following table presents a reconciliation of the beginning and ending balances in Total shareholders' deficit for the three months ended March 31, 2019 (in thousands):
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The following table presents a reconciliation of the beginning and ending balances in Total shareholders' equity (deficit) for the three months ended March 31, 2018 (in thousands):
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Share-Based Compensation The Company recognized share-based compensation expense of $24.7 million and $17.9 million during the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the total remaining unrecognized compensation cost related to non-vested share-based compensation awards amounted to $88.4 million. There are 0.2 million performance share units outstanding as of March 31, 2019, 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 March 31, 2019, the weighted average remaining requisite service period for non-vested stock options was 1.5 years and for non-vested restricted stock units was 2.2 years. |
Other Expense (Income), Net |
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OTHER INCOME, NET | NOTE 16. OTHER EXPENSE (INCOME), NET The components of Other expense (income), net for the three months ended March 31, 2019 and 2018 are as follows (in thousands):
Net loss (gain) on sale of business and other assets primarily relates to the sales of various ANDAs. Amounts of Foreign currency loss (gain), net result from the remeasurement of the Company’s foreign currency denominated assets and liabilities. Net loss from our investments in the equity of other companies includes the income statement impacts of our investments in the equity of other companies, including those accounted for under the equity method and those classified as marketable securities. |
Income Taxes |
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INCOME TAXES | NOTE 17. INCOME TAXES The following table displays our Loss from continuing operations before income tax, Income tax expense and Effective tax rate for the three months ended March 31, 2019 and 2018 (dollars in thousands):
The income tax expense for the three months ended March 31, 2019 primarily relates to a taxable gain arising from the extinguishment of debt in the March 2019 Refinancing Transactions. As of March 31, 2019, 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 expense for the comparable 2018 period primarily relates to the geographic mix of pre-tax earnings and discrete tax expense incurred in connection with an intercompany asset restructuring. |
Net Loss Per Share |
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NET LOSS PER SHARE | NOTE 18. 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 months ended March 31, 2019 and 2018 (in thousands):
Basic net loss per share amounts are computed based on the weighted average number of ordinary shares outstanding during the period. Diluted net loss per share amounts are computed based on the weighted average number of ordinary shares outstanding and, if there is net income from continuing operations during the period, the dilutive impact of ordinary share equivalents outstanding during the period. The dilutive effect of ordinary share equivalents is measured using the treasury stock method. 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 15. Shareholders' Deficit, are not considered in the calculation of basic or diluted weighted average shares. All potentially dilutive items were excluded from the diluted share calculation for the three months ended March 31, 2019 and 2018 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] | |||||||||
Lease accounting | Lease Accounting. The Company adopted Accounting Standards Codification Topic 842, Leases (ASC 842) on January 1, 2019. For further discussion of the adoption, refer to the “Recent Accounting Pronouncements Adopted or Otherwise Effective as of March 31, 2019” section below. ASC 842 applies to a number of arrangements to which the Company is party. Whenever the Company enters into a new arrangement, it must determine, at the inception date, whether the arrangement is or contains a lease. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. If a lease exists, the Company must then determine the separate lease and nonlease components of the arrangement. Each right to use an underlying asset conveyed by a lease arrangement should generally be considered a separate lease component if it both: (i) can benefit the Company without depending on other resources not readily available to the Company and (ii) does not significantly affect and is not significantly affected by other rights of use conveyed by the lease. Aspects of a lease arrangement that transfer other goods or services to the Company but do not meet the definition of lease components are considered nonlease components. The consideration owed by the Company pursuant to a lease arrangement is generally allocated to each lease and nonlease components for accounting purposes. However, the Company has elected, for all of its leases, to not separate lease and nonlease components. Each lease component is accounted for separately from other lease components, but together with the associated nonlease components. For each lease, the Company must then determine the lease term, the present value of lease payments and the classification of the lease as either an operating or finance lease. The lease term is the period of the lease not cancellable by the Company, together with periods covered by: (i) renewal options the Company is reasonably certain to exercise, (ii) termination options the Company is reasonably certain not to exercise and (iii) renewal or termination options that are controlled by the lessor. The present value of lease payments is calculated based on:
