þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 01-0355758 | |
(State or other jurisdiction | (I.R.S. Employer Identification No.) | |
of incorporation or organization) | ||
105 Lincoln Ave., Buena, NJ | 08310 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $0.01 Par Value Per Share | The NASDAQ Stock Market |
• | Developing, manufacturing and marketing a portfolio of generic pharmaceutical products in our own label in topical, injectable, complex and ophthalmic dosage forms; and |
• | Managing our current contract manufacturing and formulation services business. |
Product | Formulation | Presentations | Brand equivalent | Therapeutic Classification |
Betamethasone Dipropionate (Augmented), 0.05% | Ointment | 15g, 50g | DIPROLENE® | Topical Corticosteroid |
Betamethasone Dipropionate (Augmented), 0.05% | Lotion | 30mL, 60mL | DIPROLENE® | Topical Corticosteroid |
Clindamycin Phosphate 1% | Topical Solution | 30mL, 60mL | Cleocin® | Topical Anti-infective |
Clobetasol 0.05% | Lotion | 2oz, 4oz | Clobetasol | Topical Corticosteroid |
Clobetasol Propionate 0.05% | Gel | 15g, 30g, 60g | Embeline® | Topical Corticosteroid |
Clobetasol Propionate Emollient 0.05% | Cream | 15g, 30g, 45g, 60g | TemovateE® | Topical Corticosteroid |
Desoximetasone 0.25% | Ointment | 15g, 60g, 100g | Topicort® | Topical Corticosteroid |
Diclofenac Sodium 1.5% | Topical Solution | 150mL | Pennsaid® | Topical Anti-inflammatory |
Econazole Nitrate 1% | Cream | 15g, 30g, 85g | Spectazole® | Topical Anti-fungal |
Erythromycin 2% | Gel | 30g, 60g | Erygel® | Topical Corticosteroid |
Erythromycin 2% | Topical Solution | 60 mL | Erythromycin Topical Solution 2% | Topical Corticosteroid |
Fluocinolone Acetonide 0.01% | Topical Solution | 60mL | Synalar® | Topical Corticosteroid |
Fluocinolone Acetonide 0.01% | Cream | 15g, 60g | Synalar® | Topical Corticosteroid |
Fluocinolone Acetonide 0.025% | Ointment | 15g, 60g | Synalar® | Topical Corticosteroid |
Fluocinolone Acetonide 0.025% | Cream | 15g, 60g | Synalar® | Topical Corticosteroid |
Flurandrenolide 0.05% | Ointment | 15g, 30g, 60g | Cordran® | Topical Corticosteroid |
Hydrocortisone Butyrate 0.1% | Lotion | 118mL, 59 mL | Locoid® | Topical Corticosteroid |
Lidocaine 4% | Topical Solution | 50mL | Xylocaine® | Topical Anesthetic |
Lidocaine 5% | Ointment | 35.44g | Xylocaine® | Topical Anesthetic |
Nystatin/Triam 100,000 Nystatin units/1mg per gram | Ointment | 15g, 30g, 60g | Mykacet® | Topical Anti-fungal |
Triamcinolone Acetonide 0.025% | Lotion | 60ml | Triamcinolone Acetonide | Topical Corticosteroid |
Triamcinolone Acetonide 0.1% | Ointment | 15g, 80g, 1lb jar | Kenalog® | Topical Corticosteroid |
Triamcinolone Acetonide 0.1% | Lotion | 60mL | Triamcinolone Acetonide | Topical Corticosteroid |
Triamcinolone Acetonide 0.1% | Cream | 15g, 30g, 80g | Kenalog® | Topical Corticosteroid |
Triamcinolone Acetonide 0.5% | Ointment | 15g | Kenalog® | Topical Corticosteroid |
Product | Strength | Formulation | Presentations | Dossier type held by Teligent | Therapeutic Classification |
Cefotan (Cefotetan) ® | 1g, 2g | Injectable | Vial | NDA | Antibacterial for systemic use |
Fortaz (Ceftazidime) ® | 500mg, 1g, 2g, 6g | Injectable | Vial, Twist Vial, Frozen Bag | NDA | Antibacterial for systemic use |
Zantac (Ranitidine) ® | 25mg/ml | Injectable | 2ml, 6ml, 40ml Vials | NDA | Drugs for peptic ulcer and gastro-oesophageal related disorders (GORD) |
Zinacef (Cefuroxime) ™ | 750mg, 1.5g, 7.5g | Injectable | Vial, Twist Vial | NDA | Antibacterial for systemic use |
Product | Strength | Formulation | Presentations | Brand equivalent | Dossier type held by Teligent | Therapeutic Classification |
Acetylcysteine | 200 mg/ml | Injectable | 10ml and 30 ml vials | Mucomyst® Parvolex® | ANDS | Antidote |
Atropine | 0.4 mg/ml, 0.6 mg/ml | Injectable | 1 ml vials | N/A | DINA | Antimuscarnic, antispasmodic |
Baclofen | 0.05 mg/ml, 0.5mg/ml, 2mg/ml | Injectable | 1mL, 5mL, 20mL ampoules | Lioresal® | ANDS | Muscle Relaxant |
Ibuprofen for Intravenous Infusion | 100 mg/ml | Injectable | 8 ml vial | Caldolor® | NDS | Nonsteroidal Antiinflammatory Agent |
Cyanocobalamin (2) | 1000 mcg/ml | Injectable | 1 mL ampoule, 10 ml vial | N/A | DINA | Hematopoietic |
Diazepam | 5 mg/mL | Injectable | 2mL ampoules | Valium® | ANDS | Benzodiazepine |
Dimenhydrinate | 50 mg, 250 mg | Injectable | 1 ml ampoule, 5 ml vial | Gravol® | DINA | Antihistamine |
Dobutamine (2) | 12.5 mg/ml | Injectable | 20 mL vial | N/A | ANDS | Sympathomimetic |
Epinephrine | 1 mg/ml | Injectable | 1 ml ampoule | Adrenalin® | DINA | Cardiac Stimulant |
Ergonovine Maleate | 0.25 mg/ml | Injectable | 1 ml ampoule | N/A | DINA | Oxytocic |
Fentanyl | 50 mcg/mL | Injectable | 2mL ampoule | Sublimaze® | ANDS | Opiate Anesthetic |
Furosemide | 10 mg/ml | Injectable | 2 ml ampoule | Lasix® | ANDS | Diuretic |
Gemcitabine | 10 mg, 200 mg, 1 g | Injectable | 10 mg, 200 mg, 1 g vials | Gemzar® | ANDS | Antineoplastic agent |
Gentamicin (2) | 10 mg/ml, 40 mg/ml | Injectable | 2mL ampoule | Garamycin® | ANDS | Antibiotic |
Irinotecan Hydrochloride | 20 mg/ml | Injectable | 2 ml, 5 ml, 25 ml vials | Camptosar® | ANDS | Antineoplastic agent |
Lidocaine 1% | 10 mg/mL | Injectable | 5 ml and 10 ml polyampoule | Xylocaine® | DINA | Local Anesthetic |
Lidocaine 1% | 10 mg/ml | Injectable | 20 ml and 50 ml vials | Xylocaine® | DINA | Local Anesthetic |
Lidocaine 2% | 20 mg/ml | Injectable | 5 ml and 10 ml polyampoule | Xylocaine® | DINA | Local Anesthetic |
Lidocaine 2% | 20 mg/ml | Injectable | 20 ml and 50 ml vials | Xylocaine® | DINA | Local Anesthetic |
Lidocaine 2% with epinephrine | 20 mg/ml & 0.01 mg/mL | Injectable | 20 ml and 50 ml vials | Xylocaine® | DINA | Local Anesthetic |
Lidocaine Hydrochloride Topical Solution USP 4% | 40 mg/ml | Topical Solution | 50mL | Xylocaine® | DINA | Topical Anesthetic |
Lidocaine Ointment USP 5% | 50 mg/g | Ointment | 35g | Xylocaine® | DINA | Topical Anesthetic |
Methylene Blue | 10 mg/mL | Injectable | 5mL ampoule | N/A | DINA | Antidote |
Naloxone | 0.4mg / ml | Injectable | 1mL ampoule | Narcan | ANDS | Opitate Antagonist |
Piperacillin and Tazobactam | 2g, 0.25 g, 3 g, 0.375 g, 4 g, 0.5 g | Injectable | 2.25 g, 3.375 g, 4.5 g vials | Tazocin® | ANDS | Antibacterial for systemic use |
Sodium Cloride | 0.9% | Injectable | 10 ml vials | N/A | DINA | Diluent |
Sterile Water for Injection | 100% | Injectable | 10 ml polyampoule | N/A | DINA | Diluent |
Succinylcholine Chloride | 20 mg/mL | Injectable | 10 ml and 20 ml vials | Quelicin® | DINA | Muscle Relaxant |
Product | Strength | Formulation | Presentations | Brand equivalent | Dossier type held by Teligent | Therapeutic Classification |
Ciprofloxacin | 0.3% | Ophthalmic Solution | 2.5ml, 5ml, 10ml bottles | Ciloxan ® | ANDA | Antibacterial for systemic use |
Betaxolol | 0.5% | Ophthalmic Solution | 5ml, 7.5ml, 15ml bottles | Betopic ® | ANDA | Beta Blocking Agent |
Phytonadione | 10mg, 1mg | Injectable | 0.5ml, 1ml ampoules; 3cc, 6cc vials | AquaMephyton ® | NDA | Hemostatic |
Amikacin Sulfate | 50mg/ml, 250mg/ml | Injectable | 2ml, 4ml vials | Amikacin Sulfate ® | ANDA | Antibacterial for systemic use |
Calcitonin Salmon | 200IU/ml | Injectable | 2ml vials | Miacalcin ® | ANDA | Anti-parathyroid Agent |
Cefotetan Disodium | 20mg/ml | Injectable (bag) | 50ml bags | Cefotetan ® | NDA | Antibacterial for systemic use |
Clindamycin Phosphate | 150mg/ml | Injectable | 2ml, 4ml, 6ml, 60ml vials | Cleocin ® | ANDA | Antibacterial for systemic use |
Dobutamine HCl | 12.5mg/ml | Injectable | 20ml, 40ml vials | Dobutamine HCl ® | ANDA | Cardiac Stimulant |
Dopamine HCl | 40mg/ml | Injectable | 5ml, 10ml (vials and syringes) | Dopamine HCl ® | NDA / ANDA | Cardiac Stimulant |
Dopamine HCl | 80mg/ml | Injectable | 5ml, 10ml (vials, ampoules, and syringes) | Dopamine HCl ® | NDA / ANDA | Cardiac Stimulant |
Dopamine HCl | 160mg/ml | Injectable | 5ml (vials and ampoules) | Dopamine HCl ® | NDA / ANDA | Cardiac Stimulant |
Droperidol | 2.5mg/ml | Injectable | 10ml vials, 2ml and 5ml ampoules, and 2ml syringes | Inapsine ® | ANDA | Anti-Psychotic |
Furosemide | 10mg/ml | Injectable | 2ml, 4ml, 8ml, and 10ml vials, 4ml and 10ml syringes | Furosemide ® | ANDA | Diuretic |
Mannitol | USP 25% | Injectable | 50ml (vials and syringes) | Mannitol ® | ANDA | Diuretic |
Meperidine HCl | 25mg/ml, 50mg/ml, 75mg/ml, 100mg/ml | Injectable | 1ml and 30ml vials, 1ml and 1.5ml ampoules, and 1ml syringes | Demerol ® | ANDA | Systemic analgesic |
Midazolam HCl | 5mg/ml | Injectable | 2ml syringe | Midazolam ® | ANDA | Sedative |
Orphenadrine | 30 mg/mL | Injectable | 2 mL ampule | Orphenadrine Citrate | ANDA | Muscle Relaxant |
Edrophonium | 10 mg/mL | Injectable | 1 mL ampule and 10 mL vial | Enlon® | NDA | Acetylcholinesterase inhibitor |
MVI-12 | N/A | Injectable | 10 mL ampules and 5 mL vials | N/A | NDA | Systemic multivitamin |
Naloxone HCl | 0.4 mg/mL, 1 mg/mL | Injectable | 1 mL 5 mLand 10 mL vials | N/A | ANDA | Opitate Antagonist |
Naloxone HCl (preservative free) | 0.4 mg/mL | Injectable | 1 mL vials | N/A | ANDA | Opitate Antagonist |
Tobramycin Sulfate | 10 mg/mL, 40 mg/mL | Injectable | 2 mLand 35 mL vials | N/A | ANDA | Antibacterial for systemic use |
Nalbuphine | 10 mg/mL and 20 mg/mL | Injectable | 1 mL and 10 mL vials | Nubain® | ANDA | Systemic analgesic |
• | New Drug Application — An NDA is filed when approval is sought to market a newly developed branded product and, in certain instances, for a new dosage form, a new delivery system or a new indication for a previously approved drug. |
• | Abbreviated New Drug Application — An ANDA is filed when approval is sought to market a generic equivalent of a drug product previously approved under an NDA and listed in the FDA’s Orange Book or for a new dosage strength for a drug previously approved under an ANDA. |
• | Safety – Ensure that industry participants, foreign or domestic, are held to consistent quality standards and are inspected with parity using a risk-based approach. |
• | Access – Expedite the availability of generic drugs by bringing greater predictability to the review times for abbreviated new drug applications, amendments and supplements and improving timeliness in the review process. |
• | Transparency – Enhance FDA’s visibility into the complex global supply environment by requiring the identification of facilities involved in the manufacture of generic drugs and associated APIs, and improve FDA’s communications and feedback with industry. |
• | the original manufacturers of the brand-name equivalents of our generic products; and |
• | other generic drug manufacturers. |
• | pursuing new patents for existing products that may be granted just before the expiration of earlier patents, which could extend patent protection for additional years or otherwise delay the launch of generics; |
• | selling the brand product as an “authorized generic,” either by the brand company directly, through an affiliate or by a marketing partner; |
• | using the Citizen Petition process to request amendments to FDA standards or otherwise delay generic drug approvals; |
• | seeking changes to the U.S. Pharmacopeia, an FDA, and industry recognized compendia of drug standards; |
• | attaching patent extension amendments to non-related federal legislation; |
• | engaging in state-by-state initiatives to enact legislation that restricts the substitution of some generic drugs, which could have an impact on products that we are developing; and |
• | seeking patents on methods of manufacturing certain active pharmaceutical ingredients. |
• | the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs, such as Medicare and Medicaid. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; |
• | the federal False Claims Act, or FCA, which imposes civil liability and criminal fines on individuals or entities that knowingly submit, or cause to be submitted, false or fraudulent claims for payment to the government. The FCA also allows private individuals to bring a suit on behalf of the government against an individual or entity for violations of the FCA. These suits, also known as qui tam actions, may be brought by, with only a few exceptions, any private citizen who believes that he has material information of a false claim that has not yet been previously disclosed. These suits have increased significantly in recent years because the FCA allows an individual to share in any amounts paid to the federal government in fines or settlement as a result of a successful qui tam action; |
• | federal criminal laws that prohibit executing a scheme to defraud any federal healthcare benefit program or making false statements relating to healthcare matters; |
• | the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and applicable manufacturers and group purchasing organizations to report annually ownership and investment interests held by physicians (as defined above) and their immediate family members and payments or other “transfers of value” to such physician owners and their immediate family members; |
• | the Federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; |
• | the Foreign Corrupt Practices Act (FCPA) including its anti-bribery provisions, which make it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business; and |
• | analogous state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require |
• | the availability of alternative products from our competitors; |
• | the price of our products relative to that of our competitors; |
• | the timing of our market entry; |
• | the ability to market our products effectively to the different levels in the distribution chain; |
• | other competitor actions; and |
• | the continued acceptance of and/or reimbursement for our products by government and private formularies and/or third party payors. |
• | the pending patent applications we have filed or may file, or to which we have exclusive rights, may not result in issued patents, or may take longer than we expect to result in issued patents; |
• | changes in U.S. patent laws may adversely affect our ability to obtain or maintain our patent protection; |
• | we may be subject to interference proceedings; |
• | the claims of any patents that are issued may not provide meaningful protection; |
• | we may not be able to develop additional proprietary technologies that are patentable; |
• | the patents licensed or issued to us or our collaborators may not provide a competitive advantage; |
• | other companies may challenge patents licensed or issued to us or our collaborators; |
• | other companies may independently develop similar or alternative technologies, or duplicate our technology; |
• | other companies may design around technologies we have licensed or developed; and |
• | enforcement of patents is complex, uncertain and expensive. |
• | pay damages in the form of lost profits and/or a reasonable royalty for any infringement; |
• | pay substantial damages (potentially treble damages in the U.S. if any such infringement is found to be willful); |
• | pay attorney fees of a prevailing party, if the case is found to be exceptional; |
• | cease the manufacture, use or sale of the infringing offerings or processes; |
• | discontinue the use of the infringing technology; |
• | expend significant resources to design around patented technology and develop non-infringing technology; and |
• | license patented technology from the third party claiming infringement, which license may not be available on commercially reasonable terms, or may not be available at all. |
• | additional costs that we may need to incur in order to return the products to the market and to comply with regulatory requirements; |
• | difficulties in coordinating research and development activities; |
• | uncertainties in the business relationships with our customers and suppliers; and |
• | lack of previous experiences in manufacturing, commercializing, and distributing products in therapeutic areas outside of the topical generic pharmaceutical market and in markets outside of the United States. |
• | the availability of alternative products from our competitors; |
• | the price of our products relative to that of our competitors; |
• | the effectiveness of our marketing relative to that of our competitors; |
• | the timing of our market entry; |
• | the ability to market our products effectively to the retail level; and |
• | the acceptance of our products by government and private formularies. |
• | diversion of management time and focus from operating our business to addressing acquisition and/or product integration challenges; |
• | coordination of research and development and sales and marketing functions; |
• | retention of key employees from the acquired company; |
• | integration of the acquired company’s accounting, management information, human resources and other administrative systems; |
• | the need to implement or improve controls, procedures, and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies; |
• | liability for activities of the acquired company and/or products before the acquisition, including patent infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; |
• | unanticipated write-offs or charges; and |
• | litigation or other claims in connection with the acquired company or product, including claims from product users, former stockholders or other third parties. |
• | publicity regarding actual or potential clinical results relating to products under development by our competitors or us; |
• | delay or failure in initiating, completing or analyzing nonclinical or clinical trials or the unsatisfactory design or results of these trials; |
• | achievement or rejection of regulatory approvals by our competitors or us; |
• | announcements of technological innovations or new commercial products by our competitors or us; |
• | developments concerning proprietary rights, including patents; |
• | developments concerning our collaborations; |
• | regulatory developments in the U.S. and foreign countries; |
• | economic or other crises in the markets in which we compete, and other external factors; |
• | stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in the cosmetic, pharmaceutical and consumer products industry; |
• | actual or anticipated sales of our common stock, including sales by our directors, officers or significant stockholders; |
• | period-to-period fluctuations in our revenues and other results of operations; and |
• | speculation about our business in the press or the investment community. |
• | make it difficult for us to satisfy our obligations with respect to our outstanding and other future debt obligations; |
• | increase our vulnerability to general adverse economic conditions or a downturn in the industries in which we operate; |
• | impair our ability to obtain additional financing in the future for working capital, investments, acquisitions and other general corporate purposes; |
• | require us to dedicate a substantial portion of our cash flows to the payment to our financing sources, thereby reducing the availability of our cash flows to fund working capital, investments, acquisitions and other general corporate purposes; and |
• | place us at a disadvantage compared to our competitors. |
Common Stock | ||||||
High | Low | |||||
2016 | ||||||
First Quarter | 8.88 | 4.46 | ||||
Second Quarter | 7.39 | 4.79 | ||||
Third Quarter | 8.66 | 6.96 | ||||
Fourth Quarter | 7.99 | 5.75 | ||||
2017 | ||||||
First Quarter | 8.30 | 6.46 | ||||
Second Quarter | 9.54 | 7.60 | ||||
Third Quarter | 9.27 | 5.97 | ||||
Fourth Quarter | 7.34 | 2.82 |
As of and For the Years Ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Revenues | $ | 67,251 | $ | 66,881 | $ | 44,250 | $ | 33,740 | $ | 18,224 | ||||||||||
Gross profit | 27,372 | 34,687 | 21,315 | 16,972 | 6,145 | |||||||||||||||
Operating income (loss) | (11,797 | ) | 2,542 | (3,192 | ) | 3,906 | (82 | ) | ||||||||||||
Interest and other non-operating income (expense) | (3,479 | ) | (14,240 | ) | 9,895 | 1,518 | (199 | ) | ||||||||||||
Foreign currency exchange gain (loss) | 7,719 | (936 | ) | 109 | — | — | ||||||||||||||
Pretax income (loss) | (15,276 | ) | (11,698 | ) | 6,703 | 5,424 | (281 | ) | ||||||||||||
Income tax provision (benefit) | (85 | ) | 287 | 35 | 173 | (197 | ) | |||||||||||||
Net income (loss) | $ | (15,191 | ) | $ | (11,985 | ) | $ | 6,668 | $ | 5,251 | $ | (84 | ) | |||||||
Preferred stock dividend | — | — | — | — | (1,308 | ) | ||||||||||||||
Net income (loss) attributable to common stockholders | $ | (15,191 | ) | $ | (11,985 | ) | $ | 6,668 | $ | 5,251 | (1,392 | ) | ||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 53,324 | 53,078 | 52,873 | 49,818 | 43,518 | |||||||||||||||
Diluted | 53,324 | 53,078 | 67,112 | 64,207 | 43,518 | |||||||||||||||
PER SHARE: | ||||||||||||||||||||
Net income (loss): | ||||||||||||||||||||
Basic | (0.28 | ) | (0.23 | ) | 0.13 | 0.11 | (0.03 | ) | ||||||||||||
Diluted | (0.28 | ) | (0.23 | ) | (0.07 | ) | 0.09 | (0.03 | ) | |||||||||||
BALANCE SHEET DATA: | ||||||||||||||||||||
Current assets | $ | 64,532 | $ | 103,296 | $ | 116,801 | $ | 177,218 | $ | 10,558 | ||||||||||
Net property, plant & equipment | 68,355 | 26,215 | 8,706 | 3,262 | 2,623 | |||||||||||||||
Total assets | 189,986 | 183,226 | 184,762 | 197,078 | 15,427 | |||||||||||||||
Current liabilities | 24,097 | 14,963 | 10,768 | 13,002 | 5,221 | |||||||||||||||
Long-term obligations, less current installments | 121,136 | 111,596 | 107,235 | 144,942 | 3,015 | |||||||||||||||
Shareholders’ equity | 44,753 | 56,667 | 66,759 | 39,134 | 7,191 | |||||||||||||||
CASH FLOW DATA: | ||||||||||||||||||||
Cash provided by (used in) operating activities | $ | 400 | $ | (798 | ) | $ | (15,513 | ) | $ | (3,891 | ) | $ | (618 | ) | ||||||
Cash used in investing activities | (40,429 | ) | (20,076 | ) | (53,068 | ) | (3,792 | ) | (2,113 | ) | ||||||||||
Cash provided by (used in) financing activities | 269 | (10 | ) | (3,111 | ) | 164,465 | 2,296 | |||||||||||||
Increase/(Decrease) in cash and cash equivalents | (39,760 | ) | (20,884 | ) | (71,692 | ) | 156,782 | (435 | ) |
• | Developing, manufacturing and marketing a portfolio of generic pharmaceutical products in our own label in topical, injectable, complex and ophthalmic dosage forms; and |
• | Managing our current contract manufacturing and formulation services business. |
Year Ended December 31, | Increase/(Decrease) | ||||||||||||||
Components of Revenue: | 2017 | 2016 | $ | % | |||||||||||
Product sales, net | $ | 66,999 | $ | 65,904 | $ | 1,095 | 2 | % | |||||||
Research and development services and other income | 252 | 977 | (725 | ) | (74 | )% | |||||||||
Total Revenues | $ | 67,251 | $ | 66,881 | $ | 370 | 1 | % |
Year Ended December 31, | Increase/(Decrease) | ||||||||||||||
2017 | 2016 | $ | % | ||||||||||||
Cost of revenues | $ | 39,879 | $ | 32,194 | $ | 7,685 | 24 | % | |||||||
Selling, general and administrative | 19,904 | 15,005 | 4,899 | 33 | % | ||||||||||
Product development and research | 19,265 | 17,140 | 2,125 | 12 | % | ||||||||||
Totals costs and expenditures | $ | 79,048 | $ | 64,339 | $ | 14,709 | 23 | % |
Year Ended December 31, | Increase/(Decrease) | ||||||||||||||
2017 | 2016 | $ | % | ||||||||||||
Interest and other expense, net | $ | (11,198 | ) | $ | (13,304 | ) | $ | 2,106 | 16 | % | |||||
Foreign exchange (loss) / gain | $ | 7,719 | $ | (936 | ) | $ | 8,655 | 100 | % |
Year Ended December 31, | Increase/(Decrease) | ||||||||||||||
2017 | 2016 | $ | % | ||||||||||||
Net loss attributable to common stockholders | $ | (15,191 | ) | $ | (11,985 | ) | $ | (3,206 | ) | 27 | % | ||||
Basic loss per share | $ | (0.28 | ) | $ | (0.23 | ) | $ | (0.05 | ) | 22 | % | ||||
Diluted loss per share | $ | (0.28 | ) | $ | (0.23 | ) | $ | (0.05 | ) | 22 | % |
Year Ended December 31, | Increase/(Decrease) | ||||||||||||||
Components of Revenue: | 2016 | 2015 | $ | % | |||||||||||
Product sales, net | $ | 65,904 | $ | 43,497 | $ | 22,407 | 52 | % | |||||||
Research and development services and other income | 977 | 753 | 224 | 30 | % | ||||||||||
Total Revenues | $ | 66,881 | $ | 44,250 | $ | 22,631 | 51 | % |
Year Ended December 31, | Increase/(Decrease) | ||||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Cost of revenues | $ | 32,194 | $ | 22,935 | $ | 9,259 | 40 | % | |||||||
Selling, general and administrative | 15,005 | 11,336 | 3,669 | 32 | % | ||||||||||
Product development and research | 17,140 | 13,171 | 3,969 | 30 | % | ||||||||||
Totals costs and expenditures | $ | 64,339 | $ | 47,442 | $ | 16,897 | 36 | % |
Year Ended December 31, | Increase/(Decrease) | ||||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Interest and other expense, net | $ | (13,304 | ) | $ | (13,358 | ) | $ | 54 | — | % | |||||
Foreign exchange (loss) / gain | $ | (936 | ) | $ | 109 | $ | (1,045 | ) | 100 | % | |||||
Change in the fair value of derivative liability | $ | — | $ | 23,144 | $ | (23,144 | ) | (100 | )% |
Year Ended December 31, | Increase/(Decrease) | ||||||||||||||
2016 | 2015 | $ | % | ||||||||||||
Net (loss) income attributable to common stockholders | $ | (11,985 | ) | $ | 6,668 | $ | (18,653 | ) | (280 | )% | |||||
Basic (loss) earnings per share | $ | (0.23 | ) | $ | 0.13 | $ | (0.36 | ) | (277 | )% | |||||
Diluted loss per share | $ | (0.23 | ) | $ | (0.07 | ) | $ | (0.16 | ) | 229 | % |
Payments Due by Period (in thousands) | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | |||||||||||||||
Convertible Senior Notes | $ | 143,750 | $ | — | $ | 143,750 | $ | — | $ | — | ||||||||||
Operating Lease | 2,513 | 491 | 877 | 730 | 415 | |||||||||||||||
Total | $ | 146,263 | $ | 491 | $ | 144,627 | $ | 730 | $ | 415 |
• | The absence of a formal policy to assess the adequacy of the design and operating effectiveness of controls related to the Company’s key ERP third party service provider. |
• | The absence of or breakdown of Information Security, Change Management and System Development Life Cycle controls related to the company’s key financial systems. |
• | Hiring new team members and engaging external resources with significant prior experience with systems similar to the Company's new ERP system to provide additional capacity, analytical and functional capabilities, and cross-training. |
• | Implementing business process improvements, that are anticipated to both strengthen controls governing management review and approvals and enable a more efficient and effective month end close. |
• | Conducting regular reviews of all information system access to validate that access is appropriate and appropriate segregation of duties exist. |
• | Recruiting a new senior leader in one of its foreign affiliates who, among other responsibilities, will ensure customer contract terms are reviewed with key members of the Finance Department on a timely basis to ensure customer price concessions are reflected appropriately in the financial records. |
• | Establishing formal policies and procedures for the accounting and internal audit function. |
• | Developing policies and procedures addressing the internal control framework of the Company’s ERP service provider. |
(a) | The following documents are filed as part of this Annual Report on Form 10-K: |
(a)(1) | See “Index to Consolidated Financial Statements and Financial Statement Schedules” at Item 8 to this Annual Report on Form 10-K. |
(a)(2) | Other financial statement schedules have not been included because they are not applicable or the information is included in the financial statements or notes thereto. |
(a)(3) | The following is a list of exhibits filed as part of this Annual Report on Form 10-K. |
Exhibits | |
(3.1) | |
(3.2) | |
(4.1) | |
(4.2) | |
(10.1)# | |
(10.2)# | |
(10.3)# | |
(10.4)# | |
(10.5)# | |
(10.6)# | |
(10.7)# | |
(10.8)# |
(10.9)# | |
(10.10)# | |
(10.11)+ | |
(10.12) | |
(10.13) | |
(10.14)+ | |
(10.15) | |
(10.16) | |
(10.17) | |
(10.18) | |
(10.19) | |
(10.20)+ | |
(10.21) | |
(10.22) |
(10.23) | |
(10.24) | |
(10.25) | |
(10.26) | |
(10.27) | |
(10.28) | |
(10.29) | |
(10.30)# | |
(10.31)# | |
(10.32)# | |
(21) | |
(23.1)* | |
(31.1)* | |
(31.2)* | |
(32.1)* | |
(101)* | The following financial information from this Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Statements of Operations; (ii) the Consolidated Balance Sheets; (iii) the Consolidated Statements of Cash Flows; and (iv) the Notes to Consolidated Financial Statements, tagged as blocks of text. |
Teligent, Inc. | ||
By: | /s/ Jason Grenfell-Gardner | |
Jason Grenfell-Gardner | ||
President and Chief Executive Officer |
Signature | Title | Date | ||
/s/ Jason Grenfell-Gardner | Director, President and Chief Executive Officer | March 19, 2018 | ||
Jason Grenfell-Gardner | (Principal Executive Officer) | |||
/s/ Damian Finio | Chief Financial Officer | March 19, 2018 | ||
Damian Finio | (Principal Financial Officer) | |||
/s/ Steven Koehler | Director | March 19, 2018 | ||
Steven Koehler | ||||
/s/ James Gale | Director | March 19, 2018 | ||
James Gale | ||||
/s/ Bhaskar Chaudhuri | Director | March 19, 2018 | ||
Bhaskar Chaudhuri | ||||
/s/ John Celentano | Director | March 19, 2018 | ||
John Celentano | ||||
/s/ Carole Ben-Maimon | Director | March 19, 2018 | ||
Carole Ben-Maimon | ||||
/s/ Thomas Sabatino | Director | March 19, 2018 | ||
Thomas Sabatino |
December 31, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 26,692 | $ | 66,006 | ||||
Accounts receivable, net | 18,143 | 21,735 | ||||||
Inventories | 16,075 | 12,708 | ||||||
Prepaid expenses and other receivables | 3,622 | 2,847 | ||||||
Total current assets | 64,532 | 103,296 | ||||||
Property, plant and equipment, net | 68,355 | 26,215 | ||||||
Intangible assets, net | 56,017 | 52,465 | ||||||
Goodwill | 471 | 446 | ||||||
Other | 611 | 804 | ||||||
Total assets | $ | 189,986 | $ | 183,226 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 10,595 | $ | 4,614 | ||||
Accrued expenses | 13,502 | 10,349 | ||||||
Total current liabilities | 24,097 | 14,963 | ||||||
Convertible 3.75% senior notes, net of debt discount and debt issuance costs (face of $143,750) | 120,977 | 111,391 | ||||||
Deferred tax liability | 159 | 205 | ||||||
Total liabilities | 145,233 | 126,559 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $0.01 par value, 100,000,000 shares authorized; 53,400,281 and 53,148,441 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively | 554 | 551 | ||||||
Additional paid-in capital | 106,312 | 102,624 | ||||||
Accumulated deficit | (60,094 | ) | (44,903 | ) | ||||
Accumulated other comprehensive loss, net of taxes | (2,019 | ) | (1,605 | ) | ||||
Total stockholders’ equity | 44,753 | 56,667 | ||||||
Total liabilities and stockholders’ equity | $ | 189,986 | $ | 183,226 |
2017 | 2016 | 2015 | ||||||||||
Components of Revenue: | ||||||||||||
Product sales, net | $ | 66,999 | $ | 65,904 | $ | 43,497 | ||||||
Research and development services and other income | 252 | 977 | 753 | |||||||||
Total revenues | 67,251 | 66,881 | 44,250 | |||||||||
Costs and Expenses: | ||||||||||||
Cost of revenues | 39,879 | 32,194 | 22,935 | |||||||||
Selling, general and administrative expenses | 19,904 | 15,005 | 11,336 | |||||||||
Product development and research expenses | 19,265 | 17,140 | 13,171 | |||||||||
Total costs and expenses | 79,048 | 64,339 | 47,442 | |||||||||
Operating (loss) income | (11,797 | ) | 2,542 | (3,192 | ) | |||||||
Other Income (Expense): | ||||||||||||
Change in the fair value of derivative liability | — | — | 23,144 | |||||||||
Foreign currency exchange gain (loss) | 7,719 | (936 | ) | 109 | ||||||||
Interest and other expense, net | (11,198 | ) | (13,304 | ) | (13,358 | ) | ||||||
(Loss) income before income tax expense | (15,276 | ) | (11,698 | ) | 6,703 | |||||||
Income tax (benefit) expense | (85 | ) | 287 | 35 | ||||||||
Net (loss) income attributable to common stockholders | $ | (15,191 | ) | $ | (11,985 | ) | $ | 6,668 | ||||
Basic (loss) earnings per share | $ | (0.28 | ) | $ | (0.23 | ) | $ | 0.13 | ||||
Diluted (loss) earnings per share | $ | (0.28 | ) | $ | (0.23 | ) | $ | (0.07 | ) | |||
Weighted average shares of common stock outstanding: | ||||||||||||
Basic | 53,323,954 | 53,078,158 | 52,872,814 | |||||||||
Diluted | 53,323,954 | 53,078,158 | 67,111,995 |
2017 | 2016 | 2015 | ||||||||||
Net income (loss) | $ | (15,191 | ) | $ | (11,985 | ) | $ | 6,668 | ||||
Other comprehensive loss, net of tax | ||||||||||||
Foreign currency translation adjustment | (414 | ) | (1,475 | ) | (130 | ) | ||||||
Other comprehensive loss | (414 | ) | (1,475 | ) | (130 | ) | ||||||
Comprehensive income (loss) | $ | (15,605 | ) | $ | (13,460 | ) | $ | 6,538 |
2017 | 2016 | 2015 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | (15,191 | ) | $ | (11,985 | ) | $ | 6,668 | ||||
Reconciliation of net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization of fixed assets | 1,711 | 946 | 560 | |||||||||
Amortization of license fee | — | — | 100 | |||||||||
Provision for write down of inventory | 2,132 | 1,400 | 50 | |||||||||
Provision for bad debt | 1,767 | 327 | — | |||||||||
Issuance of stock to consultant | — | 189 | — | |||||||||
Stock based compensation | 3,295 | 2,999 | 2,273 | |||||||||
Amortization of debt issuance costs | 943 | 828 | 1,132 | |||||||||
Amortization of intangibles | 2,930 | 2,833 | 514 | |||||||||
Foreign currency exchange loss (gain) | (7,719 | ) | 936 | (109 | ) | |||||||
Amortization of debt discount on convertible 3.75% senior notes | 8,643 | 7,599 | 6,680 | |||||||||
Change in the fair value of derivative liability | — | — | (23,144 | ) | ||||||||
Loss on disposal of property/impairment | 113 | 16 | — | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | 1,894 | (8,008 | ) | 1,250 | ||||||||
Inventories | (5,275 | ) | (5,042 | ) | (3,578 | ) | ||||||
Prepaid expenses and other current receivables | (748 | ) | 3,427 | (5,408 | ) | |||||||
Other assets | 194 | 316 | (14 | ) | ||||||||
Accounts payable and accrued expenses | 5,711 | 2,897 | (2,849 | ) | ||||||||
Deferred income | — | (476 | ) | 362 | ||||||||
Net cash provided by (used in) operating activities | 400 | (798 | ) | (15,513 | ) | |||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (40,429 | ) | (16,655 | ) | (5,998 | ) | ||||||
Acquisition of product rights and other related assets | — | — | (35,418 | ) | ||||||||
Product acquisition costs, net | — | (3,421 | ) | (11,652 | ) | |||||||
Net cash used in investing activities | (40,429 | ) | (20,076 | ) | (53,068 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of stock, net | — | — | (3 | ) | ||||||||
Principal payments on note payable, bank | — | — | (3,160 | ) | ||||||||
Proceeds from exercise of common stock options and warrants | 269 | 96 | 165 | |||||||||
Principal payments on capital lease obligations | — | (70 | ) | (132 | ) | |||||||
Payment (recovery) from stockholder, net | — | (36 | ) | 19 | ||||||||
Net cash provided by (used in) financing activities | 269 | (10 | ) | (3,111 | ) | |||||||
Effect of exchange rate on cash and cash equivalents | 446 | (301 | ) | — | ||||||||
Net decrease in cash and cash equivalents | (39,760 | ) | (20,884 | ) | (71,692 | ) | ||||||
Cash and cash equivalents at beginning of year | 66,006 | 87,191 | 158,883 | |||||||||
Cash and cash equivalents at end of year | $ | 26,692 | $ | 66,006 | $ | 87,191 | ||||||
Supplemental Cash flow information: | ||||||||||||
Cash payments for interest | $ | 5,391 | $ | 5,393 | $ | 5,517 | ||||||
Cash payments for income taxes | 126 | 113 | 123 | |||||||||
Non cash investing and financing transactions: | ||||||||||||
Reclassification of derivative liability to equity | — | — | 18,256 | |||||||||
Acquisition of capital expenditures in accounts payable and accrued expenses | 3,186 | 1,805 | — | |||||||||
Capitalized stock compensation in capital expenditures | 127 | 91 | — | |||||||||
Issuance of stock to consultant | — | 189 | 31 | |||||||||
Issuance of restricted stock | — | — | 347 |
Series A Convertible | Series C Convertible | Additional | Accumulated Other | Total | ||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Paid-In | Accumulated | Comprehensive | Stockholders’ | ||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Loss | Equity | |||||||||||||||||||||||||||
Balance, December 31, 2014 | — | — | — | $ | — | 52,819,787 | $ | 548 | $ | 78,172 | $ | (39,586 | ) | $ | — | $ | 39,134 | |||||||||||||||||||
Issuance of stock pursuant to a public offering, net of associated fees of $1,868 | — | |||||||||||||||||||||||||||||||||||
Issuance of stock to consultant | 5,000 | 31 | 31 | |||||||||||||||||||||||||||||||||
Stock based compensation expense | 2,273 | 2,273 | ||||||||||||||||||||||||||||||||||
Stock warrants exercised | 67,636 | 82 | 82 | |||||||||||||||||||||||||||||||||
Stock options exercised | 75,766 | 1 | 82 | 83 | ||||||||||||||||||||||||||||||||
Issuance of restricted stock | 32,500 | 346 | 346 | |||||||||||||||||||||||||||||||||
Reclassification of derivative liability to equity | 18,256 | 18,256 | ||||||||||||||||||||||||||||||||||
Recovery from stockholder, net | 19 | 19 | ||||||||||||||||||||||||||||||||||
Costs related to stock issuance | (3 | ) | (3 | ) | ||||||||||||||||||||||||||||||||
Cumulative translation adjustment | (130 | ) | (130 | ) | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 6,668 | — | 6,668 | ||||||||||||||||||||||||||
Balance, December 31, 2015 | — | — | — | $ | — | 53,000,689 | $ | 549 | $ | 99,258 | $ | (32,918 | ) | $ | (130 | ) | $ | 66,759 | ||||||||||||||||||
Issuance of stock to consultant | 25,000 | 189 | 189 | |||||||||||||||||||||||||||||||||
Stock based compensation expense | 3,090 | 3,090 | ||||||||||||||||||||||||||||||||||
Stock warrants exercised | — | |||||||||||||||||||||||||||||||||||
Stock options exercised | 61,834 | 1 | 95 | 96 | ||||||||||||||||||||||||||||||||
Issuance of stock for vested restricted stock units | 60,918 | 1 | 1 | |||||||||||||||||||||||||||||||||
Recovery from stockholder, net | (36 | ) | (36 | ) | ||||||||||||||||||||||||||||||||
Tax benefit related to stock options | 28 | 28 | ||||||||||||||||||||||||||||||||||
Cumulative translation adjustment | (1,475 | ) | (1,475 | ) | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (11,985 | ) | — | (11,985 | ) | ||||||||||||||||||||||||
Balance, December 31, 2016 | — | — | — | $ | — | 53,148,441 | $ | 551 | $ | 102,624 | $ | (44,903 | ) | $ | (1,605 | ) | $ | 56,667 | ||||||||||||||||||
Issuance of stock to consultant | — | |||||||||||||||||||||||||||||||||||
Stock based compensation expense | 3,422 | 3,422 | ||||||||||||||||||||||||||||||||||
Stock options exercised | 171,566 | 2 | 267 | 269 | ||||||||||||||||||||||||||||||||
Issuance of stock for vested restricted stock units | 80,274 | 1 | (1 | ) | — | |||||||||||||||||||||||||||||||
Cumulative translation adjustment | (414 | ) | (414 | ) | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (15,191 | ) | — | (15,191 | ) | ||||||||||||||||||||||||
Balance, December 31, 2017 | — | — | — | $ | — | 53,400,281 | $ | 554 | $ | 106,312 | $ | (60,094 | ) | $ | (2,019 | ) | $ | 44,753 |
Useful Lives | ||
Buildings and improvements | 10 - 40 years | |
Machinery and equipment | 5 - 15 years | |
Computer hardware and software | 3 - 5 years | |
Furniture and fixtures | 5 years |
2017 | 2016 | 2015 | ||||||||||
Basic earnings (loss) per share computation: | ||||||||||||
Net income (loss) attributable to common stockholders —basic | $ | (15,191 | ) | $ | (11,985 | ) | $ | 6,668 | ||||
Weighted average common shares —basic | 53,323,954 | 53,078,158 | 52,872,814 | |||||||||
Basic earnings (loss) per share | $ | (0.28 | ) | $ | (0.23 | ) | $ | 0.13 | ||||
Dilutive earnings (loss) per share computation: | ||||||||||||
Net income (loss) attributable to common stockholders —basic | $ | (15,191 | ) | $ | (11,985 | ) | $ | 6,668 | ||||
Interest expense related to convertible 3.75% senior notes | — | — | 5,391 | |||||||||
Amortization of discount related to convertible 3.75% senior notes | — | $ | — | $ | 6,680 | |||||||
Change in the fair value of derivative | — | $ | — | $ | (23,144 | ) | ||||||
Net loss attributable to common stockholders —diluted | $ | (15,191 | ) | $ | (11,985 | ) | $ | (4,405 | ) | |||
Share Computation: | ||||||||||||
Weighted average common shares —basic | 53,323,954 | 53,078,158 | 52,872,814 | |||||||||
Effect of convertible 3.75% senior notes | — | — | 12,732,168 | |||||||||
Effect of dilutive stock options and warrants | — | — | 1,507,013 | |||||||||
Weighted average common shares outstanding —diluted | 53,323,954 | 53,078,158 | 67,111,995 | |||||||||
Diluted net loss per share | $ | (0.28 | ) | $ | (0.23 | ) | $ | (0.07 | ) |
2017 | 2016 | |||||||
(in thousands) | ||||||||
Raw materials | $ | 8,231 | $ | 6,834 | ||||
Work in progress | 616 | — | ||||||
Finished goods | 8,532 | 6,284 | ||||||
Reserve for obsolescence | (1,304 | ) | (410 | ) | ||||
$ | 16,075 | $ | 12,708 |
2017 | 2016 | |||||||
(in thousands) | ||||||||
Land | $ | 257 | $ | 257 | ||||
Building and improvements | 8,613 | 8,515 | ||||||
Machinery and equipment | 9,142 | 7,515 | ||||||
Computer hardware and software | 3,244 | 724 | ||||||
Furniture and fixtures | 449 | 344 | ||||||
Construction in progress | 55,017 | 15,496 | ||||||
76,722 | 32,851 | |||||||
Less accumulated depreciation and amortization | (8,367 | ) | (6,636 | ) | ||||
Property, plant and equipment, net | $ | 68,355 | $ | 26,215 |
December 31, 2017 | December 31, 2016 | ||||||
(in thousands) | (in thousands) | ||||||
Face amount of the Notes | $ | 143,750 | $ | 143,750 | |||
Unamortized discount | 20,517 | 29,160 | |||||
Debt issuance costs | 2,256 | 3,199 | |||||
Carrying amount of the Notes | $ | 120,977 | $ | 111,391 |
December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||
(in thousands) | (in thousands) | (in thousands) | |||||||||
Interest Expense at 3.75% coupon rate | $ | 5,391 | $ | 5,391 | $ | 5,391 | |||||
Debt discount amortization | 8,643 | 7,599 | 6,680 | ||||||||
Amortization of deferred financing costs | 942 | 828 | 728 | ||||||||
Less: capitalized interest and other | (3,778 | ) | (514 | ) | 559 | ||||||
Total interest expense | $ | 11,198 | $ | 13,304 | $ | 13,358 |
Years ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Gross product sales | $ | 215,883 | $ | 217,633 | $ | 99,721 | ||||||
Reduction to gross product sales: | ||||||||||||
Chargebacks and billbacks | 125,159 | 141,343 | 50,127 | |||||||||
Sales discounts and other allowances | 32,720 | 27,419 | 17,974 | |||||||||
Total reduction to gross product sales | $ | 157,879 | $ | 168,762 | $ | 68,101 | ||||||
Product sales, net | $ | 58,004 | $ | 48,871 | $ | 31,620 | ||||||
Contract manufacturing product sales | $ | 8,995 | $ | 17,033 | $ | 11,877 | ||||||
Total product sales, net | $ | 66,999 | $ | 65,904 | $ | 43,497 |
Returns | Chargebacks & Rebates | Discounts | Doubtful Accounts | TOTAL | ||||||||||||||||
Balance at December 31, 2014 | $ | 674 | $ | 4,552 | $ | 345 | $ | 16 | $ | 5,587 | ||||||||||
Provision | 1,724 | 65,713 | 2,201 | 74 | 69,712 | |||||||||||||||
Charges processed | (1,464 | ) | (57,815 | ) | (1,754 | ) | — | (61,033 | ) | |||||||||||
Balance at December 31, 2015 | $ | 934 | $ | 12,450 | $ | 792 | $ | 90 | $ | 14,266 | ||||||||||
Provision | 3,568 | 160,556 | 4,667 | 347 | 169,138 | |||||||||||||||