In making the determination of whether a lease is an operating lease or a finance lease, the Company considers the lease term in relation to the economic life of the leased asset, the present value of lease payments in relation to the fair value of the leased asset and certain other factors, including the lessee's and lessor's rights, obligations and economic incentives over the term of the lease. Generally, upon the commencement of a lease, the Company will record a lease liability and a right-of-use (ROU) asset. However, the Company has elected, for all underlying assets with initial lease terms of twelve months or less (known as short-term leases), to not recognize a lease liability or ROU asset. Lease liabilities are initially recorded at lease commencement as the present value of future lease payments. ROU assets are initially recorded at lease commencement as the initial amount of the lease liability, together with the following, if applicable: (i) initial direct costs incurred by the lessee and (ii) lease payments made by the lessor, net of lease incentives received, prior to lease commencement. Over the lease term, the Company generally increases its lease liabilities using the effective interest method and decreases its lease liabilities for lease payments made. The Company generally amortizes its ROU assets over the shorter of the estimated useful life and the lease term and assesses its ROU assets for impairment, similar to other long-lived assets. For finance leases, amortization expense and interest expense are recognized separately in the Condensed Consolidated Statements of Operations, with amortization expense generally recorded on a straight-line basis and interest expense recorded using the effective interest method. For operating leases, a single lease cost is generally recognized in the Condensed Consolidated Statements of Operations on a straight-line basis over the lease term unless an impairment has been recorded with respect to a leased asset. Lease costs for short-term leases not recognized in the Condensed Consolidated Balance Sheets are recognized in the Condensed Consolidated Statements of Operations on a straight-line basis over the lease term. Variable lease costs not initially included in the lease liability and ROU asset impairment charges are expensed as incurred. |
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Cloud computing arrangements | Cloud Computing Arrangements. The Company may from time to time incur costs in connection with hosting arrangements that are service contracts. Subsequent to the Company’s January 1, 2019 adoption of Accounting Standards Update (ASU) No. 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (ASU 2018-15), which is further described below, the Company capitalizes any such implementation costs, expenses them over the terms of the respective hosting arrangements and subjects them to impairment testing consistent with other long-lived assets. |
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Recently issued and adopted accounting pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted as of March 31, 2019 In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-13, “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (ASU 2018-13). ASU 2018-13 modifies the disclosure requirements on fair value measurements in Accounting Standards Codification Topic 820, Fair Value Measurement. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain aspects of ASU 2018-13 require prospective treatment, while others require retrospective treatment. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2018-13 on the Company’s disclosures. In November 2018, the FASB issued ASU No. 2018-18, “Clarifying the Interaction Between Topic 808 and Topic 606” (ASU 2018-18). The main provisions of ASU 2018-18 include: (i) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and (ii) precluding the presentation of transactions with collaborative arrangement participants that are not directly related to sales to third parties together with revenue. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. ASU 2018-18 should be applied retrospectively to the date of initial application of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606), which was January 1, 2018 for the Company. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2018-18 on the Company’s consolidated results of operations, financial position and disclosures. Recent Accounting Pronouncements Adopted or Otherwise Effective as of March 31, 2019 In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (ASU 2016-02) to establish a comprehensive new accounting standard for leases. ASU 2016-02, together with a series of subsequently-issued related ASUs, have been codified in ASC 842. ASC 842 supersedes the lease accounting requirements in Accounting Standards Codification Topic 840, Leases (ASC 840), and requires lessees to, among other things, recognize on the balance sheet a right-of-use asset and a right-of-use lease liability, representing the present value of future minimum lease payments, for most leases. The Company adopted ASC 842 using the modified retrospective approach with an effective date of January 1, 2019 for leases that existed on that date. Prior period results continue to be presented under ASC 840 based on the accounting standards originally in effect for such periods. The Company has elected certain practical expedients permitted under the transition guidance within ASC 842 to leases that commenced before January 1, 2019, including the package of practical expedients, as well as the practical expedient permitting the Company to not assess whether certain land easements contain leases. Due to the Company's election of these practical expedients, the Company has carried forward certain historical conclusions for existing contracts, including conclusions relating to initial direct costs and to the existence and classification of leases. On January 1, 2019, as a result of adopting ASC 842, the Company recognized new ROU assets, current lease liabilities and noncurrent lease liabilities associated with operating leases of $59.4 million, $11.0 million and $57.3 million, respectively, which were recorded in the Condensed Consolidated Balance Sheets as Operating lease assets, Current portion of operating lease liabilities and Operating lease liabilities, less current portion, respectively. The Company also derecognized certain assets and liabilities related to existing build-to-suit lease arrangements for which construction was completed prior to the date of transition and recognized new finance lease ROU assets and lease liabilities related to those lease arrangements. The net effect of the Company’s adoption of ASC 842 resulted in a net increase to Accumulated deficit of $4.6 million. In August 2018, the FASB issued ASU 2018-15. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (including hosting arrangements where a software license is deemed to exist). ASU 2018-15 also requires the customer to expense any such capitalized implementation costs over the term of the hosting arrangement and to apply the existing impairment guidance for long-lived assets to such capitalized costs. Additionally, ASU 2018-15 sets forth required disclosures and guidance on financial statement classification for expenses, cash flows and balances related to implementation costs within the scope of ASU 2018-15. The Company early adopted this guidance during the first quarter of 2019 on a prospective basis. |
Discontinued Operations (Tables) |
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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 months ended March 31, 2019 and 2018 (in thousands):
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Restructuring (Tables) |
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Schedule of restructuring reserve by type of cost | The liability related to the 2017 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 three months ended March 31, 2019 were as follows (in thousands):
Substantially all cash payments are expected to be made by the end of the third quarter in 2019. |
Segment Results (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reportable segments information | . The following represents selected information for the Company’s reportable segments for the three months ended March 31, 2019 and 2018 (in thousands):
__________
The table below provides reconciliations of our Total consolidated loss from continuing operations before income tax, which is determined in accordance with U.S. GAAP, to our total segment adjusted income from continuing operations before income tax for the three months ended March 31, 2019 and 2018 (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) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of cash and cash equivalents | The following table presents current and noncurrent restricted cash and cash equivalent balances at March 31, 2019 and December 31, 2018 (in thousands):
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Restrictions on cash and cash equivalents | The following table presents current and noncurrent restricted cash and cash equivalent balances at March 31, 2019 and December 31, 2018 (in thousands):
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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 March 31, 2019 and December 31, 2018 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 months ended March 31, 2019 and 2018 (in thousands):