Charges processed | (2,192 | ) | (137,125 | ) | (2,156 | ) | (20 | ) | (141,493 | ) | ||||||||||
Balance at December 31, 2016 | $ | 2,310 | $ | 35,881 | $ | 3,303 | $ | 417 | $ | 41,911 | ||||||||||
Provision | 6,034 | 148,000 | 4,398 | 1,768 | 160,200 | |||||||||||||||
Charges processed | (7,023 | ) | (159,809 | ) | (6,737 | ) | — | (173,569 | ) | |||||||||||
Balance at December 31, 2017 | $ | 1,321 | $ | 24,072 | $ | 964 | $ | 2,185 | $ | 28,542 |
Goodwill | |||
December 31, 2015 | $ | 426 | |
Foreign currency translation | 20 | ||
December 31, 2016 | 446 | ||
Foreign currency translation | 25 | ||
December 31, 2017 | $ | 471 |
December 31, 2017 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Amortization Period | |||||||||||
Trademarks and Technology | $ | 40,380 | $ | (5,684 | ) | $ | 34,696 | 12.8 | ||||||
In-process research and development (“IPR&D”) | 18,311 | — | 18,311 | N/A - Indefinite lived | ||||||||||
Customer relationships | 3,783 | (773 | ) | 3,010 | 7.9 | |||||||||
Total | $ | 62,474 | $ | (6,457 | ) | $ | 56,017 |
December 31, 2016 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Amortization Period | |||||||||||
Trademarks and Technology | $ | 35,403 | $ | (3,123 | ) | $ | 32,280 | 13.8 | ||||||
In-process research and development (“IPR&D”) | 17,024 | — | 17,024 | N/A - Indefinite lived | ||||||||||
Customer relationships | 3,565 | (404 | ) | 3,161 | 8.9 | |||||||||
Total | $ | 55,992 | $ | (3,527 | ) | $ | 52,465 |
Trademarks and Technology | IPR&D | Customer Relationships | ||||||||||
December 31, 2015 | $ | 36,552 | $ | 14,351 | $ | 3,417 | ||||||
Acquisition | 661 | 2,811 | — | |||||||||
Amortization | (2,472 | ) | — | (361 | ) | |||||||
Foreign currency translation | (2,461 | ) | (138 | ) | 105 | |||||||
December 31, 2016 | 32,280 | 17,024 | 3,161 | |||||||||
Acquisition | ||||||||||||
Amortization | (2,561 | ) | — | (369 | ) | |||||||
IPR&D placed in service | 834 | (834 | ) | — | ||||||||
Impairment | — | (113 | ) | — | ||||||||
Foreign currency translation | 4,143 | 2,234 | 218 | |||||||||
December 31, 2017 | $ | 34,696 | $ | 18,311 | $ | 3,010 |
Year ending December 31, | Amortization Expense * | ||
2018 | 2,930 | ||
2019 | 2,930 | ||
2020 | 2,930 | ||
2021 | 2,930 | ||
2022 | 2,930 | ||
Thereafter | 23,058 |
Intangibles Category | Amortizable Life | |
Trademarks and Technology | 15 years | |
Customer Relationships | 10 years |
Assumptions | 2017 | 2016 | 2015 | ||||||
Expected dividends | 0 | % | 0 | % | 0 | % | |||
Risk free rate | 1.56 | % | 1.14 | % | 1.11 | % | |||
Expected volatility | 58.0% - 69.7% | 68.0% - 71.3% | 52.7% - 68.3% | ||||||
Expected term (in years) | 3.2 – 3.3 years | 3.1 – 3.3 years | 3.2 – 3.3 years |
Shares | Exercise Price Per Share | Weighted Average Exercise Price | ||||||||
January 1, 2015 shares issuable under options | 2,436,834 | 0.76 - 10.55 | $ | 1.79 | ||||||
Granted | 1,357,000 | 5.55 - 10.67 | 9.20 | |||||||
Exercised | (75,766 | ) | 0.76 - 3.62 | 1.10 | ||||||
Expired | — | — | — | |||||||
Forfeited | (125,334 | ) | 1.40 – 10.67 | 8.99 | ||||||
December 31, 2015 shares issuable under options | 3,592,734 | 0.79 - 10.67 | 4.36 | |||||||
Granted | 739,135 | 4.72 - 8.81 | 7.26 | |||||||
Exercised | (61,834 | ) | 1.10 - 6.51 | 1.54 | ||||||
Expired | — | — | — | |||||||
Forfeited | (164,666 | ) | 4.55 - 10.67 | 8.37 | ||||||
December 31, 2016 shares issuable under options | 4,105,369 | 0.79 - 10.67 | 4.76 | |||||||
Granted | 577,845 | 3.38 - 9.28 | 7.15 | |||||||
Exercised | (171,566 | ) | 0.79 - 5.85 | 1.92 | ||||||
Expired | — | — | — | |||||||
Forfeited | (211,838 | ) | 4.80 - 10.67 | 7.70 | ||||||
December 31, 2017 shares issuable under options | 4,299,810 | $0.79 - $10.67 | $ | 4.76 |
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Price | Number of Options | Weighted Average Remaining Life (Years ) | Weighted Average Exercise Price | Number of Options | Weighted Average Exercise Price | |||||||||||
$0.79 - $1.00 | 25,000 | 2.01 | $ | 0.79 | 25,000 | $ | 0.79 | |||||||||
1.01 - 1.50 | 1,721,000 | 4.14 | 1.06 | 1,721,000 | 1.06 | |||||||||||
1.51 - 10.67 | 2,553,810 | 7.76 | 7.85 | 1,369,466 | 7.92 | |||||||||||
$0.79 - $10.67 | 4,299,810 | 6.28 | $ | 5.09 | 3,115,466 | $ | 4.07 |
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Price | Number of Options | Weighted Average Remaining Life (Years ) | Weighted Average Exercise Price | Number of Options | Weighted Average Exercise Price | |||||||||||
$0.79 - $1.00 | 50,000 | 3.01 | $ | 0.79 | 50,000 | $ | 0.79 | |||||||||
1.01 - 1.50 | 1,808,400 | 5.11 | 1.07 | 1,808,400 | 1.07 | |||||||||||
1.51 - 10.67 | 2,246,969 | 8.35 | 7.82 | 805,803 | 7.15 | |||||||||||
$0.79 - $10.67 | 4,105,369 | 6.86 | $ | 4.76 | 2,664,203 | $ | 2.90 |
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Price | Number of Options | Weighted Average Remaining Life (Years ) | Weighted Average Exercise Price | Number of Options | Weighted Average Exercise Price | |||||||||||
$0.76 - $1.00 | 50,000 | 4.01 | $ | 0.79 | 50,000 | $ | 0.79 | |||||||||
1.01 - 1.50 | 1,862,400 | 6.14 | 1.07 | 1,851,400 | 1.07 | |||||||||||
1.51 - 10.55 | 1,680,334 | 8.96 | 8.10 | 289,997 | 4.02 | |||||||||||
$0.79 - $10.67 | 3,592,734 | 7.43 | $ | 4.36 | 2,191,397 | $ | 1.45 |
Options | Weighted Average Grant Date Fair Value | ||||||
Non-vested options at January 1, 2017 | 1,441,166 | $ | 3.58 | ||||
Granted | 577,845 | 3.37 | |||||
Vested | (654,156 | ) | 3.62 | ||||
Forfeited | (180,511 | ) | 3.46 | ||||
Non-vested options at December 31, 2017 | 1,184,344 | $ | 3.48 |
Number of Restricted Stock | Weighted Average Issuance Price | ||||||
Non-vested balance at January 1, 2015 | 108,334 | $ | 2.86 | ||||
Changes during the period: | |||||||
Shares granted | 32,500 | 10.67 | |||||
Shares vested | (140,834 | ) | 4.66 | ||||
Shares forfeited | — | ||||||
Non-vested balance at January 1, 2016 | — | $ | — |
Number of RSUs | Weighted Average Issuance Price | ||||||
Non-vested balance at January 1, 2016 | 182,750 | $ | 10.23 | ||||
Changes during the period: | |||||||
Shares granted | 58,068 | 7.50 | |||||
Shares vested | (60,918 | ) | 10.13 | ||||
Shares forfeited | — | — | |||||
Non-vested balance at December 31, 2016 | 179,900 | $ | 9.35 | ||||
Changes during the period: | |||||||
Shares granted | 93,468 | 7.26 | |||||
Shares vested | (80,274 | ) | 9.57 | ||||
Shares forfeited | (4,465 | ) | 7.09 | ||||
Non-vested balance at December 31, 2017 | 188,629 | $ | 9.35 |
2017 | 2016 | |||||||
(in thousands) | ||||||||
Wholesaler fees | $ | 7,044 | $ | 3,505 | ||||
Capital expenditures | 1,947 | 2,475 | ||||||
Payroll | 1,580 | 1,706 | ||||||
Royalties | 856 | 843 | ||||||
Studies | 596 | 153 | ||||||
Professional fees | 546 | 715 | ||||||
Interest expense | 240 | 240 | ||||||
Income Tax | 58 | 192 | ||||||
Other | 635 | 520 | ||||||
$ | 13,502 | $ | 10,349 |
2017 | 2016 | 2015 | ||||||||||
(in thousands) | ||||||||||||
U.S. operations | $ | (21,938 | ) | $ | (9,514 | ) | $ | 6,911 | ||||
Foreign operations | 6,662 | (2,184 | ) | (208 | ) | |||||||
Global Total | $ | (15,276 | ) | $ | (11,698 | ) | $ | 6,703 |
2017 | 2016 | 2015 | ||||||||||
Current tax expense (benefit): | ||||||||||||
Federal | $ | (86 | ) | $ | 26 | $ | — | |||||
State and local | 20 | 35 | 19 | |||||||||
Foreign | 42 | 272 | 28 | |||||||||
Total current tax expense | (24 | ) | 333 | 47 | ||||||||
Deferred tax expense: | ||||||||||||
Federal | — | — | — | |||||||||
State and local | — | — | — | |||||||||
Foreign | (61 | ) | (46 | ) | (12 | ) | ||||||
Total deferred tax expense | (61 | ) | (46 | ) | (12 | ) | ||||||
Total income tax (benefit)/expense | $ | (85 | ) | $ | 287 | $ | 35 |
2017 | 2016 | 2015 | ||||||||||
Expected Statutory expense (benefit) | $ | (5,195 | ) | $ | (3,977 | ) | $ | 2,244 | ||||
U.S. TCJA recovery of alternative minimum tax credits | (73 | ) | — | — | ||||||||
Change in the fair values of derivative and amortization of debt discount | 2,939 | 2,584 | (5,597 | ) | ||||||||
Other non-deductible expenses | 24 | 63 | 7 | |||||||||
Change in valuation allowance including U.S. TCJA rate reduction | (2,012 | ) | 590 | 3,254 | ||||||||
Reduction in deferred tax assets related to U.S. TCJA rate reduction | 7,504 | — | — | |||||||||
Shortfalls related to stock compensation expense | 129 | 154 | — | |||||||||
Tax rate differential - foreign vs. U.S. | (2,276 | ) | 822 | 114 | ||||||||
State income taxes, net of federal benefit | 13 | 23 | 13 | |||||||||
Shortfalls related to stock compensation expense | 129 | 154 | — | |||||||||
Prior year true-up | (13 | ) | — | — | ||||||||
Exchange gain | (13 | ) | 28 | — | ||||||||
$ | (85 | ) | $ | 287 | $ | 35 |
2017 | 2016 | |||||||
(in thousands) | ||||||||
Deferred Tax Assets: | ||||||||
Allowance for doubtful accounts | $ | 506 | $ | 118 | ||||
Inventory reserve | 619 | 467 | ||||||
Accrued expenses | 664 | 831 | ||||||
Property, plant and equipment | 214 | 317 | ||||||
Tax operating loss carryforwards | 9,327 | 10,962 | ||||||
Tax credit carryforwards | 168 | 254 | ||||||
Stock compensation | 1,817 | 2,301 | ||||||
Total deferred tax assets | 13,315 | 15,250 | ||||||
Less valuation allowance | (13,309 | ) | (15,250 | ) | ||||
Net deferred tax assets | 6 | — | ||||||
Deferred Tax Liabilities: | ||||||||
Intangible assets | (165 | ) | (205 | ) | ||||
Total deferred tax liabilities | (165 | ) | (205 | ) | ||||
Net deferred tax liability | $ | (159 | ) | $ | (205 | ) |
Valuation allowance at beginning of year | $ | 15,250 | ||
Change in accounting for stock compensation windfalls | 1,112 | |||
Current year operating loss | 3,048 | |||
Change in tax rate to 21% | (7,504 | ) | ||
Other | 1,403 | |||
Valuation allowance at end of year | $ | 13,309 |
2017 | 2016 | |||||||
(in thousands) | ||||||||
Federal: | ||||||||
Net operating losses (expiring through 2037) | $ | 41,688 | $ | 31,336 | ||||
Research tax credits (expiring through 2025) | 168 | 168 | ||||||
Alternative minimum tax credits (available without expiration) | — | 86 | ||||||
State: | ||||||||
Net Operating Losses: | ||||||||
Tennessee (expiring in 2032) | 659 | 529 | ||||||
New Jersey (expiring in 2037) | 4,320 | 1,764 | ||||||
Illinois (expiring in 2037) | 389 | 222 | ||||||
Alabama (expiring in 2032) | 24 | — | ||||||
Foreign | ||||||||
Net operating losses (no expiration) | $ | 255 | $ | 232 |
Year | Net Operating Loss (in thousands) | |||
2020 - 2023 | $ | 8,228 | ||
2024 - 2029 | 9,063 | |||
2030 - 2031 | 6,205 | |||
2032 - 2036 | 10,016 | |||
2037 | 8,176 | |||
Total | $ | 41,688 |
Commitments | |||
2018 | $ | 491 | |
2019 | 436 | ||
2020 | 441 | ||
2021 | 403 | ||
2022 | 327 | ||
2023 | 332 | ||
Thereafter | 83 | ||
$ | 2,513 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
Year Ended December 31, 2017 | ||||||||||||||||||||
Total revenues, net | $ | 19,891 | $ | 18,408 | $ | 12,851 | $ | 16,101 | $ | 67,251 | ||||||||||
Gross profit | 10,934 | 8,037 | 2,538 | 5,863 | 27,372 | |||||||||||||||
Operating income (loss) | 2,967 | (1,782 | ) | (8,039 | ) | (4,943 | ) | (11,797 | ) | |||||||||||
Net income (loss) | 831 | (919 | ) | (8,982 | ) | (6,121 | ) | (15,191 | ) | |||||||||||
Net income (loss) attributable to common stockholders | 831 | (919 | ) | (8,982 | ) | (6,121 | ) | (15,191 | ) | |||||||||||
Basic income (loss) per share | $ | 0.02 | $ | (0.02 | ) | $ | (0.17 | ) | $ | (0.11 | ) | $ | (0.28 | ) | ||||||
Diluted income (loss) per share | $ | 0.02 | $ | (0.02 | ) | $ | (0.17 | ) | $ | (0.11 | ) | $ | (0.28 | ) | ||||||
Year Ended December 31, 2016 | ||||||||||||||||||||
Total revenues, net | $ | 15,657 | $ | 17,138 | $ | 16,151 | $ | 17,935 | $ | 66,881 | ||||||||||
Gross profit | 7,955 | 9,556 | 8,014 | 9,162 | 34,687 | |||||||||||||||
Operating income | 837 | 1,076 | 303 | 326 | 2,542 | |||||||||||||||
Net loss | (950 | ) | (2,901 | ) | (2,703 | ) | (5,431 | ) | (11,985 | ) | ||||||||||
Net loss attributable to common stockholders | (950 | ) | (2,901 | ) | (2,703 | ) | (5,431 | ) | (11,985 | ) | ||||||||||
Basic loss per share | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.23 | ) | |||||
Diluted loss per share | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.23 | ) |
Additions | |||||||||||||||||
Balance at Beginning of Year | Charged to Costs and Expenses | Charged other Accounts | Deductions | Balance at End of Year | |||||||||||||
Year Ended December 31, 2015 | |||||||||||||||||
Change in Tax Valuation Allowance | $ | 10,970 | — | 3,339 | — | $ | 14,309 | ||||||||||
Allowance for Doubtful Accounts | $ | 16 | 74 | — | — | $ | 90 | ||||||||||
Reserve for Inventory Obsolescence | $ | 212 | 51 | (8 | ) | 134 | $ | 121 | |||||||||
Year Ended December 31, 2016 | |||||||||||||||||
Change in Tax Valuation Allowance | $ | 14,309 | — | 941 | — | $ | 15,250 | ||||||||||
Allowance for Doubtful Accounts | $ | 90 | 347 | — | 20 | $ | 417 | ||||||||||
Reserve for Inventory Obsolescence | $ | 121 | 872 | — | 583 | $ | 410 | ||||||||||
Year Ended December 31, 2017 | |||||||||||||||||
Change in Tax Valuation Allowance | $ | 15,250 | (61 | ) | (1,880 | ) | — | $ | 13,309 | ||||||||
Allowance for Doubtful Accounts | $ | 417 | 1,768 | — | $ | 2,185 | |||||||||||
Reserve for Inventory Obsolescence | $ | 410 | 2,000 | 9 | 1,115 | $ | 1,304 |
Date: March 19, 2018 | |
/s/ Jason Grenfell-Gardner | |
Principal Executive Officer |
Date: March 19, 2018 | |
/s/ Damian Finio | |
Principal Financial Officer |
Dated: March 19, 2018 | /s/ Jason Grenfell-Gardner |
Principal Executive Officer | |
Dated: March 19, 2018 | /s/ Damian Finio |
Principal Financial Officer |
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Document And Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Mar. 06, 2018 |
Jun. 30, 2017 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Teligent, Inc. | ||
Entity Central Index Key | 0000352998 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 394.8 | ||
Trading Symbol | TLGT | ||
Entity Common Stock, Shares Outstanding | 53,496,889 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 53,400,281 | 53,148,441 |
Common stock, shares outstanding (in shares) | 53,400,281 | 53,148,441 |
Convertible Notes Payable | ||
Stated interest rate | 3.75% | 3.75% |
Face amount of the Notes | $ 143,750,000 | $ 143,750,000 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (15,191) | $ (11,985) | $ 6,668 |
Other comprehensive loss, net of tax | |||
Foreign currency translation adjustment | (414) | (1,475) | (130) |
Other comprehensive loss | (414) | (1,475) | (130) |
Comprehensive income (loss) | $ (15,605) | $ (13,460) | $ 6,538 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Convertible Notes Payable | |||
Stated interest rate | 3.75% | 3.75% | 3.75% |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Statement of Stockholders' Equity [Abstract] | |
Stock issuance associated fees | $ 1,868 |
Nature of the Business and Liquidity (Notes) |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business and Liquidity | Nature of the Business and Liquidity Nature of the Business Teligent, Inc. is a Delaware corporation incorporated in 1977 and is a specialty generic pharmaceutical company. Under its own label, the Company markets and sells generic topical and branded generic and generic injectable pharmaceutical products in the United States and Canada. In the United States, the Company currently markets 25 generic topical pharmaceutical products and four branded generic pharmaceutical products. In Canada, the Company sells over 30 generic and branded generic injectable products and medical devices. Generic pharmaceutical products are bioequivalent to their brand name counterparts. The Company also provides contract manufacturing services to the pharmaceutical, over-the-counter, ("OTC"), and cosmetic markets. The Company operates its business under one segment. Our common stock is trading on the NASDAQ Global Select Market, under the trading symbol “TLGT.” Teligent also develops, manufactures, fills, and packages topical semi-solid and liquid products for branded and generic pharmaceutical customers, as well as the OTC and cosmetic markets. These products are used in a wide range of applications from cosmetics and cosmeceuticals to the prescription treatment of conditions like dermatitis, psoriasis, and eczema. Teligent has continued to make progress on its facility expansion in Buena, New Jersey, to support the increased capacity demand expected from future product approvals from the FDA. As the Company continues to execute the expansion of our development and commercial base beyond topical generics to include injectable generics, complex generics and ophthalmic generics (what we call our “TICO strategy”), it will compete in other markets, including the ophthalmic generic pharmaceutical market, and expects to face other competitors. Liquidity The Company’s principal sources of liquidity are cash and cash equivalents of approximately $26.7 million at December 31, 2017 and cash from operations. The Company may require additional funding and this funding will depend, in part, on the timing and structure of potential business arrangements. If necessary, the Company may continue to seek to raise additional capital through the sale of its equity or through a strategic alliance with a third party. There may also be additional acquisition and growth opportunities that may require external financing. There can be no assurance that such financing will be available on terms acceptable to the Company, or at all. The Company also has the ability to defer certain product development and other programs, if necessary. The Company believes that our existing capital resources will be sufficient to support its current business plan and operations beyond March 2019. |
Summary of Significant Accounting Policies |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of Teligent, Inc. and its wholly-owned and majority-owned subsidiaries. All inter-company accounts and transactions have been eliminated. The Company consolidated the following entities: Igen, Inc., Teligent Pharma. Inc., Teligent Luxembourg S.à.r.l., Teligent OÜ, Teligent Canada Inc., and Teligent Jersey Limited., in addition to the following inactive entities: Microburst Energy, Inc., Blood Cells, Inc. and Flavorsome, Ltd. Cash Equivalents Cash equivalents include cash on hand and money market funds. The carrying amounts approximate the fair value due to the short term maturity of these investments. Money market funds are short-term investments, which have original maturities of 90 days or less. These include direct obligations of the U.S. Treasury, including bills, notes and bonds, as well as obligations issued or guaranteed by agencies or instrumentalities of the U.S. government including government-sponsored enterprises, or GSEs. The Company has restricted cash, consisting of escrow accounts (see Note 12) and letter of credits, totaling $0.5 million as of December 31, 2017 and December 31, 2016. These balances are included within Other Assets on the Consolidated Balance Sheet. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, trade receivables, restricted cash, notes payable, accounts payable and other accrued liabilities at December 31, 2017 approximate their fair value for all periods presented. The Company measures fair value in accordance with ASC 820-10, “Fair Value Measurements and Disclosures”. ASC 820-10 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to its contract services customers based upon credit evaluations in the normal course of business, primarily with 30-day terms. The Company does not require collateral from its customers. Bad debt provisions are provided for on the allowance method based on historical experience and management’s evaluation of outstanding accounts receivable. The Company reviews the allowance for doubtful accounts regularly, and past due balances are reviewed individually for collectability. The Company charges off uncollectible receivables against the allowance when the likelihood of collection is remote. The Company extends credit to wholesaler and distributor customers and national retail chain customers, based upon credit evaluations, in the normal course of business, primarily with 60 to 90 day terms. The Company maintains customer-related accruals and allowances that consist primarily of chargebacks, rebates, sales returns, shelf stock allowances, administrative fees and other incentive programs. Some of these adjustments relate specifically to the generic prescription pharmaceutical business. Typically, the aggregate gross-to-net adjustments related to these customers can exceed 70% of the gross sales through this distribution channel. Certain of these accruals and allowances are recorded in the balance sheet as current liabilities and others are recorded as a reduction to accounts receivable. Revenue Recognition The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred or contractual services rendered, the sales price is fixed or determinable, and collection is reasonably assured in conformity with ASC 605, Revenue Recognition. The Company derives its revenues from three basic types of transactions: sales of its own generic pharmaceutical topical products, sales of manufactured product for its customers included in product sales, and research and product development services and other services performed for third parties. Due to differences in the substance of these transaction types, the transactions require, and the Company utilizes, different revenue recognition policies for each. Product Sales: Product Sales, net, include Company Product Sales and Contract Manufacturing Sales. Company Product Sales: The Company records revenue from Company product sales when title and risk of ownership have been transferred to the customer, which is typically upon delivery of products to the customer. Revenue and Provision for Sales Returns and Allowances As is customary in the pharmaceutical industry, the Company’s gross product sales from Company label products are subject to a variety of deductions in arriving at reported net product sales. When the Company recognizes revenue from the sale of products, an estimate of sales returns and allowances (“SRA”) is recorded, which reduces product sales. Accounts receivable and/or accrued expenses are also reduced and/or increased by the SRA amount. These adjustments include estimates for chargebacks, rebates, cash discounts and returns and other allowances. These provisions are estimates based on historical payment experience, historical relationship to revenues, estimated customer inventory levels and current contract sales terms with direct and indirect customers. The estimation process used to determine our SRA provision has been applied on a consistent basis and no material adjustments have been necessary to increase or decrease our reserves for SRA as a result of a significant change in underlying estimates. The Company will use a variety of methods to assess the adequacy of our SRA reserves to ensure that our financial statements are fairly stated. These will include periodic reviews of customer inventory data, customer contract programs, subsequent actual payment experience, and product pricing trends to analyze and validate the SRA reserves. The provision for chargebacks is our most significant sales allowance. A chargeback represents an amount payable in the future to a wholesaler for the difference between the invoice price paid to the Company by our wholesale customer for a particular product and the negotiated contract price that the wholesaler’s customer pays for that product. The Company’s chargeback provision and related reserve varies with changes in product mix, changes in customer pricing and changes to estimated wholesaler inventories. The provision for chargebacks also takes into account an estimate of the expected wholesaler sell-through levels to indirect customers at contract prices. The Company will validate the chargeback accrual quarterly through a review of the inventory reports obtained from our largest wholesale customers. This customer inventory information is used to verify the estimated liability for future chargeback claims based on historical chargeback and contract rates. These large wholesalers represent 90% - 95% of the Company’s chargeback payments. The Company continually monitors current pricing trends and wholesaler inventory levels to ensure the liability for future chargebacks is fairly stated. Net revenues and accounts receivable balances in the Company’s consolidated financial statements are presented net of SRA estimates. Certain SRA balances are included in accounts payable and accrued expenses. Accounts receivable are presented net of SRA balances of $28.5 million and $41.5 million at December 31, 2017 and 2016, respectively. Accounts payable and accrued expenses include $7.0 million and 3.5 million at December 31, 2017 and 2016, respectively, for certain fees related to services provided by the wholesalers. Wholesale fees of $7.0 million, $3.7 million and $6.3 million for the years ended December 31, 2017, 2016 and 2015, respectively, were included in cost of goods sold. In addition, in connection with four of the 29 products the Company currently manufactures, markets and distributes in its own label in the U.S., in accordance with an agreement entered into in December of 2011, the Company is required to pay a royalty calculated based on net sales to one of its pharmaceutical partners. The royalty is calculated based on contracted terms of 40% of net sales for the four products, which is to be paid quarterly to the pharmaceutical partner that the agreement is with. In accordance with the agreement, net sales exclude fees related to services provided by the wholesalers. Accounts payable and accrued expenses include $0.9 million and $0.8 million at December 31, 2017 and 2016, respectively, related to these royalties. Royalty expense of $2.2 million, $3.0 million and $3.6 million was included in cost of goods sold for the years ended December 31, 2017, 2016, and 2015 respectively. The Company includes significant estimates to arrive at net product sales arising from wholesaler chargebacks, Medicaid and Medicare rebates, allowances and other pricing and promotional programs. Contract Manufacturing Sales: The Company recognizes revenue when title transfers to its customers, which is generally upon shipment of products. These shipments are made in accordance with sales commitments and related sales orders entered into with customers either verbally or in written form. The revenues associated with these transactions, net of appropriate cash discounts, product returns and sales reserves, are recorded upon shipment of the products and are included in product sales, net on the Company's Consolidated Statement of Operations. Research and Development Income: The Company establishes agreed upon product development agreements with its customers to perform product development services. Product development revenues are recognized in accordance with the product development agreement upon the completion of the phases of development and when the Company has no future performance obligations relating to that phase of development. Revenue recognition requires the Company to assess progress against contracted obligations to assure completion of each stage. These payments are generally non-refundable and are reported as deferred until they are recognizable as revenue. If no such arrangement exists, product development fees are recognized ratably over the entire period during which the services are performed. Other types of revenue include royalty or licensing revenue, and would be recognized based upon the contractual agreement upon completion of the earnings process. In making such assessments, judgments are required to evaluate contingencies such as potential variances in schedule and the costs, the impact of change orders, liability claims, contract disputes and achievement of contractual performance standards. Changes in total estimated contract cost and losses, if any, are recognized in the period they are determined. Billings on research and development contracts are typically based upon terms agreed upon by the Company and customer and are stated in the contracts themselves and do not always align with the revenues recognized by the Company. Concentration of Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash equivalents and trade receivables. These include direct obligations of the U.S. Treasury, including bills, notes and bonds, as well as obligations issued or guaranteed by agencies or instrumentalities of the U.S. government including GSEs, which are not federally insured. The Company maintains its cash in accounts with quality financial institutions. Although the Company currently believes that the financial institutions with which the Company does business will be able to fulfill their commitments to us, there is no assurance that those institutions will be able to continue to do so. In 2017, the Company had sales to three customers which individually accounted for more than 10% of the Company’s total revenue. These customers had sales of $18.7 million, $9.9 million and $9.6 million, respectively, and represented 57% of total revenues in the aggregate. Accounts receivable related to the Company’s major customers comprised of 47%, 15% and 14%, respectively, and represented 76% of all accounts receivable as of December 31, 2017. In 2016, the Company had sales to three customers which individually accounted for more than 10% of the Company’s total revenue. These customers had sales of $13.5 million, $8.6 million and $6.8 million, respectively, and represented 43% of total revenues in the aggregate. Accounts receivable related to the Company’s major customers comprised of 20%, 56% and 11%, respectively, and represented 81% of all accounts receivable as of December 31, 2016. In 2015, the Company had sales to three customers which individually accounted for more than 10% of the Company’s total revenue. These customers had sales of $12.3 million and $5.8 million and $6.5 million, respectively, and represented 52% of total revenues in the aggregate. Accounts receivable related to the Company’s major customers comprised of 43%, 33% and 6%, respectively, and represented 83% of all accounts receivable as of December 31, 2015. The Company had net revenue from one product, Econazole Nitrate Cream 1%, which accounted for 4%, 8%, and 45% of total revenues in 2017, 2016 and 2015, respectively. Lidocaine Ointment 5%, which the Company launched at the end of the first quarter of 2016 accounted for 17% and 23% of total revenues in 2017 and 2016. Zantac for injection, which the Company acquired in the fourth quarter of 2015, accounted for 10%, 3% and 0% of total revenues in 2017, 2016 and 2015. For the year ended December 31, 2017, domestic net revenues were $53.5 million and foreign net revenues were $13.8 million. As of December 31, 2017, domestic assets were $117.7 million and foreign assets were $72.3 million. For the year ended December 31, 2016, domestic net revenues were $56.1 million and foreign net revenues were $10.8 million. As of December 31, 2016, domestic assets were $120.0 million and foreign assets were $63.2 million. For the year ended December 31, 2015, domestic net revenues were $42.7 million and foreign net revenues were $1.6 million. As of December 31, 2015, domestic assets were $129.0 million and foreign assets were $51.7 million. While the company purchases raw materials to manufacture certain products, it also utilizes contract manufacturing organizations (CMO's) to purchase finished products. The Company currently purchases from numerous sources which therefore reduces the risk of delays or difficulties in getting materials and/or products. Inventories Inventories are valued at the lower of cost, using the first-in, first-out (“FIFO”) method, or market. The Company records an inventory reserve for losses associated with dated, expired, excess and obsolete raw materials. This reserve is based on management’s current knowledge with respect to inventory levels, planned production, and extension capabilities of materials on hand. Management does not believe the Company’s inventory is subject to significant risk of obsolescence in the near term. Property, Plant and Equipment Depreciation and amortization of property, plant and equipment is provided for under the straight-line method over the assets’ estimated useful lives as follows:
Leasehold improvements are amortized over the shorter of estimated useful life or the lease term. Repair and maintenance costs are charged to operations as incurred while major improvements are capitalized. Construction in progress ("CIP") costs are amortized based on the asset class when they are put into service. When assets are retired or disposed, the related cost and accumulated depreciation thereon are removed and any gains or losses are included in operating results. Intangible Assets Definite-lived intangible assets are stated at cost less accumulated amortization. Amortization of definite-lived intangible assets is computed on a straight-line basis over the assets’ estimated useful lives, generally for periods ranging from 10 to 15 years. The Company continually evaluates the reasonableness of the useful lives of these assets. Indefinite-lived intangible assets are not amortized, but instead are tested at least annually for impairment. Costs to renew or extend the term of a recognized intangible asset are expensed as incurred. An impairment is recognized in the amount, if any, by which the carrying amount of such assets exceeds their respective fair values and would be recorded in the selling, general and administrative expense on the Consolidated Statements of Operations. In-Process Research and Development Amounts allocated to in-process research and development (“IPR&D”) in connection with a business combination are recorded at fair value and are considered indefinite-lived intangible assets subject to the impairment testing in accordance with the Company’s impairment testing policy for indefinite-lived intangible assets. As products in development are approved for sale, amounts will be allocated to product rights and will be amortized over their estimated useful lives. These valuations reflect, among other things, the impact of changes to the development programs, the projected development and regulatory time frames and the current competitive environment. Changes in any of the Company’s assumptions may result in a reduction to the estimated fair value of the IPR&D asset and could result in future impairment charges. Long-Lived Assets In accordance with the provisions of ASC 360-10-55, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In performing such review for recoverability, the Company compares expected future cash flows of assets to the carrying value of the long-lived assets and related identifiable intangibles. If the expected future cash flows (undiscounted) are less than the carrying amount of such assets, the Company recognizes an impairment loss for the difference between the carrying value of the assets and their estimated fair value, with fair values being determined using projected discounted cash flows at the lowest level of cash flows identifiable in relation to the assets being reviewed. As of December 31, 2017, no impairments existed. Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is tested for impairment on an annual basis during the fourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company first performs a qualitative assessment to determine if the quantitative impairment test is required. If changes in circumstances indicate an asset may be impaired, the Company performs the quantitative impairment test. In accordance with accounting standards, a two-step quantitative method is used for determining goodwill impairment. In the first step, the Company determines the fair value. If the net book value exceeds its fair value, the second step of the impairment test which requires allocation of the fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations would then be performed. Any residual fair value is allocated to goodwill. An impairment charge is recognized only if the implied fair value of our reporting unit’s goodwill is less than its carrying amount. The carrying value of goodwill at December 31, 2017 was $0.5 million. We believe it is unlikely that there will be a material change in the future estimates or assumptions used to test for impairment losses on goodwill. However, if actual results were not consistent with our estimates or assumptions, we could be exposed to an impairment charge. Acquisitions The Company accounts for acquired businesses using the acquisition method of accounting, which requires with limited exceptions, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When net assets that do not constitute a business are acquired, no goodwill is recognized. Contingent consideration, if any, is included as part of the acquisition cost and is recognized at fair value as of the acquisition date. Any liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. These changes in fair value are recognized in earnings. Foreign Currency Translation The net assets of international subsidiaries where the local currencies have been determined to be the functional currencies are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation account, which is included in accumulated other comprehensive income (loss) (AOCI) and reflected as a separate component of equity. For those subsidiaries where the U.S. dollar has been determined to be the functional currency, non-monetary foreign currency assets and liabilities are translated using historical rates, while monetary assets and liabilities are translated at current rates, with the U.S. dollar effects of rate changes included in Other (income) expense, net. Foreign exchange gain of $7.7 million was recorded for the year ended December 31, 2017, primarily related to the foreign currency translation of our intercompany loans denominated in U.S. dollars to our foreign subsidiaries. These loans are to be repaid in November 2022. Depending on the changes in foreign currency exchange rates, we will continue to record a non-cash gain or loss on translation for the remainder of the term of these loans. Due to the nature of this transaction, there is no economic benefit to the Company to hedge this transaction. Accounting for Environmental Costs Accruals for environmental remediation are recorded when it is probable a liability has been incurred and costs are reasonably estimable. The estimated liabilities are recorded at undiscounted amounts. Environmental insurance recoveries are included in the statement of operations in the year in which the issue is resolved through settlement or other appropriate legal process. Income Taxes The Company records income taxes in accordance with ASC 740-10, “Accounting for Income Taxes,” under the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to operating loss and tax credit carry forwards and differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded based on a determination of the ultimate realizability of future deferred tax assets. The Company complies with the provisions of ASC 740-10-25 that clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with ASC 740-10, “Accounting for Income Taxes,” and prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. There were no unrecognized tax benefits as of the date of adoption. As such, there are no unrecognized tax benefits included in the balance sheet that would, if recognized, affect the effective tax rate. The Company records interest and penalties relating to uncertain tax positions as a component of income tax expense. Stock-Based Compensation ASC 718-10 defines the fair-value-based method of accounting for stock-based employee compensation plans and transactions used by the Company to account for its issuances of equity instruments to record compensation cost for stock-based employee compensation plans at fair value as well as to acquire goods or services from non-employees. Transactions in which the Company issues stock-based compensation to employees, directors and advisors and for goods or services received from non-employees are accounted for based on the fair value of the equity instruments issued. The Company utilizes pricing models in determining the fair values of options, RSU's and warrants issued as stock-based compensation. These pricing models utilize the market price of the Company’s common stock and the exercise price of the option or warrant, as well as time value and volatility factors underlying the positions. Stock-based compensation expense is recognized over the requisite service period of the award, which usually coincides with the vesting period of the grant. Debt Issuance Costs Expenses related to debt financing activities are capitalized and amortized on an effective interest method, over the term of the loan. For more details, refer to Note 5. ASU 2015-3 specifies that debt issuance costs are to be netted against the carrying value of the financial liability. Under prior guidance, debt issuance costs were recognized as a deferred charge and reported as a separate asset on the balance sheet. The updated guidance aligns the treatment of debt issuance costs and debt discounts in that both reduce the carrying value of the liability. Amortization of debt issuance costs is to be recorded as interest expense on the income statement. Product Development and Research The Company’s research and development costs are expensed as incurred. Shipping and Handling Costs Costs related to shipping and handling is comprised of outbound freight and the associated labor. These costs are recorded in costs of sales. For the years ended December 31, 2017, 2016 and 2015, the costs relating to shipping and handling totaled $1.2 million, $0.7 million and $0.2 million, respectively. Earnings (Loss) per Common Share Basic earnings (loss) per share of common stock is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share of common stock is computed using the weighted average number of shares of common stock and potential dilutive common stock equivalents outstanding during the period. Potential dilutive common stock equivalents include shares issuable upon the conversion of the notes and the exercise of options and warrants. Due to the net loss for the years ended December 31, 2017 and 2016, the effect of the Company’s potential dilutive common stock equivalents was anti-dilutive; as a result, the basic and diluted weighted average number of common shares outstanding and net loss per common share are the same. As of December 31, 2017, the shares of common stock issuable in connection with stock options and warrants have been excluded from the diluted earnings (loss) per share, as their effect would have been anti-dilutive. For the years ended December 31, 2017, 2016 and 2015 (in thousands except shares and per share data)