The following table presents changes to the Company’s liability for acquisition-related contingent consideration during the three months ended March 31, 2019 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 three months ended March 31, 2019 were as follows (in thousands):
__________
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventory | Inventories consist of the following at March 31, 2019 and December 31, 2018 (in thousands):
__________ (1) The components of inventory shown in the table above are net of allowance for obsolescence. |
Leases (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities, lessee | The following table presents information about the Company's ROU assets and lease liabilities at March 31, 2019 (in thousands):
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Lease, cost | The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the three months ended March 31, 2019 (in thousands):
The following table presents information about lease costs and expenses and sublease income for the three months ended March 31, 2019 (in thousands):
__________
The following table provides the weighted average remaining lease term and weighted average discount rates for our leases as of March 31, 2019:
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Lessee, operating lease, liability, maturity | The following table, determined in accordance with ASC 842, provides the undiscounted amount of future cash flows included in our lease liabilities at March 31, 2019 for each of the five years subsequent to December 31, 2018 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at March 31, 2019 (in thousands):
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Finance lease, liability, maturity | The following table, determined in accordance with ASC 842, provides the undiscounted amount of future cash flows included in our lease liabilities at March 31, 2019 for each of the five years subsequent to December 31, 2018 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at March 31, 2019 (in thousands):
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Schedule of future minimum rental payments for operating leases | The Company’s future minimum lease commitments as of December 31, 2018 under ASC 840, as reported in the Annual Report, were as follows:
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Schedule of future minimum lease payments for capital leases | The Company’s future minimum lease commitments as of December 31, 2018 under ASC 840, as reported in the Annual Report, were as follows:
__________
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Goodwill And Other Intangibles (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the carrying amount of goodwill | The carrying amounts of goodwill at March 31, 2019 and December 31, 2018 are net of the following accumulated impairments (in thousands):
Changes in the carrying amount of our goodwill for the three months ended March 31, 2019 were as follows (in thousands):
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Schedule of other intangible assets | Changes in the amount of other intangible assets for the three months ended March 31, 2019 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, 2018 is as follows (in thousands):
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Schedule of intangible asset impairment charges including goodwill | During the three months ended March 31, 2019 and 2018, the Company incurred the following goodwill and other intangible asset impairment charges (in thousands):
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Contract Assets and Liabilities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts payable and accrued liabilities | Accounts payable and accrued expenses include the following at March 31, 2019 and December 31, 2018 (in thousands):
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt instruments | The following table presents information about the Company’s total indebtedness at March 31, 2019 and December 31, 2018 (dollars in thousands):
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Schedule of maturities of long-term debt | The following table presents the maturities on our long-term debt for each of the five fiscal years subsequent to December 31, 2018 (in thousands):
__________
|
Commitments And Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 balances during the three months ended March 31, 2019 (in thousands):
__________
|
Shareholders' Deficit (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in stockholders' equity | The following table presents a reconciliation of the beginning and ending balances in Total shareholders' deficit for the three months ended March 31, 2019 (in thousands):
__________
The following table presents a reconciliation of the beginning and ending balances in Total shareholders' equity (deficit) for the three months ended March 31, 2018 (in thousands):
__________
|
Other Expense (Income), Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Component of Operating Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of other income, net | The components of Other expense (income), net for the three months ended March 31, 2019 and 2018 are as follows (in thousands):
|
Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of of components of income tax expense (benefit) | The following table displays our Loss from continuing operations before income tax, Income tax expense and Effective tax rate for the three months ended March 31, 2019 and 2018 (dollars in thousands):
|
Net Loss Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 months ended March 31, 2019 and 2018 (in thousands):
|
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jan. 01, 2019 |
Jan. 01, 2018 |
---|---|---|---|
Product Information [Line Items] | |||
Operating lease, right-of-use asset | $ 57,771 | ||
Current operating lease liabilities | 12,051 | ||
Noncurrent operating lease liabilities | $ 54,258 | ||
Effect of adopting accounting principle in period of adoption | $ 4,646 | $ (3,076) | |
ASC 842 | |||
Product Information [Line Items] | |||
Operating lease, right-of-use asset | 59,400 | ||
Current operating lease liabilities | 11,000 | ||
Noncurrent operating lease liabilities | 57,300 | ||
Accumulated Deficit | |||
Product Information [Line Items] | |||
Effect of adopting accounting principle in period of adoption | 4,646 | $ (3,076) | |
Accumulated Deficit | ASC 842 | |||
Product Information [Line Items] | |||
Effect of adopting accounting principle in period of adoption | $ 4,600 |
Discontinued Operations - Astora - Discontinued Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Discontinued operations, net of tax | $ (5,961) | $ (7,751) |
Discontinued operations, disposed of by means other than sale, abandonment | Astora | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Loss from discontinued operations before income taxes | (5,961) | (7,751) |
Income tax benefit | 0 | 0 |
Discontinued operations, net of tax | $ (5,961) | $ (7,751) |
Discontinued Operations - Astora (Narrative) (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Restructuring Cost and Reserve [Line Items] | ||
Loss from discontinued operations, net of tax | $ (5,961,000) | $ (7,751,000) |
Discontinued operations, disposed of by means other than sale, abandonment | Astora | ||
Restructuring Cost and Reserve [Line Items] | ||
Loss from discontinued operations, net of tax | (5,961,000) | (7,751,000) |
Cash used in investing activities | 0 | 0 |
Depreciation and amortization | $ 0 | $ 0 |
Restructuring - Schedule of Restructuring Roll Forward (Details) - 2017 US generic pharmaceuticals restructuring $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Beginning liability balance | $ 4,287 |
Cash distributions | (2,875) |
Ending liability balance | 1,412 |
Employee separation, retention and other benefit-related costs | |
Restructuring Reserve [Roll Forward] | |
Beginning liability balance | 4,239 |
Cash distributions | (2,827) |
Ending liability balance | 1,412 |
Other Restructuring Costs | |
Restructuring Reserve [Roll Forward] | |
Beginning liability balance | 48 |
Cash distributions | (48) |
Ending liability balance | $ 0 |
Fair Value Measurements - Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and cash equivalents, current | $ 332,547 | $ 305,368 |
Restricted cash and cash equivalents, noncurrent | 22,357 | 22,356 |
Restricted cash and cash equivalents | 354,904 | 327,724 |
Vaginal mesh cases | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Settlement funds | $ 327,388 | $ 299,733 |
Fair Value Measurements (Narrative) (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2019
USD ($)
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Goodwill impairment charges | $ 86,000 | $ 391,000 | |
Money market funds | Restricted cash and cash equivalents | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Settlement funds | $ 69,100 | $ 86,900 | |
Discount rate | Minimum | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Discount rate applied | 0.095 | ||
Discount rate | Maximum | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Discount rate applied | 0.150 | ||
Discount rate | Weighted average | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Discount rate applied | 0.117 |
Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 127,622 | $ 122,825 |
Work-in-process | 84,801 | 70,458 |
Finished goods | 118,968 | 128,896 |
Total | 331,391 | 322,179 |
Long-term inventory | 9,900 | 8,100 |
Inventories not yet available for sale | $ 10,500 | $ 12,500 |
Leases - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2019
renewal_options
| |
Leases [Abstract] | |
Lessee, operating lease, number of renewal options | 3 |
Lessee. operating lease, renewal term | 60 months |
Leases - Assets and Liabilities (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
ROU assets: | |
Operating lease ROU assets | $ 57,771 |
Finance lease ROU assets | 57,935 |
Total ROU assets | 115,706 |
Operating lease liabilities: | |
Current operating lease liabilities | 12,051 |
Noncurrent operating lease liabilities | 54,258 |
Total operating lease liabilities | 66,309 |
Finance lease liabilities: | |
Current finance lease liabilities | 5,105 |
Noncurrent finance lease liabilities | 33,979 |
Total finance lease liabilities | $ 39,084 |
Leases - Components of Lease Expense (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Leases [Abstract] | |