Derivatives The Company accounts for its derivative instruments in accordance with ASC 815-10, “Derivatives and Hedging” (“ASC 815-10”). ASC 815-10 establishes accounting and reporting standards requiring that derivative instruments, including derivative instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at its fair value. ASC 815-10 also requires that changes in the fair value of derivative instruments be recognized currently in results of operations unless specific hedge accounting criteria are met. The Company has not entered into hedging activities to date. The Company’s derivative liability is the embedded convertible option of its Convertible Notes issued December 16, 2014 (as defined in Note 5), which has been recorded as a liability at fair value until May 20, 2015, and was revalued at each reporting date, with changes in the fair value of the instruments included in the consolidated statements of operations as non-operating income (expense). Due to the approval of the sufficient shares at the Company’s annual shareholder meeting, the liability for the embedded derivative was reclassified to equity on May 20, 2015. The Company had no derivatives at December 31, 2017 and December 31, 2016. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the historical valuation of the derivative liability, SRA allowances, allowances for excess and obsolete inventories, allowances for doubtful accounts, provisions for income taxes and related deferred tax asset valuation allowances, stock based compensation, the impairment of long-lived assets (including intangibles, goodwill and property, plant and equipment), property, plant and equipment and legal accruals for environmental cleanup and remediation costs. Actual results could differ from those estimates. Reclassification Certain prior year amounts were reclassified to conform to current year presentation. For the year ended December 31, 2016, the impact of such reclassification of the non-cash portion of the capital expenditures would have been a reduction of both cash from operating activities and cash used in investing activities, in the amount of $1.9 million. Adoption of Recent Accounting Pronouncements In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): “Simplifying the Measurement of Inventory”. ASU 2015-11 requires inventory measured using any method other than last-in, first out (“LIFO”) or the retail inventory method to be subsequently measured at the lower of cost or net realizable value, rather than at the lower of cost or market. Under this ASU, subsequent measurement of inventory using the LIFO and retail inventory method is unchanged. ASU 2015-11 is effective prospectively for fiscal years, and for interim periods within those years, beginning after December 15, 2016. The Company's adoption of this ASU, effective January 1, 2017, did not have any significant impact on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): “Improvements to Employee Share-Based Payment Accounting”. The update includes multiple provisions intended to simplify various aspects of the accounting for share-based payments, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has adopted this ASU, effective January 1, 2017, and is recognizing windfall tax benefits in additional paid in capital on a prospective basis. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): “Recognition and Measurement of Financial Assets and Financial Liabilities”. The update supersedes Topic 840, Leases and requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. Topic 842 retains a distinction between finance leases and operating leases, with cash payments from operating leases classified within operating activities in the statement of cash flows. The amendments in this update are effective for fiscal years beginning after December 15, 2018 for public business entities, which for the Company means January 1, 2019. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): "Restricted Cash (a consensus of the FASB Emerging Issues Task Force)". The update addresses the diversity in the industry with respect to classification and presentation of changes in restricted cash on the statement of cash flows. These amendments require that a statement of cash flows explain the restricted cash change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. It affects those reporting entities that are required to evaluate whether they should consolidate a variable interest entity "VIE". The amendments in this update are effective for fiscal years beginning after December 15, 2017 for public business entities, including interim periods within those fiscal years. For the Company, the amendments are effective January 1, 2018. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): “Clarifying the Definition of a Business”. The update clarifies the definition of a business, specifically for companies to better evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For the Company, the amendments are effective January 1, 2018. The Company's adoption of this ASU, is not expected to have any significant impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323): “Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings”. The update shows amendments to two SEC Announcements made late in 2016 regarding four specific standards as follows: ASU 2014-09, Revenue from Contracts with Customers (Topic 606), ASU 2016-02, Leases (Topic 842), ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), and ASU 2014-01, Investments - Equity Method and Joint Ventures (Topic 323). The amendments in this update require changes to the U.S. GAAP Financial Reporting Taxonomy and the changes will be incorporated into the proposed 2018 Taxonomy which are available for public comment and finalized as part of the annual release process. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment”. The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. It affects public entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill. A public entity that is a U.S. Securities and Exchange Commission ("SEC") filer should adopt the amendments in this update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. For the Company, the amendments are effective January 1, 2020. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets”. This update addresses guidance for partial sales of nonfinancial assets. It affects (i) an entity that enters into a contract to transfer to a customer a nonfinancial asset, group of nonfinancial assets, or ownership interest in a consolidated subsidiary that is not a business or nonprofit entity, (ii) an entity that historically had transactions within the scope of the real estate-specific derecognition guidance, and (iii) an entity that contributes nonfinancial assets that are not a business or a nonprofit activity to a joint venture or other noncontrolled investee. The amendments are effective at the same time as the amendments in ASU 2014-09. Therefore, for the Company, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Public entities may apply the guidance earlier but only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company does not currently expect to enter into any such nonfinancial asset or ownership interest in its consolidated subsidiaries agreements but will refer to the guidance in ASU 2017-05 should that occur. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): “Scope of Modification Accounting”. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments affect any entity that changes the terms or conditions of a share-based payment award. The amendments are effective for fiscal years beginning after December 15, 2017. For the Company, the amendments are effective January 1, 2018. The Company has not made any changes to the terms or conditions of share-based payment awards but will refer to the guidance in ASU 2017-09 should that occur. The Company's adoption of this ASU is not expected to have any significant impact on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This guidance is effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The adoption of this guidance is not expected to have a material impact on the Company's Consolidated Financial Statements and related disclosures. Revenue Topic 606 Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The standard, including subsequently issued amendments, will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The key focus of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this key focus, there is a five-step approach outlined in the standard. Entities are permitted to apply the new standard either retrospectively, subject to certain practical expedients, or the modified retrospective method that requires the application of the guidance only to contracts that are uncompleted on the date of initial application. For the Company, Topic 606 and subsequently issued amendments will be effective January 1, 2018. We have performed a comprehensive review of our existing revenue arrangements as of December 31, 2017 following the five-step model. Our analysis indicates that there will be no significant changes to how the amount and timing of revenue will be recognized under the new guidance as compared to existing guidance. Additionally, our analysis indicates that there will be no significant changes to how costs to obtain and fulfill our customer contracts will be recognized under the new guidance as compared to existing guidance. We will adopt this guidance as of January 1, 2018 using the modified retrospective method and we expect that the impact of adoption on our consolidated balance sheet, statement of operations, statement of changes in stockholders’ equity and statement of cash flows will not be material. The adoption of the new guidance will impact the way we analyze, document, and disclose revenue recognition under customer contracts beginning on January 1, 2018; will require reclassification of certain amounts on the balance sheet and will result in additional disclosures in our financial statements. |
Inventories |
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories as of December 31, 2017 and 2016 consisted of:
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Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, at cost, as of December 31, 2017 and 2016, consisted of:
The Company recorded depreciation and amortization expense of $1.7 million, $0.9 million and $0.6 million in 2017, 2016 and 2015, respectively. During the twelve months ended December 31, 2017 and 2016 there was $3.6 million of interest and $0.4 million of interest, respectively, capitalized into construction in progress. During the twelve months ended December 31, 2017 and 2016 there was $0.8 million of payroll and $0.4 million of payroll, respectively, capitalized into construction in progress. |
Convertible 3.75% Senior Notes |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible 3.75% Senior Notes | Convertible 3.75% Senior Notes On December 16, 2014, the Company issued $125 million aggregate principal amount of 3.75% Convertible Senior Notes due 2019, or the Notes. On December 22, 2014, the Company announced the closing of the initial purchasers’ exercise in full of their option to purchase an additional $18.75 million aggregate principal amount. The Notes bear interest at a fixed rate of 3.75% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2015 and mature on December 15, 2019, unless earlier repurchased, redeemed or converted. The Notes are convertible into shares of the Company’s common stock, cash or a combination thereof. On May 20, 2015, the Company received shareholder approval for the increase in the number of shares of common stock authorized and available for issuance upon conversion of the Notes. The remaining unamortized discount and unamortized debt financing costs will be amortized over the remaining term of the debt of 2.0 years. At December 31, 2017 and December 31, 2016, the net carrying amount of the liability component and the remaining unamortized debt discount were as follows:
Debt issuance costs associated with the Notes, include fees of $2.3 million at December 31, 2017 and $3.2 million at December 31, 2016. For the years ended December 31, 2017, December 31, 2016 and December 31, 2015, the Company recorded the following expenses in relation to the Notes:
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Gross-to-Net (Notes) |
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Revenue Recognition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross-to-Net | Gross-to-Net As is customary in the pharmaceutical industry, the Company’s gross product sales from Company label products are subject to a variety of deductions in arriving at reported net product sales. The Company's gross-to-net adjustments for the three years ended December 31, 2017, 2016 and 2015 are as follows (in thousands):
The annual activity in the Company's allowance for customer deductions and doubtful accounts for the three years ended December 31, 2017, 2016 and 2015 is as follows (in thousands):
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The Company acquired the assets of Canadian pharmaceutical company Alveda Pharmaceuticals, Inc., in November 2015. As a result of the acquisition, we recorded goodwill of $0.4 million. We assess the recoverability of the carrying value of goodwill in the fourth quarter of each year, and whenever events occur or circumstances change that would, more likely than not, reduce the fair value of our reporting unit below its carrying value. There have been no events or changes in circumstances that would have reduced the fair value of our reporting unit below its carrying value. No impairment losses were recognized during the year ended December 31, 2017. Changes in goodwill during the two years ended December 31, 2016 and December 31, 2017 were as follows (in thousands):
Intangible Assets The following sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of December 31, 2017 and December 31, 2016 for those assets that are not already fully amortized (dollar amounts in thousands):
Changes in intangibles during the two years ended December 31, 2016 and December 31, 2017 were as follows (in thousands):
Assuming no additions, disposals or adjustments are made to the carrying values and/or useful lives of the intangible assets, annual amortization expense on product rights and other related intangibles for each of the following years is estimated to be as follows (in thousands):
*IPR&D amounts are assessed for impairment at least annually and will be amortized once products are approved, including the product's respective manufacturing process approvals, and are not included in the table. The useful lives of the Company’s intangibles is as follows:
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The 1999 Director Stock Option Plan, as amended (the “Director Plan”), provides for the grant of stock options to non-employee directors of the Company at an exercise price equal to the fair market value per share on the date of the grant. As of December 31, 2016, an aggregate of 1,975,000 shares had been approved and authorized for issuance pursuant to the Director Plan, with no change as of December 31, 2017. A total of 2,634,798 options had been granted to non-employee directors as of December 31, 2016, with no change as of December 31, 2017. A total of 807,782 of those options had been forfeited as of December 31, 2016 and returned to the option pool for future issuance, with no change as of December 31, 2017. The options granted under the Director Plan vest in full one year after their respective grant dates and have a maximum term of ten years. As of December 31, 2017 and December 31, 2016, there were 500,000 and 650,000 shares of common stock options outstanding, respectively. As of December 31, 2016, the 147,984 options available were transferred to a plan that has superseded the Director Plan, as discussed further in this section, with no additional options transferred as of December 31, 2017. The 1999 Stock Incentive Plan, as amended (“1999 Plan”), replaced all previously authorized employee stock option plans, and no additional options may be granted under those previous plans. Under the 1999 Plan, options or stock awards may be granted to all of the Company’s employees, officers, directors, consultants and advisors to purchase a maximum of 3,200,000 shares of common stock. However, pursuant to the terms of the 1999 Plan, no awards may be granted after March 16, 2009. A total of 2,892,500 options, having a maximum term of ten years, have been granted at 100% of the fair market value of the Company’s common stock at the date of grant. Options outstanding under the 1999 Plan are generally exercisable in cumulative increments over four years commencing one year from date of grant. On June 26, 2009, the Board of Directors adopted, and the Company’s stockholders subsequently approved by partial written consent, the IGI Laboratories, Inc. 2009 Equity Incentive Plan (the “2009 Plan”). The 2009 Plan became effective on July 29, 2009. The 2009 Plan allows the Company to continue to grant options and restricted stock, as under the 1999 Plan, but also authorizes the Board of Directors to grant a broad range of other equity-based awards, including stock appreciation rights, restricted stock units ("RSUs") and performance awards. The 2009 Plan has been created, pursuant to and consistent with the Company’s current compensation philosophy, to assist the Company in attracting, retaining and rewarding designated employees, directors, consultants and other service providers of the Company and its subsidiaries and affiliates, in a manner that will be cost efficient to the Company from both an economic and financial accounting perspective. On April 12, 2010, the Board of Directors adopted, and the Company’s stockholders subsequently approved, an amendment and restatement of the 2009 Plan to increase the number of shares of Common Stock available for grant under such plan by adding 2,000,000 shares of Common Stock. The 2009 Plan, as amended on May 29, 2010, authorizes up to 5,000,000 shares of the Company’s common stock for issuance pursuant to the terms of the 2009 Plan. The maximum number of shares that may be subject to awards made to any individual in any single calendar year under the 2009 Plan is 1,000,000 shares. As of December 31, 2017, there were 99,626 RSUs outstanding, 1,422,020 shares of stock outstanding and 3,038,634 shares of common stock options outstanding. As of December 31, 2016, there were 179,900 RSUs outstanding, 1,341,746 shares of stock outstanding and 3,216,369 shares of common stock options outstanding. As of December 31, 2016, the 92,883 options available were transferred to a plan that has superseded the 2009 Plan, as discussed further in this section. As of December 31, 2017, an additional 156,169 options available were transferred to the superseded plan. On May 25, 2016, the Board of Directors approved the Company's 2016 Equity Incentive Plan (the "2016 Plan"). The 2016 Plan provides for the issuance of awards of up to 2,000,000 shares of the Company's common stock, plus any shares of common stock that are represented by awards granted under our Director Plan and 2009 Plan that are forfeited, expire or are canceled without delivery of shares of common stock or which result in the forfeiture of shares of common stock back to the Company on or after May 25, 2016. Generally, shares of common stock reserved for awards under the 2016 Plan that lapse or are canceled, will be added back to the share reserve available for future awards. However, shares of common stock tendered in payment for an award or shares of common stock withheld for taxes will not be available again for grant. The 2016 Plan provides that no participant may receive awards for more than 1,000,000 shares of common stock in any fiscal year. As the 2016 Plan supersedes both the Director Plan and the 2009 Plan, any available shares from both are now incorporated into the 2016 Plan. As of December 31, 2017, there were 89,003 RSU's outstanding, 20,000 shares of common stock outstanding and options to purchase 761,176 shares of common stock outstanding under the 2016 Plan. As compared to 2017, as of December 31, 2016, there were 20,000 shares of common stock outstanding and options to purchase 239,000 shares of common stock outstanding under the 2016 Plan. As of December 31, 2017 and December 31, 2016, there were a total of 1,526,857 shares of common stock and 1,981,867 shares of common stock available under the 2016 Plan. As of December 31, 2017 and December 31, 2016, there were options to purchase 4,299,810 shares of common stock and 4,105,369 shares of common stock outstanding, respectively, collectively in the Director Plan, 2009 Plan, and the 2016 Plan. In the interest of maintaining consistency with the Company's 2016 Equity Incentive Plan, on March 13, 2017, the Company entered into (i) an amendment to the option agreements governing each option grant currently outstanding under the Company's 2009 Equity Incentive Plan, and (ii) an amendment to the restricted stock unit, or RSU, agreements governing each RSU grant currently outstanding under the 2009 Plan. The amendments provide for the automatic vesting upon a change of control of the Company of each option grant and RSU grant, as applicable, outstanding under the 2009 Plan. The amendments had a de minimis value to the holders as of December 31, 2017, and therefore no additional stock compensation expense was recognized. The forms of amendment are Exhibits 10.31 and 10.32, respectively, and are incorporated by reference herein. Stock Options The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing formula that uses assumptions noted in the following table. Expected volatilities and risk-free interest rates are based upon the expected life of the grant.