Operating lease cost | $ 3,499 |
Finance lease cost: | |
Amortization of ROU assets | 2,296 |
Interest on lease liabilities | 500 |
Other lease costs and income: | |
Variable lease costs | 2,089 |
Sublease income | (964) |
Cost of revenues | |
Lessee, Lease, Description [Line Items] | |
Lease, cost | 2,700 |
Selling, general and administrative expenses | |
Lessee, Lease, Description [Line Items] | |
Lease, cost | 4,100 |
Research and development expenses | |
Lessee, Lease, Description [Line Items] | |
Lease, cost | $ 100 |
Leases - Maturities of Operating and Finance Lease Liabilities (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Operating Leases | |
2019, excluding amounts already paid | $ 11,135 |
2020 | 13,667 |
2021 | 13,021 |
2022 | 12,309 |
2023 | 9,890 |
Thereafter | 20,622 |
Total future lease payments | 80,644 |
Less: amount representing interest | 14,335 |
Total operating lease liabilities | 66,309 |
Finance Leases | |
2019, excluding amounts already paid | 5,240 |
2020 | 7,329 |
2021 | 7,476 |
2022 | 7,626 |
2023 | 7,780 |
Thereafter | 10,521 |
Total future lease payments | 45,972 |
Less: amount representing interest | 6,888 |
Total finance lease liabilities | $ 39,084 |
Leases - Weighted Average Term Lease and Discount Rates (Details) |
Mar. 31, 2019 |
---|---|
Weighted average remaining lease term (years), weighted based on lease liability balances: | |
Operating leases | 6 years 6 months |
Finance leases | 6 years 2 months 12 days |
Weighted average discount rate (percentages), weighted based on the remaining balance of lease payments: | |
Operating leases | 5.80% |
Finance leases | 5.10% |
Leases - Cash Flow and Supplemental Noncash Information (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash payments for operating leases | $ 3,692 |
Operating cash payments for finance leases | 473 |
Financing cash payments for finance leases | 1,174 |
Lease liabilities arising from obtaining right-of-use assets: | |
Operating leases | 0 |
Finance leases | $ 0 |
Leases - Future Minimum Lease Payment Obligations Under Operating and Capital Leases (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Capital Leases | |
2019 | $ 6,884 |
2020 | 6,819 |
2021 | 6,921 |
2022 | 7,072 |
2023 | 7,225 |
Thereafter | 9,127 |
Total minimum lease payments | 44,048 |
Less: Amount representing interest | 4,084 |
Total present value of minimum payments | 39,964 |
Less: Current portion of such obligations | 5,845 |
Long-term capital lease obligations | 34,119 |
Operating Leases | |
2019 | 15,800 |
2020 | 14,519 |
2021 | 12,883 |
2022 | 12,454 |
2023 | 9,945 |
Thereafter | 20,573 |
Total minimum lease payments | $ 86,174 |
Goodwill And Other Intangibles - Accumulated Impairment (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Goodwill [Line Items] | ||
Accumulated impairment losses | $ 4,399,676 | $ 4,303,767 |
Branded Pharmaceuticals | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | 855,810 | 855,810 |
Sterile Injectables | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | 0 | 0 |
Generic Pharmaceuticals | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | 3,077,549 | 2,991,549 |
International Pharmaceuticals | ||
Goodwill [Line Items] | ||
Accumulated impairment losses | $ 466,317 | $ 456,408 |
Goodwill And Other Intangibles - Other Intangibles (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 145,599 | $ 157,200 |
Goodwill And Other Intangibles - Schedule Of Estimated Amortization Of Intangibles (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 545,757 |
2020 | 461,267 |
2021 | 419,045 |
2022 | 403,142 |
2023 | $ 372,939 |
Goodwill And Other Intangibles - Schedule of Intangible Asset Impairment Charges Including Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment charges | $ 86,000 | $ 391,000 |
Other intangible asset impairment charges | $ 78,700 | $ 54,200 |
Goodwill And Other Intangibles - Impairments Narrative (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2019
USD ($)
|
Mar. 31, 2018
USD ($)
|
|
Goodwill [Line Items] | ||
Goodwill impairment charges | $ 86,000,000 | $ 391,000,000 |
Generic Pharmaceuticals | ||
Goodwill [Line Items] | ||
Goodwill impairment charges | 86,000,000 | |
Generic Pharmaceuticals | ||
Goodwill [Line Items] | ||
Goodwill impairment charges | $ 86,000,000 | 391,000,000 |
Generic Pharmaceuticals | Discount rate | ||
Goodwill [Line Items] | ||
Intangible assets and goodwill, measurement input | 0.105 | |
Former U.S generic pharmaceuticals | ||
Goodwill [Line Items] | ||
Goodwill impairment charges | 0 | |
Sterile injectables | ||
Goodwill [Line Items] | ||
Goodwill impairment charges | $ 0 |
Contract Assets and Liabilities - Contract Assets and Contract Liabilities from Contracts with Customers (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Contract with Customer, Asset and Liability [Abstract] | ||
Contract assets, net | $ 9,406 | $ 12,065 |
Contract assets, net - $ change | $ (2,659) | |
Contract assets, net - % change | (22.00%) | |
Contract liabilities, net | $ 22,756 | 19,217 |
Contract liabilities, net - $ change | $ 3,539 | |
Contract liabilities, net - % change | 18.00% | |