Estimated volatility was calculated using the historical volatility of the Company’s stock over the expected life of the options. The expected life of the options was estimated based on the Company’s historical data. The risk free interest rate is based on U.S. Treasury yields for securities with terms approximating the terms of the grants. Forfeitures are recognized in the period they occur. The assumptions used in the Black-Scholes option valuation model are highly subjective, and can materially affect the resulting valuation. Stock option transactions in each of the past three years under the aforementioned plans in total were:
The following table summarizes information concerning outstanding and exercisable options as of December 31, 2017:
The following table summarizes information concerning outstanding and exercisable options as of December 31, 2016:
The following table summarizes information concerning outstanding and exercisable options as of December 31, 2015:
The Company has recorded an aggregate of $2.3 million, $2.3 million and $1.7 million related to its stock option based expenses in cost of sales, product development and research expenses, and selling, general and administrative expenses on the accompanying Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015, respectively. The aggregate intrinsic value of options outstanding was $4.7 million at December 31, 2017, $11.5 million at December 31, 2016 and $17.4 million at December 31, 2015. The aggregate intrinsic value of the options exercisable was $4.7 million at December 31, 2017, $11.3 million at December 31, 2016 and $16.3 million at December 31, 2015. The total intrinsic value of the options exercised during 2017, 2016 and 2015 was $0.4 million, $0.3 million and $0.6 million, respectively. A summary of non-vested options at December 31, 2017 and changes during the year ended December 31, 2017 is presented below:
As of December 31, 2017, there was $2.3 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements under the Plan. The costs will be recognized through December 2019. Restricted Stock and RSUs The Company periodically grants restricted stock and RSU awards to certain officers and other employees that typically vest one to three years from their grant date. On December 30, 2013, in accordance with the terms of the employment agreement between Jason Grenfell-Gardner, President and CEO, and the Company executed on July 30, 2012, a restricted stock award in the amount of 325,000 shares was granted to Jason Grenfell-Gardner, with one third of the shares of restricted stock vested on December 31, 2013, and the remaining two thirds of the shares of restricted stock vesting in equal amounts on July 30, 2014 and July 30, 2015. The Company recognized $1 million, $0.8 million and $0.6 million, respectively, of compensation expense during the years ended December 31, 2017, 2016 and 2015 related to restricted stock awards and RSUs. Stock compensation expense is recognized over the vesting period of the restricted stock and RSUs. At December 31, 2017, the Company had approximately $0.7 million of total unrecognized compensation cost related to non-vested restricted stock and RSUs, all of which will be recognized through April 2020. A summary of non-vested shares of restricted stock and changes during each of the past three years is as follows:
There have been no restricted stock issuances in the year ended 2016 or 2017. A summary of non-vested RSUs and changes during each of the past three years is as follows:
There was no RSU activity for the year ended December 31, 2015. |
Accrued Expenses (Notes) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses Accrued expenses represent various obligations of the Company including certain operating expenses and taxes payable. For the fiscal years ended December 31, 2017, and 2016 the largest components of accrued expenses were:
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes On December 22, 2017, the President signed into law the United States Tax Cuts and Jobs Act (U.S. TCJA) significantly revising the Internal Revenue Code of 1986, as amended. The U.S. TCJA includes, among other items, (1) a permanent reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%; (2) limitations on the tax deduction for net interest expense to 30% of adjusted earnings’ (3) a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (4) a shift of the U.S. taxation of multinational corporations from a tax on worldwide income to a territorial system; (5) elimination of the Alternative Minimum Tax regulations; (6) recovery of Alternative Minimum Tax Credits over a five year period; and (7) modifying or repealing many other business deductions and credits. The Company has assessed the impacts of the changes resulting from the U.S. TCJA and has recognized an income tax benefit and a corresponding receivable of $73 thousand related to the recoverability of Alternative Minimum Tax Credits. Deferred tax assets, liabilities and valuation allowances have been remeasured at the new rate of 21%. There was no income impact from the remeasurement since all U.S. net deferred tax assets are fully reserved by the Company. At present, we do not estimate any material impacts from the repatriation tax. While we have completed our provisional analysis of the income tax effects of the U.S.TCJA, the related tax effects may need to be adjusted, possibly materially, due to further refinement of our calculations, changes in interpretations and assumptions that we have made, additional guidance that may be issued by regulatory bodies, and actions and related accounting policy decision we may take as a result of the new legislation. We will complete our analysis over the one-year measurement period from the enactment of the law as provided for by SAB 118, and any adjustments during this measurement period will be included in net earnings from continuing operations as an adjustment to income tax expense in the reporting period(s) when such adjustments are determined. The Company is subject to U.S. federal income tax and files a consolidated federal income tax return which includes all eligible U.S. subsidiary companies. The Company is also subject to tax in the states of Alabama, Illinois, Montana, New Jersey and Tennessee. During the year ended December 31, 2016, the Company began significant operations in certain foreign countries and is, accordingly, subject to tax in those foreign jurisdictions consisting of Canada (including the province of Ontario), Estonia, Luxembourg and Jersey. Income (Loss) before income tax for the years ended December 31, 2017, 2016 and 2015 consisted of the following (in thousands):
The Company’s current tax (benefit) expense was $(85,000), $287,000 and $35,000 for the years ended December 31, 2017, 2016 and 2015, respectively. The (credit) provision for income taxes attributable to continuing operations before income taxes for the years ended December 31, 2017, 2016 and 2015 is as follows (in thousands):
The (benefit from) provision for income taxes differed from the amount of income taxes determined by applying the applicable federal tax rate (34%) to pretax income (loss) from continuing operations as a result of the following (in thousands):
Deferred tax balances included in the Consolidated Balance Sheets as of December 31, 2017 and 2016 consisted of the following:
The Company evaluates the recoverability of its deferred tax assets based on its history of operating results, its expectations for the future, and the expiration dates of the net operating loss carry forwards. Based on the preponderance of the evidence, the Company has concluded that it is more likely than not that it will be unable to realize the net deferred tax assets in the immediate future and has established a full valuation allowance for substantially all deferred tax assets. Accordingly, the Company has provided a valuation allowance of $13.3 million and $15.3 million for the years ended December 31, 2017 and 2016, respectively, on its deferred tax assets. The change in the valuation allowance during the year 2017 was $1.9 million, as follows:
Operating loss and tax credit carry forwards as of December 31, 2017 were as follows:
At December 31, 2017, the Company’s U.S. federal net operating loss carryforwards will expire as follows:
The Company’s ability to use net operating loss carry forwards is subject to substantial limitation in future periods under certain provisions of Section 382 of the Internal Revenue Code of 1986, as amended, which limit the utilization of net operating losses upon a more than 50% change in ownership of the Company’s stock that is held by 5% or greater stockholders. The Company examined the application of Section 382 with respect to an ownership change that took place during 2010, as well as the limitation on the application of net operating loss carry forwards. The Company believes that operating losses subsequent to the change date in 2010 (aggregating $23.1 million) are not subject to Section 382 limitations. The Company has estimated that the annual limitation starting in 2010 aggregates from $1.0 million to $2.3 million per year including the effect of amortization of built in gains. The Company's loss carryforwards may be further limited in the future if additional ownership changes occur. The Company is subject to the provisions of ASC 740-10-25, Income Taxes (ASC 740). ASC 740 prescribes a more likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company undergoes a process to evaluate whether income tax accruals are in accordance with ASC 740 guidance on uncertain tax positions. Federal income tax returns for the years 2014 and 2015 have been examined by the U.S. Internal Revenue Service without any income tax expense consequences. For federal purposes (except for the years 2014 and 2015), post 1998 tax years remain open to examination as a result of net operating loss carryforwards. The Company is currently open to audit by the appropriate state income taxing authorities for tax years 2013 through 2016. The Company has not recorded any liability for uncertain tax positions at December 31, 2017 or December 31, 2016. |
Commitments |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Commitments | Commitments The Company’s commitments and contingencies consisted of operating leases for warehouse and office space and equipment. Future minimum lease payments under non-cancelable operating leases are as follows ($ in thousands):
Rent expense was $0.5 million, $0.9 million and $0.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. The Company has certain licensing and development agreement in place under which the Company will pay certain licensing fees and milestones over the lives of certain projects. These commitments totaled approximately $2.4 million as of December 31, 2017, and will be paid over the next several years in accordance with agreed upon milestones. |
Legal and U.S. Regulatory Proceedings |
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Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal and U.S. Regulatory Proceedings | Legal and U.S. Regulatory Proceedings On March 2, 2001, the Company became aware of environmental contamination resulting from an unknown heating oil leak at its former manufacturing facility. The Company immediately notified the New Jersey Department of Environmental Protection (“NJ DEP”) and the local authorities, and hired a contractor to assess the exposure and required clean up. The total estimated costs for the clean-up and remediation is $889,000, of which approximately $118,000 remains accrued as of December 31, 2017. Based on information provided to the Company from its environmental consultant and what is known to date, the Company believes the reserve is sufficient for the remaining remediation of the environmental contamination. There is a possibility, however, that the remediation costs may exceed the Company’s estimates. The restricted cash, included in other assets on the Consolidated Balance Sheet of $120,000 as of December 31, 2017 and $122,000 as of December 31, 2016 represents a restricted escrow account set up on the requirement of the NJ DEP for the soil remediation work. These funds will be released to the Company upon the NJ DEP’s approval when the remediation is completed. On December 19, 2013, the Company filed a complaint in the United States District Court for the District of Delaware against Mallinckrodt LLC, Mallinckrodt, Inc. and Nuvo Research Inc., collectively refer to as Mallinckrodt, seeking a declaration of non-infringement of United States Patent Nos. 8,217,078 and 8,546,450 so that the Company can bring our generic diclofenac sodium topical solution 1.5% to market at the earliest possible date under applicable statutory and FDA regulatory provisions. On January 10, 2014, Mallinckrodt filed an answer and counterclaim alleging that the Company infringed the patents at issue. On June 26, 2014, the Company entered into a settlement agreement with Mallinckrodt, pursuant to which Mallinckrodt granted us a non-exclusive license to launch the Company’s diclofenac sodium topical solution 1.5% product on March 28, 2015. There was no material impact on the Company’s financial statements as a result of the settlement. We received approval to sell the diclofenac sodium topical solution 1.5% from the FDA in July 2015. On May 21, 2015, Horizon Pharma Ireland Limited, HZNP Limited and Horizon Pharma USA, Inc. (collectively, “Horizon”) filed a complaint in the United States District Court for the District of New Jersey against the Company alleging infringement of certain United States patents based upon our submission to the FDA of an Abbreviated New Drug Application (“ANDA”) seeking FDA approval to market diclofenac topical solution 2% w/w before the expiration of the patents asserted in the complaint. On June 30, 2015, August 11, 2015, September 17, 2015, October 27, 2015 and February 5, 2016, Horizon filed additional complaints in the United States District Court for the District of New Jersey against the Company alleging infringement of other of its United States patents in relation to the Company’s submission of the same ANDA. On July 21, 2015, September 11, 2015, October 6, 2015, October 21, 2015 and December 17, 2015, and March 17, 2016 the Company filed answers, affirmative defenses and counterclaims with respect to the complaints filed by Horizon. In those filings, the Company asserted that the patents alleged to be infringed in the complaints filed by Horizon are invalid and not infringed by us. On April 27, 2016, Horizon and the Company filed a stipulation of dismissal to dismiss the cases. The court entered an order dismissing the cases on May 2, 2016. On May 9, 2016, Horizon and the Company entered into a settlement agreement. Under the settlement agreement, the Company obtained a license to market diclofenac topical solution 2% no later than January 10, 2029 or earlier in certain circumstances, including the resolution by settlement or court decision of other third party litigation involving diclofenac topical solution 2% or the market entry by other third party generic versions of diclofenac topical solution 2%. At this time, the Company cannot estimate if or when any of those earlier events might occur. No consideration was exchanged as part of the settlement. The Company has not recorded accruals related to this case and has not yet received final approval. On December 4, 2015, Galderma Laboratories, L.P. and Galderma S.A. (collectively, “Galderma”) filed a complaint in the United States District Court for the Northern District of Texas against the Company alleging infringement of United States Patent No. 6,106,848 based upon the Company’s submission to the FDA of an ANDA seeking FDA approval to market clobetasol propionate lotion 0.05% before the expiration patent asserted in the complaint. On January 5, 2016, Galderma and the Company entered into a Settlement and License Agreement the terms of which are confidential. On January 22, 2016, the case was dismissed with prejudice. To date, twelve putative class action antitrust lawsuits have been filed against Teligent Inc. along with co-defendants including Taro Pharmaceuticals U.S.A., Inc. and Perrigo New York Inc. One “opt-out” action has additionally been filed against the Company along with thirty-five generic manufacturer co-defendants regarding the pricing of econazole nitrate cream and twenty-nine additional drug products not manufactured or sold by the Company. All actions have been transferred by the Judicial Panel on Multidistrict Litigation to the Eastern District of Pennsylvania for pre-trial proceedings as part of the In re Generic Pharmaceuticals Pricing Antitrust Litigation matter, and the class actions have been consolidated into direct purchaser, end payer and indirect reseller actions. The class plaintiffs seek to represent nationwide or state classes consisting of persons who directly purchased, indirectly purchased or reimbursed patients for the purchase of generic econazole from any of the defendants from June 1, 2014 until the time the defendants’ allegedly unlawful conduct ceased or will cease. The case plaintiffs allege a conspiracy to fix prices for generic econazole, in violation of federal antitrust laws or state antitrust, consumer protection, and other laws. The case plaintiffs seek treble damages for alleged price overcharges for generic econazole during the alleged period of conspiracy, and the end payer and indirect purchaser class plaintiffs seek injunctive relief against the defendants. The opt-out plaintiffs allege a conspiracy by thirty-six generic manufacturers, including the Company, to fix prices for thirty drug products including econazole nitrate cream, in violation of federal antitrust laws. The opt-out plaintiffs seek treble damages for alleged price overcharges for the thirty drug products identified in the complaint during the alleged period of conspiracy, and also seek injunctive relief against the defendants. All of these cases are in their initial stages and motions to dismiss have been filed with respect to each of the complaints. Due to the early stage of these cases, we are unable to form a judgment at this time as to whether an unfavorable outcome is either probable or remote or to provide an estimate of the amount or range of potential loss. We believe these cases are without merit, and we intend to vigorously defend against these claims. On October 20, 2017, a Demand for Arbitration was filed with the American Arbitration Association by Stayma Consulting Services, Inc. (“Stayma”) against the Company regarding the Company’s development and manufacture for Stayma of two generic drug products, one a lotion and one a cream, containing 0.05% of the active pharmaceutical ingredient flurandrenolide. The Company developed the two products and Stayma purchased commercial quantities of each; however, Stayma now alleges that the Company breached agreements between the parties by developing an additional and different generic drug product, an ointment, containing flurandrenolide, and failing to meet certain contractual requirements. Stayma seeks monetary damages. Due to the early stage of this matter, we are unable to form a judgment at this time as to whether an unfavorable outcome is either probable or remote or to provide an estimate of the amount or range of potential loss. We believe this case is without merit, and we intend to vigorously defend against these claims. We filed a counter-claim against Stayma for its failure to pay several past due invoices of approximately $1.7 million relating to the development and commercial supply of the two subject products. |
Employee Benefits |
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Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits The Company has a 401(k) contribution plan, pursuant to which employees may elect to contribute to the plan, in whole percentages, up to 100% of compensation. Employees’ contributions are subject to a minimum contribution by participants of 1% of compensation and a maximum contribution of $18,000 for 2017, $18,000 for 2016 and $18,000 for 2015, plus a catch-up contribution of up to $6,000 for 2017, $6,000 for 2016 and $6,000 for 2015, if a participant qualifies. The Company matches 100% of the first 3% of compensation contributed by participants and 50% of the next 2% of compensation contributed by participants. The Company contribution is in the form of cash, which is vested immediately. The Company has recorded charges to expense related to this plan of approximately $311,467, $228,619 and $172,965 in 2017, 2016 and 2015, respectively. |
Quarterly Results (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Results (Unaudited) | Quarterly Results (Unaudited) The following is a summary of certain quarterly financial information for the fiscal years 2017 and 2016:
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SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS |
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Schedule of Valuation and Qualifying Accounts Disclosure | SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (in thousands)
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||
Nature of Business | Nature of the Business Teligent, Inc. is a Delaware corporation incorporated in 1977 and is a specialty generic pharmaceutical company. Under its own label, the Company markets and sells generic topical and branded generic and generic injectable pharmaceutical products in the United States and Canada. In the United States, the Company currently markets 25 generic topical pharmaceutical products and four branded generic pharmaceutical products. In Canada, the Company sells over 30 generic and branded generic injectable products and medical devices. Generic pharmaceutical products are bioequivalent to their brand name counterparts. The Company also provides contract manufacturing services to the pharmaceutical, over-the-counter, ("OTC"), and cosmetic markets. The Company operates its business under one segment. Our common stock is trading on the NASDAQ Global Select Market, under the trading symbol “TLGT.” Teligent also develops, manufactures, fills, and packages topical semi-solid and liquid products for branded and generic pharmaceutical customers, as well as the OTC and cosmetic markets. These products are used in a wide range of applications from cosmetics and cosmeceuticals to the prescription treatment of conditions like dermatitis, psoriasis, and eczema. Teligent has continued to make progress on its facility expansion in Buena, New Jersey, to support the increased capacity demand expected from future product approvals from the FDA. As the Company continues to execute the expansion of our development and commercial base beyond topical generics to include injectable generics, complex generics and ophthalmic generics (what we call our “TICO strategy”), it will compete in other markets, including the ophthalmic generic pharmaceutical market, and expects to face other competitors. |
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Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Teligent, Inc. and its wholly-owned and majority-owned subsidiaries. All inter-company accounts and transactions have been eliminated. The Company consolidated the following entities: Igen, Inc., Teligent Pharma. Inc., Teligent Luxembourg S.à.r.l., Teligent OÜ, Teligent Canada Inc., and Teligent Jersey Limited., in addition to the following inactive entities: Microburst Energy, Inc., Blood Cells, Inc. and Flavorsome, Ltd. |
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Cash Equivalents | Cash Equivalents Cash equivalents include cash on hand and money market funds. The carrying amounts approximate the fair value due to the short term maturity of these investments. Money market funds are short-term investments, which have original maturities of 90 days or less. These include direct obligations of the U.S. Treasury, including bills, notes and bonds, as well as obligations issued or guaranteed by agencies or instrumentalities of the U.S. government including government-sponsored enterprises, or GSEs. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, trade receivables, restricted cash, notes payable, accounts payable and other accrued liabilities at December 31, 2017 approximate their fair value for all periods presented. The Company measures fair value in accordance with ASC 820-10, “Fair Value Measurements and Disclosures”. ASC 820-10 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. |