Contract asset amounts classified as current | $ 9,400 | 9,300 |
Contract liability amounts classified as current | 2,800 | $ 1,700 |
Increase in contract liability | 4,000 | |
Revenue recognized | $ 500 |
Contract Assets and Liabilities - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Contract with Customer, Asset and Liability [Abstract] | |
Performance obligation satisfied in previous period | $ 10.1 |
Accounts Payable And Accrued Expenses (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Trade accounts payable | $ 97,592 | $ 96,024 |
Returns and allowances | 223,156 | 236,946 |
Rebates | 118,658 | 144,860 |
Chargebacks | 2,481 | 2,971 |
Accrued interest | 45,351 | 130,182 |
Accrued payroll and related benefits | 45,037 | 89,895 |
Accrued royalties and other distribution partner payables | 103,649 | 122,028 |
Acquisition-related contingent consideration—current | 28,305 | 36,514 |
Other | 176,601 | 149,780 |
Total | $ 840,830 | $ 1,009,200 |
Debt (Credit Facility) (Narrative) (Details) - Revolving credit facility |
Mar. 31, 2019
USD ($)
|
---|---|
Line of Credit Facility [Line Items] | |
Credit facility, remaining borrowing capacity | $ 996,800,000 |
2017 credit agreement | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 1,000,000,000.0 |
Debt (Maturities On Long-Term Debt For Each Of The Next Five Years) (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Apr. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Maturities | |||
2019 | $ 34,150 | ||
2020 | 34,150 | ||
2021 | 34,150 | ||
2022 | 226,713 | ||
2023 | $ 1,684,430 | ||
Senior notes | Senior notes maturing due 2022 | |||
Maturities | |||
Long-term debt, maturity repayment deadline | 91 days | ||
Subsequent event | Senior notes | Senior notes maturing due 2022 | |||
Maturities | |||
Extinguishment of debt | $ 1,800 |
Commitments And Contingencies - Schedule of Loss Contingencies (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Qualified Settlement Funds | ||
Cash contributions to Qualified Settlement Funds | $ 81,582 | $ 66,108 |
Mesh Liability Accrual | ||
Ending balance | 861,300 | |
Vaginal mesh cases | ||
Qualified Settlement Funds | ||
Beginning balance | 299,733 | |
Cash contributions to Qualified Settlement Funds | 81,582 | |
Cash distributions to settle disputes from Qualified Settlement Funds | (54,984) | |
Other | 1,057 | |
Ending balance | 327,388 | |
Mesh Liability Accrual | ||
Other | 1,057 | |
Vaginal mesh cases | Mesh product liability accrual | ||
Qualified Settlement Funds | ||
Other | 1,057 | |
Mesh Liability Accrual | ||
Beginning balance | 748,606 | |
Cash distributions to settle disputes from Qualified Settlement Funds | (54,984) | |
Cash distributions to settle disputes | (10,239) | |
Other | 1,057 | |
Ending balance | $ 684,440 |
Other Comprehensive Income (Loss) Other Comprehensive Income (Loss) - Narrative (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Equity [Abstract] | ||
Other comprehensive income (loss), tax, portion attributable to parent | $ 0 | $ 0 |
Shareholders' (Deficit) Equity (Narrative) (Details) - USD ($) $ in Thousands, shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation related to share-based awards | $ 24,733 | $ 17,890 |
Share-based compensation awards | 88,400 | |
Additional Paid-in Capital | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation related to share-based awards | $ 24,733 | $ 17,890 |
Nonvested Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service period | 1 year 6 months | |
Nonvested Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service period | 2 years 2 months 12 days | |
Plan | Performance Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Target amount of share-based compensation awards (in shares) | 0.2 |
Other Expense (Income), Net (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Component of Operating Income [Abstract] | ||
Net loss (gain) on sale of business and other assets | $ 1,294 | $ (2,416) |
Foreign currency loss (gain), net | 1,716 | (2,085) |
Net loss from our investments in the equity of other companies | 2,086 | 2,626 |
Other miscellaneous, net | (294) | (1,003) |
Other expense (income), net | $ 4,802 | $ (2,878) |
Income Taxes (Schedule of Components of Continuing Operations Before Income Tax, Income Tax Expense, Effective Tax Rate (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Loss from continuing operations before income tax | $ (1,709) | $ (482,247) |
Income tax expense | $ 10,903 | $ 15,491 |
Effective tax rate | (638.00%) | (3.20%) |
Net Loss Per Share (Reconciliation Of The Numerator And Denominator Of Basic And Diluted Net Loss Per Share) (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Numerator: | ||
Loss from continuing operations | $ (12,612) | $ (497,738) |
Loss from discontinued operations, net of tax | (5,961) | (7,751) |
NET LOSS | $ (18,573) | $ (505,489) |
Denominator: | ||
For basic per share data—weighted average shares (shares) | 224,594 | 223,521 |
Dilutive effect of ordinary share equivalents (shares) | 0 | 0 |
For diluted per share data—weighted average shares (shares) | 224,594 | 223,521 |
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