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Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company extends credit to its contract services customers based upon credit evaluations in the normal course of business, primarily with 30-day terms. The Company does not require collateral from its customers. Bad debt provisions are provided for on the allowance method based on historical experience and management’s evaluation of outstanding accounts receivable. The Company reviews the allowance for doubtful accounts regularly, and past due balances are reviewed individually for collectability. The Company charges off uncollectible receivables against the allowance when the likelihood of collection is remote. The Company extends credit to wholesaler and distributor customers and national retail chain customers, based upon credit evaluations, in the normal course of business, primarily with 60 to 90 day terms. The Company maintains customer-related accruals and allowances that consist primarily of chargebacks, rebates, sales returns, shelf stock allowances, administrative fees and other incentive programs. Some of these adjustments relate specifically to the generic prescription pharmaceutical business. Typically, the aggregate gross-to-net adjustments related to these customers can exceed 70% of the gross sales through this distribution channel. Certain of these accruals and allowances are recorded in the balance sheet as current liabilities and others are recorded as a reduction to accounts receivable. |
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Revenue Recognition | Revenue Recognition The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement, delivery has occurred or contractual services rendered, the sales price is fixed or determinable, and collection is reasonably assured in conformity with ASC 605, Revenue Recognition. The Company derives its revenues from three basic types of transactions: sales of its own generic pharmaceutical topical products, sales of manufactured product for its customers included in product sales, and research and product development services and other services performed for third parties. Due to differences in the substance of these transaction types, the transactions require, and the Company utilizes, different revenue recognition policies for each. Product Sales: Product Sales, net, include Company Product Sales and Contract Manufacturing Sales. Company Product Sales: The Company records revenue from Company product sales when title and risk of ownership have been transferred to the customer, which is typically upon delivery of products to the customer. Revenue and Provision for Sales Returns and Allowances As is customary in the pharmaceutical industry, the Company’s gross product sales from Company label products are subject to a variety of deductions in arriving at reported net product sales. When the Company recognizes revenue from the sale of products, an estimate of sales returns and allowances (“SRA”) is recorded, which reduces product sales. Accounts receivable and/or accrued expenses are also reduced and/or increased by the SRA amount. These adjustments include estimates for chargebacks, rebates, cash discounts and returns and other allowances. These provisions are estimates based on historical payment experience, historical relationship to revenues, estimated customer inventory levels and current contract sales terms with direct and indirect customers. The estimation process used to determine our SRA provision has been applied on a consistent basis and no material adjustments have been necessary to increase or decrease our reserves for SRA as a result of a significant change in underlying estimates. The Company will use a variety of methods to assess the adequacy of our SRA reserves to ensure that our financial statements are fairly stated. These will include periodic reviews of customer inventory data, customer contract programs, subsequent actual payment experience, and product pricing trends to analyze and validate the SRA reserves. The provision for chargebacks is our most significant sales allowance. A chargeback represents an amount payable in the future to a wholesaler for the difference between the invoice price paid to the Company by our wholesale customer for a particular product and the negotiated contract price that the wholesaler’s customer pays for that product. The Company’s chargeback provision and related reserve varies with changes in product mix, changes in customer pricing and changes to estimated wholesaler inventories. The provision for chargebacks also takes into account an estimate of the expected wholesaler sell-through levels to indirect customers at contract prices. The Company will validate the chargeback accrual quarterly through a review of the inventory reports obtained from our largest wholesale customers. This customer inventory information is used to verify the estimated liability for future chargeback claims based on historical chargeback and contract rates. These large wholesalers represent 90% - 95% of the Company’s chargeback payments. The Company continually monitors current pricing trends and wholesaler inventory levels to ensure the liability for future chargebacks is fairly stated. Net revenues and accounts receivable balances in the Company’s consolidated financial statements are presented net of SRA estimates. Certain SRA balances are included in accounts payable and accrued expenses. Accounts receivable are presented net of SRA balances of $28.5 million and $41.5 million at December 31, 2017 and 2016, respectively. Accounts payable and accrued expenses include $7.0 million and 3.5 million at December 31, 2017 and 2016, respectively, for certain fees related to services provided by the wholesalers. Wholesale fees of $7.0 million, $3.7 million and $6.3 million for the years ended December 31, 2017, 2016 and 2015, respectively, were included in cost of goods sold. In addition, in connection with four of the 29 products the Company currently manufactures, markets and distributes in its own label in the U.S., in accordance with an agreement entered into in December of 2011, the Company is required to pay a royalty calculated based on net sales to one of its pharmaceutical partners. The royalty is calculated based on contracted terms of 40% of net sales for the four products, which is to be paid quarterly to the pharmaceutical partner that the agreement is with. In accordance with the agreement, net sales exclude fees related to services provided by the wholesalers. Accounts payable and accrued expenses include $0.9 million and $0.8 million at December 31, 2017 and 2016, respectively, related to these royalties. Royalty expense of $2.2 million, $3.0 million and $3.6 million was included in cost of goods sold for the years ended December 31, 2017, 2016, and 2015 respectively. The Company includes significant estimates to arrive at net product sales arising from wholesaler chargebacks, Medicaid and Medicare rebates, allowances and other pricing and promotional programs. Contract Manufacturing Sales: The Company recognizes revenue when title transfers to its customers, which is generally upon shipment of products. These shipments are made in accordance with sales commitments and related sales orders entered into with customers either verbally or in written form. The revenues associated with these transactions, net of appropriate cash discounts, product returns and sales reserves, are recorded upon shipment of the products and are included in product sales, net on the Company's Consolidated Statement of Operations. Research and Development Income: The Company establishes agreed upon product development agreements with its customers to perform product development services. Product development revenues are recognized in accordance with the product development agreement upon the completion of the phases of development and when the Company has no future performance obligations relating to that phase of development. Revenue recognition requires the Company to assess progress against contracted obligations to assure completion of each stage. These payments are generally non-refundable and are reported as deferred until they are recognizable as revenue. If no such arrangement exists, product development fees are recognized ratably over the entire period during which the services are performed. Other types of revenue include royalty or licensing revenue, and would be recognized based upon the contractual agreement upon completion of the earnings process. In making such assessments, judgments are required to evaluate contingencies such as potential variances in schedule and the costs, the impact of change orders, liability claims, contract disputes and achievement of contractual performance standards. Changes in total estimated contract cost and losses, if any, are recognized in the period they are determined. Billings on research and development contracts are typically based upon terms agreed upon by the Company and customer and are stated in the contracts themselves and do not always align with the revenues recognized by the Company. |
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Concentration of Risk | Concentration of Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash equivalents and trade receivables. These include direct obligations of the U.S. Treasury, including bills, notes and bonds, as well as obligations issued or guaranteed by agencies or instrumentalities of the U.S. government including GSEs, which are not federally insured. The Company maintains its cash in accounts with quality financial institutions. Although the Company currently believes that the financial institutions with which the Company does business will be able to fulfill their commitments to us, there is no assurance that those institutions will be able to continue to do so. |
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Inventories | Inventories Inventories are valued at the lower of cost, using the first-in, first-out (“FIFO”) method, or market. The Company records an inventory reserve for losses associated with dated, expired, excess and obsolete raw materials. This reserve is based on management’s current knowledge with respect to inventory levels, planned production, and extension capabilities of materials on hand. Management does not believe the Company’s inventory is subject to significant risk of obsolescence in the near term. |
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Property, Plant and Equipment | Property, Plant and Equipment Depreciation and amortization of property, plant and equipment is provided for under the straight-line method over the assets’ estimated useful lives as follows:
Leasehold improvements are amortized over the shorter of estimated useful life or the lease term. Repair and maintenance costs are charged to operations as incurred while major improvements are capitalized. Construction in progress ("CIP") costs are amortized based on the asset class when they are put into service. When assets are retired or disposed, the related cost and accumulated depreciation thereon are removed and any gains or losses are included in operating results. |
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Intangible Assets | Intangible Assets Definite-lived intangible assets are stated at cost less accumulated amortization. Amortization of definite-lived intangible assets is computed on a straight-line basis over the assets’ estimated useful lives, generally for periods ranging from 10 to 15 years. The Company continually evaluates the reasonableness of the useful lives of these assets. Indefinite-lived intangible assets are not amortized, but instead are tested at least annually for impairment. Costs to renew or extend the term of a recognized intangible asset are expensed as incurred. An impairment is recognized in the amount, if any, by which the carrying amount of such assets exceeds their respective fair values and would be recorded in the selling, general and administrative expense on the Consolidated Statements of Operations. |
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In-Process Research and Development | In-Process Research and Development Amounts allocated to in-process research and development (“IPR&D”) in connection with a business combination are recorded at fair value and are considered indefinite-lived intangible assets subject to the impairment testing in accordance with the Company’s impairment testing policy for indefinite-lived intangible assets. As products in development are approved for sale, amounts will be allocated to product rights and will be amortized over their estimated useful lives. These valuations reflect, among other things, the impact of changes to the development programs, the projected development and regulatory time frames and the current competitive environment. Changes in any of the Company’s assumptions may result in a reduction to the estimated fair value of the IPR&D asset and could result in future impairment charges. |
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Long-Lived Assets | Long-Lived Assets In accordance with the provisions of ASC 360-10-55, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. In performing such review for recoverability, the Company compares expected future cash flows of assets to the carrying value of the long-lived assets and related identifiable intangibles. If the expected future cash flows (undiscounted) are less than the carrying amount of such assets, the Company recognizes an impairment loss for the difference between the carrying value of the assets and their estimated fair value, with fair values being determined using projected discounted cash flows at the lowest level of cash flows identifiable in relation to the assets being reviewed. As of December 31, 2017, no impairments existed. |
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Goodwill | Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is tested for impairment on an annual basis during the fourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company first performs a qualitative assessment to determine if the quantitative impairment test is required. If changes in circumstances indicate an asset may be impaired, the Company performs the quantitative impairment test. In accordance with accounting standards, a two-step quantitative method is used for determining goodwill impairment. In the first step, the Company determines the fair value. If the net book value exceeds its fair value, the second step of the impairment test which requires allocation of the fair value to all of its assets and liabilities using the acquisition method prescribed under authoritative guidance for business combinations would then be performed. Any residual fair value is allocated to goodwill. An impairment charge is recognized only if the implied fair value of our reporting unit’s goodwill is less than its carrying amount. |
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Acquisitions | Acquisitions The Company accounts for acquired businesses using the acquisition method of accounting, which requires with limited exceptions, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When net assets that do not constitute a business are acquired, no goodwill is recognized. Contingent consideration, if any, is included as part of the acquisition cost and is recognized at fair value as of the acquisition date. Any liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. These changes in fair value are recognized in earnings. |
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Foreign Currency Translation | Foreign Currency Translation The net assets of international subsidiaries where the local currencies have been determined to be the functional currencies are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation account, which is included in accumulated other comprehensive income (loss) (AOCI) and reflected as a separate component of equity. For those subsidiaries where the U.S. dollar has been determined to be the functional currency, non-monetary foreign currency assets and liabilities are translated using historical rates, while monetary assets and liabilities are translated at current rates, with the U.S. dollar effects of rate changes included in Other (income) expense, net. Foreign exchange gain of $7.7 million was recorded for the year ended December 31, 2017, primarily related to the foreign currency translation of our intercompany loans denominated in U.S. dollars to our foreign subsidiaries. These loans are to be repaid in November 2022. Depending on the changes in foreign currency exchange rates, we will continue to record a non-cash gain or loss on translation for the remainder of the term of these loans. Due to the nature of this transaction, there is no economic benefit to the Company to hedge this transaction. |
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Accounting for Environmental Costs | Accounting for Environmental Costs Accruals for environmental remediation are recorded when it is probable a liability has been incurred and costs are reasonably estimable. The estimated liabilities are recorded at undiscounted amounts. Environmental insurance recoveries are included in the statement of operations in the year in which the issue is resolved through settlement or other appropriate legal process. |
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Income Taxes | Income Taxes The Company records income taxes in accordance with ASC 740-10, “Accounting for Income Taxes,” under the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to operating loss and tax credit carry forwards and differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded based on a determination of the ultimate realizability of future deferred tax assets. The Company complies with the provisions of ASC 740-10-25 that clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with ASC 740-10, “Accounting for Income Taxes,” and prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. There were no unrecognized tax benefits as of the date of adoption. As such, there are no unrecognized tax benefits included in the balance sheet that would, if recognized, affect the effective tax rate. The Company records interest and penalties relating to uncertain tax positions as a component of income tax expense. |
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Stock-Based Compensation | Stock-Based Compensation ASC 718-10 defines the fair-value-based method of accounting for stock-based employee compensation plans and transactions used by the Company to account for its issuances of equity instruments to record compensation cost for stock-based employee compensation plans at fair value as well as to acquire goods or services from non-employees. Transactions in which the Company issues stock-based compensation to employees, directors and advisors and for goods or services received from non-employees are accounted for based on the fair value of the equity instruments issued. The Company utilizes pricing models in determining the fair values of options, RSU's and warrants issued as stock-based compensation. These pricing models utilize the market price of the Company’s common stock and the exercise price of the option or warrant, as well as time value and volatility factors underlying the positions. Stock-based compensation expense is recognized over the requisite service period of the award, which usually coincides with the vesting period of the grant. |
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Debt Issuance Costs | Debt Issuance Costs Expenses related to debt financing activities are capitalized and amortized on an effective interest method, over the term of the loan. For more details, refer to Note 5. ASU 2015-3 specifies that debt issuance costs are to be netted against the carrying value of the financial liability. Under prior guidance, debt issuance costs were recognized as a deferred charge and reported as a separate asset on the balance sheet. The updated guidance aligns the treatment of debt issuance costs and debt discounts in that both reduce the carrying value of the liability. Amortization of debt issuance costs is to be recorded as interest expense on the income statement. |
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Product Development and Research | Product Development and Research The Company’s research and development costs are expensed as incurred. |
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Shipping and Handling Costs | Shipping and Handling Costs Costs related to shipping and handling is comprised of outbound freight and the associated labor. These costs are recorded in costs of sales. |
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Earnings (Loss) per Common Share | Earnings (Loss) per Common Share Basic earnings (loss) per share of common stock is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share of common stock is computed using the weighted average number of shares of common stock and potential dilutive common stock equivalents outstanding during the period. Potential dilutive common stock equivalents include shares issuable upon the conversion of the notes and the exercise of options and warrants. Due to the net loss for the years ended December 31, 2017 and 2016, the effect of the Company’s potential dilutive common stock equivalents was anti-dilutive; as a result, the basic and diluted weighted average number of common shares outstanding and net loss per common share are the same. |
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Derivatives | Derivatives The Company accounts for its derivative instruments in accordance with ASC 815-10, “Derivatives and Hedging” (“ASC 815-10”). ASC 815-10 establishes accounting and reporting standards requiring that derivative instruments, including derivative instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at its fair value. ASC 815-10 also requires that changes in the fair value of derivative instruments be recognized currently in results of operations unless specific hedge accounting criteria are met. The Company has not entered into hedging activities to date. The Company’s derivative liability is the embedded convertible option of its Convertible Notes issued December 16, 2014 (as defined in Note 5), which has been recorded as a liability at fair value until May 20, 2015, and was revalued at each reporting date, with changes in the fair value of the instruments included in the consolidated statements of operations as non-operating income (expense). Due to the approval of the sufficient shares at the Company’s annual shareholder meeting, the liability for the embedded derivative was reclassified to equity on May 20, 2015. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the historical valuation of the derivative liability, SRA allowances, allowances for excess and obsolete inventories, allowances for doubtful accounts, provisions for income taxes and related deferred tax asset valuation allowances, stock based compensation, the impairment of long-lived assets (including intangibles, goodwill and property, plant and equipment), property, plant and equipment and legal accruals for environmental cleanup and remediation costs. Actual results could differ from those estimates. |
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Reclassification | Reclassification Certain prior year amounts were reclassified to conform to current year presentation. For the year ended December 31, 2016, the impact of such reclassification of the non-cash portion of the capital expenditures would have been a reduction of both cash from operating activities and cash used in investing activities, in the amount of $1.9 million. |
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Recent Accounting Pronouncements | Adoption of Recent Accounting Pronouncements In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): “Simplifying the Measurement of Inventory”. ASU 2015-11 requires inventory measured using any method other than last-in, first out (“LIFO”) or the retail inventory method to be subsequently measured at the lower of cost or net realizable value, rather than at the lower of cost or market. Under this ASU, subsequent measurement of inventory using the LIFO and retail inventory method is unchanged. ASU 2015-11 is effective prospectively for fiscal years, and for interim periods within those years, beginning after December 15, 2016. The Company's adoption of this ASU, effective January 1, 2017, did not have any significant impact on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): “Improvements to Employee Share-Based Payment Accounting”. The update includes multiple provisions intended to simplify various aspects of the accounting for share-based payments, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has adopted this ASU, effective January 1, 2017, and is recognizing windfall tax benefits in additional paid in capital on a prospective basis. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): “Recognition and Measurement of Financial Assets and Financial Liabilities”. The update supersedes Topic 840, Leases and requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. Topic 842 retains a distinction between finance leases and operating leases, with cash payments from operating leases classified within operating activities in the statement of cash flows. The amendments in this update are effective for fiscal years beginning after December 15, 2018 for public business entities, which for the Company means January 1, 2019. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): "Restricted Cash (a consensus of the FASB Emerging Issues Task Force)". The update addresses the diversity in the industry with respect to classification and presentation of changes in restricted cash on the statement of cash flows. These amendments require that a statement of cash flows explain the restricted cash change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. It affects those reporting entities that are required to evaluate whether they should consolidate a variable interest entity "VIE". The amendments in this update are effective for fiscal years beginning after December 15, 2017 for public business entities, including interim periods within those fiscal years. For the Company, the amendments are effective January 1, 2018. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): “Clarifying the Definition of a Business”. The update clarifies the definition of a business, specifically for companies to better evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For the Company, the amendments are effective January 1, 2018. The Company's adoption of this ASU, is not expected to have any significant impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323): “Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings”. The update shows amendments to two SEC Announcements made late in 2016 regarding four specific standards as follows: ASU 2014-09, Revenue from Contracts with Customers (Topic 606), ASU 2016-02, Leases (Topic 842), ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), and ASU 2014-01, Investments - Equity Method and Joint Ventures (Topic 323). The amendments in this update require changes to the U.S. GAAP Financial Reporting Taxonomy and the changes will be incorporated into the proposed 2018 Taxonomy which are available for public comment and finalized as part of the annual release process. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment”. The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. It affects public entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill. A public entity that is a U.S. Securities and Exchange Commission ("SEC") filer should adopt the amendments in this update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. For the Company, the amendments are effective January 1, 2020. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): “Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets”. This update addresses guidance for partial sales of nonfinancial assets. It affects (i) an entity that enters into a contract to transfer to a customer a nonfinancial asset, group of nonfinancial assets, or ownership interest in a consolidated subsidiary that is not a business or nonprofit entity, (ii) an entity that historically had transactions within the scope of the real estate-specific derecognition guidance, and (iii) an entity that contributes nonfinancial assets that are not a business or a nonprofit activity to a joint venture or other noncontrolled investee. The amendments are effective at the same time as the amendments in ASU 2014-09. Therefore, for the Company, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Public entities may apply the guidance earlier but only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company does not currently expect to enter into any such nonfinancial asset or ownership interest in its consolidated subsidiaries agreements but will refer to the guidance in ASU 2017-05 should that occur. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): “Scope of Modification Accounting”. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments affect any entity that changes the terms or conditions of a share-based payment award. The amendments are effective for fiscal years beginning after December 15, 2017. For the Company, the amendments are effective January 1, 2018. The Company has not made any changes to the terms or conditions of share-based payment awards but will refer to the guidance in ASU 2017-09 should that occur. The Company's adoption of this ASU is not expected to have any significant impact on its consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This guidance is effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The adoption of this guidance is not expected to have a material impact on the Company's Consolidated Financial Statements and related disclosures. Revenue Topic 606 Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The standard, including subsequently issued amendments, will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The key focus of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this key focus, there is a five-step approach outlined in the standard. Entities are permitted to apply the new standard either retrospectively, subject to certain practical expedients, or the modified retrospective method that requires the application of the guidance only to contracts that are uncompleted on the date of initial application. For the Company, Topic 606 and subsequently issued amendments will be effective January 1, 2018. We have performed a comprehensive review of our existing revenue arrangements as of December 31, 2017 following the five-step model. Our analysis indicates that there will be no significant changes to how the amount and timing of revenue will be recognized under the new guidance as compared to existing guidance. Additionally, our analysis indicates that there will be no significant changes to how costs to obtain and fulfill our customer contracts will be recognized under the new guidance as compared to existing guidance. We will adopt this guidance as of January 1, 2018 using the modified retrospective method and we expect that the impact of adoption on our consolidated balance sheet, statement of operations, statement of changes in stockholders’ equity and statement of cash flows will not be material. The adoption of the new guidance will impact the way we analyze, document, and disclose revenue recognition under customer contracts beginning on January 1, 2018; will require reclassification of certain amounts on the balance sheet and will result in additional disclosures in our financial statements. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment | Depreciation and amortization of property, plant and equipment is provided for under the straight-line method over the assets’ estimated useful lives as follows:
Property, plant and equipment, at cost, as of December 31, 2017 and 2016, consisted of:
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Schedule of Earnings Per Share, Basic and Diluted | For the years ended December 31, 2017, 2016 and 2015 (in thousands except shares and per share data)
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Inventories (Tables) |
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Schedule of Inventory | Inventories as of December 31, 2017 and 2016 consisted of:
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Property, Plant and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Depreciation and amortization of property, plant and equipment is provided for under the straight-line method over the assets’ estimated useful lives as follows:
Property, plant and equipment, at cost, as of December 31, 2017 and 2016, consisted of:
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Convertible 3.75% Senior Notes (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible debt | At December 31, 2017 and December 31, 2016, the net carrying amount of the liability component and the remaining unamortized debt discount were as follows:
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Expenses for convertible notes | For the years ended December 31, 2017, December 31, 2016 and December 31, 2015, the Company recorded the following expenses in relation to the Notes:
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Gross-to-Net (Tables) |
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Revenue Recognition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | The Company's gross-to-net adjustments for the three years ended December 31, 2017, 2016 and 2015 are as follows (in thousands):
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Schedule Of Annual Activity Allowance For Customer Deductions Disclosure [Table Text Block] | The annual activity in the Company's allowance for customer deductions and doubtful accounts for the three years ended December 31, 2017, 2016 and 2015 is as follows (in thousands):
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Goodwill and Intangible Assets (Tables) |
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Goodwill | Changes in goodwill during the two years ended December 31, 2016 and December 31, 2017 were as follows (in thousands):
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Finite and Indefinite Lived Intangible Assets | The following sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of December 31, 2017 and December 31, 2016 for those assets that are not already fully amortized (dollar amounts in thousands):
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Changes in Intangible Assets Other Than Goodwill | Changes in intangibles during the two years ended December 31, 2016 and December 31, 2017 were as follows (in thousands):
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Finite-Lived Intangible Assets Future Amortization Expense | Assuming no additions, disposals or adjustments are made to the carrying values and/or useful lives of the intangible assets, annual amortization expense on product rights and other related intangibles for each of the following years is estimated to be as follows (in thousands):
*IPR&D amounts are assessed for impairment at least annually and will be amortized once products are approved, including the product's respective manufacturing process approvals, and are not included in the table |
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Finite-Lived Intangible Assets Useful Lives | The useful lives of the Company’s intangibles is as follows:
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Stock-Based Compensation (Tables) |
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Valuation Assumptions | The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing formula that uses assumptions noted in the following table. Expected volatilities and risk-free interest rates are based upon the expected life of the grant.
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Schedule of Stock Option Transactions | Stock option transactions in each of the past three years under the aforementioned plans in total were:
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Schedule of Outstanding and Exercisable Stock Options | The following table summarizes information concerning outstanding and exercisable options as of December 31, 2017:
The following table summarizes information concerning outstanding and exercisable options as of December 31, 2016:
The following table summarizes information concerning outstanding and exercisable options as of December 31, 2015:
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Nonvested Stock Option Activity | A summary of non-vested options at December 31, 2017 and changes during the year ended December 31, 2017 is presented below:
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Schedule of Nonvested Shares of Restricted Stock | A summary of non-vested shares of restricted stock and changes during each of the past three years is as follows:
There have been no restricted stock issuances in the year ended 2016 or 2017. A summary of non-vested RSUs and changes during each of the past three years is as follows:
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Accrued Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | For the fiscal years ended December 31, 2017, and 2016 the largest components of accrued expenses were:
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss From Continuing Operations | Income (Loss) before income tax for the years ended December 31, 2017, 2016 and 2015 consisted of the following (in thousands):
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Components of Income Tax Expense (Benefit) | The (credit) provision for income taxes attributable to continuing operations before income taxes for the years ended December 31, 2017, 2016 and 2015 is as follows (in thousands):
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Effective Income Tax Rate Reconciliation | The (benefit from) provision for income taxes differed from the amount of income taxes determined by applying the applicable federal tax rate (34%) to pretax income (loss) from continuing operations as a result of the following (in thousands):
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Deferred Tax Assets | Deferred tax balances included in the Consolidated Balance Sheets as of December 31, 2017 and 2016 consisted of the following:
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Valuation Allowance | The change in the valuation allowance during the year 2017 was $1.9 million, as follows:
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Operating Loss and Tax Credit Carryforward | Operating loss and tax credit carry forwards as of December 31, 2017 were as follows:
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Operating Loss Carryforwards Expiration | At December 31, 2017, the Company’s U.S. federal net operating loss carryforwards will expire as follows:
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Commitments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease Payments | Future minimum lease payments under non-cancelable operating leases are as follows ($ in thousands):
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Quarterly Results (Unaudited) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information | The following is a summary of certain quarterly financial information for the fiscal years 2017 and 2016:
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Nature of the Business and Liquidity (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2017
USD ($)
product
segment
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
Business Combination Segment Allocation [Line Items] | ||||
Operating segments | segment | 1 | |||
Cash and cash equivalents | $ | $ 26,692 | $ 66,006 | $ 87,191 | $ 158,883 |
US | ||||
Business Combination Segment Allocation [Line Items] | ||||
Generic products marketed | 25 | |||
Branded generic products marketed | 4 | |||
CANADA | ||||
Business Combination Segment Allocation [Line Items] | ||||
Generic and branded generic products marketed | 30 |
Summary of Significant Accounting Policies (Details 1) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Basic earnings (loss) per share computation: | |||||||||||
Net income (loss) attributable to common stockholders —basic | $ (6,121) | $ (8,982) | $ (919) | $ 831 | $ (5,431) | $ (2,703) | $ (2,901) | $ (950) | $ (15,191) | $ (11,985) | $ 6,668 |
Weighted average common shares —basic (in shares) | 53,323,954 | 53,078,158 | 52,872,814 | ||||||||
Basic (loss) earnings per share (in dollars per share) | $ (0.11) | $ (0.17) | $ (0.02) | $ 0.02 | $ (0.11) | $ (0.05) | $ (0.05) | $ (0.02) | $ (0.28) | $ (0.23) | $ 0.13 |
Dilutive earnings (loss) per share computation: | |||||||||||
Net income (loss) attributable to common stockholders —basic | $ (6,121) | $ (8,982) | $ (919) | $ 831 | $ (5,431) | $ (2,703) | $ (2,901) | $ (950) | $ (15,191) | $ (11,985) | $ 6,668 |
Interest expense related to convertible 3.75% senior notes | 0 | 0 | 5,391 | ||||||||
Amortization of discount related to convertible 3.75% senior notes | 0 | 0 | 6,680 | ||||||||
Change in the fair value of derivative | 0 | 0 | (23,144) | ||||||||
Net loss attributable to common stockholders —diluted | $ (15,191) | $ (11,985) | $ (4,405) | ||||||||
Share Computation: | |||||||||||
Weighted average common shares —basic (in shares) | 53,323,954 | 53,078,158 | 52,872,814 | ||||||||
Effect of convertible 3.75% senior notes (in shares) | 0 | 0 | 12,732,168 | ||||||||
Effect of dilutive stock options and warrants (in shares) | 0 | 0 | 1,507,013 | ||||||||
Weighted average common shares outstanding —diluted (in shares) | 53,323,954 | 53,078,158 | 67,111,995 | ||||||||
Diluted (loss) earnings per share (in dollars per share) | $ (0.11) | $ (0.17) | $ (0.02) | $ 0.02 | $ (0.11) | $ (0.05) | $ (0.05) | $ (0.02) | $ (0.28) | $ (0.23) | $ (0.07) |
Convertible debt | |||||||||||
Share Computation: | |||||||||||
Stated interest rate | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% |
Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 8,231 | $ 6,834 |
Work in progress | 616 | 0 |
Finished goods | 8,532 | 6,284 |
Reserve for obsolescence | (1,304) | (410) |
Total | $ 16,075 | $ 12,708 |
Property, Plant and Equipment (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | $ 76,722 | $ 32,851 |
Less accumulated depreciation and amortization | (8,367) | (6,636) |
Property, plant and equipment, net | 68,355 | 26,215 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | 257 | 257 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | 8,613 | 8,515 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | 9,142 | 7,515 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | 3,244 | 724 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | 449 | 344 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property Plant and Equipment | $ 55,017 | $ 15,496 |
Property, Plant and Equipment (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 1,711 | $ 946 | $ 560 |
Interest costs capitalized | 3,600 | 400 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Payroll | $ 800 | $ 400 |
Convertible 3.75% Senior Notes (Details Textual) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 22, 2014 |
Dec. 16, 2014 |
|
Debt Instrument [Line Items] | |||||
Deferred financing costs | $ 2,300,000 | $ 3,200,000 | |||
Convertible debt | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 3.75% | 3.75% | 3.75% | ||
Remaining discount amortization period | 2 years | ||||
Initial Issuance | Convertible debt | |||||
Debt Instrument [Line Items] | |||||
Face amount of the Notes | $ 125,000,000 | ||||
Additional Principal | Convertible debt | |||||
Debt Instrument [Line Items] | |||||
Face amount of the Notes | $ 18,750,000.00 |
Convertible 3.75% Senior Notes (Details) - USD ($) |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Debt issuance costs | $ 2,300,000 | $ 3,200,000 |
Convertible Notes Payable | ||
Debt Instrument [Line Items] | ||
Face amount of the Notes | 143,750,000 | 143,750,000 |
Unamortized discount | 20,517,000 | 29,160,000 |
Debt issuance costs | 2,256,000 | 3,199,000 |
Carrying amount of the Notes | $ 120,977,000 | $ 111,391,000 |
Convertible 3.75% Senior Notes (Details 1) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Debt Instrument [Line Items] | |||
Debt discount amortization | $ 8,643 | $ 7,599 | $ 6,680 |
Amortization of deferred financing costs | $ 943 | $ 828 | $ 1,132 |
Convertible Notes Payable | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 3.75% | 3.75% | 3.75% |
Interest Expense at 3.75% coupon rate | $ 5,391 | $ 5,391 | $ 5,391 |
Debt discount amortization | 8,643 | 7,599 | 6,680 |
Amortization of deferred financing costs | 942 | 828 | 728 |
Less: capitalized interest and other | (3,778) | (514) | 559 |
Total interest expense | $ 11,198 | $ 13,304 | $ 13,358 |
Gross-to-Net (Details 1) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gross Company product sales | $ 215,883 | $ 217,633 | $ 99,721 |
Reduction to gross product sales: | |||
Chargebacks and billbacks | 125,159 | 141,343 | 50,127 |
Sales discounts and other allowances | 32,720 | 27,419 | 17,974 |
Total reduction to gross product sales | 157,879 | 168,762 | 68,101 |
Company product sales, net | 66,999 | 65,904 | 43,497 |
Company Product | |||
Reduction to gross product sales: | |||
Company product sales, net | 58,004 | 48,871 | 31,620 |
Contract Manufacturing Product | |||
Reduction to gross product sales: | |||
Company product sales, net | $ 8,995 | $ 17,033 | $ 11,877 |
Goodwill and Intangible Assets (Details Textual) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Nov. 13, 2015 |
|
Business Acquisition [Line Items] | ||||
Goodwill | $ 471,000 | $ 446,000 | $ 426,000 | |
Impairment losses | $ 0 | |||
Alveda Acquisition | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 400,000 |
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Goodwill [Roll Forward] | ||
Goodwill beginning balance | $ 446 | $ 426 |
Foreign currency translation | 25 | 20 |
Goodwill ending balance | $ 471 | $ 446 |
Goodwill and Intangible Assets (Details 3) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2018 | $ 2,930 |
2019 | 2,930 |
2020 | 2,930 |
2021 | 2,930 |
2022 | 2,930 |
Thereafter | $ 23,058 |
Goodwill and Intangible Assets (Details 4) |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Trademarks and Technology | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets useful life | 15 years |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets useful life | 10 years |
Stock-Based Compensation (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Stock Based Compensation [Line Items] | |||
Expected dividends | 0.00% | 0.00% | 0.00% |
Risk free rate | 1.56% | 1.14% | 1.11% |
Minimum | |||
Stock Based Compensation [Line Items] | |||
Expected volatility | 58.00% | 68.00% | 52.70% |
Expected term (in years) | 3 years 2 months 12 days | 3 years 1 month 6 days | 3 years 2 months 12 days |
Maximum | |||
Stock Based Compensation [Line Items] | |||
Expected volatility | 69.70% | 71.30% | 68.30% |
Expected term (in years) | 3 years 3 months 18 days | 3 years 3 months 18 days | 3 years 3 months 18 days |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Payables and Accruals [Abstract] | ||
Wholesaler fees | $ 7,044 | $ 3,505 |
Capital expenditures | 1,947 | 2,475 |
Payroll | 1,580 | 1,706 |
Royalties | 856 | 843 |
Studies | 596 | 153 |
Professional fees | 546 | 715 |
Interest expense | 240 | 240 |
Income Tax | 58 | 192 |
Other | 635 | 520 |
Accrued Liabilities | $ 13,502 | $ 10,349 |
Income Taxes (Details Textual) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Examination [Line Items] | |||
Income tax (benefit) expense | $ (85) | $ 287 | $ 35 |
Federal tax rate | 34.00% | ||
Deferred tax assets valuation allowance | $ 13,309 | 15,250 | |
Valuation allowance increase (decrease) | $ (1,900) | ||
Change in ownership percentage (more than) | 50.00% | ||
Stockholder ownership (or greater) | 5.00% | ||
Not Subject to Limitations | |||
Income Tax Examination [Line Items] | |||
Proceeds from sale of operating loss carryforward | $ 23,100 | ||
Subject to Limitations | Minimum | |||
Income Tax Examination [Line Items] | |||
Net operating losses | 1,000 | ||
Subject to Limitations | Maximum | |||
Income Tax Examination [Line Items] | |||
Net operating losses | 2,300 | ||
Alternative Minimum Tax Carryover | |||
Income Tax Examination [Line Items] | |||
U.S. TCJA recovery of alternative minimum tax credits | $ 73 | $ 0 | $ 0 |
Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
U.S. operations | $ (21,938) | $ (9,514) | $ 6,911 |
Foreign operations | 6,662 | (2,184) | (208) |
(Loss) income before income tax expense | $ (15,276) | $ (11,698) | $ 6,703 |
Income Taxes (Details 1) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Current tax expense (benefit): | |||
Federal | $ (86) | $ 26 | $ 0 |
State and local | 20 | 35 | 19 |
Foreign | 42 | 272 | 0 |
Total current tax expense | (24) | 333 | 47 |
Deferred tax expense: | |||
Federal | 0 | 0 | 0 |
State and local | 0 | 0 | 0 |
Foreign | (61) | (46) | (12) |
Total deferred tax expense | (61) | (46) | (12) |
Total income tax (benefit)/expense | $ (85) | $ 287 | $ 35 |
Income Taxes (Details 2) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Contingency [Line Items] | |||
Expected Statutory expense (benefit) | $ (5,195) | $ (3,977) | $ 2,244 |
Gain on derivative and amortization of debt discount | 2,939 | 2,584 | (5,597) |
Other non-deductible expenses | 24 | 63 | 7 |
Change in valuation allowance | (2,012) | 590 | 3,254 |
Reduction in deferred tax assets related to U.S. TCJA rate reduction | 7,504 | 0 | 0 |
Rate differential - foreign vs. US | (2,276) | 822 | 114 |
State income taxes, net of federal benefit | 13 | 23 | 13 |
Federal tax impact of state tax benefit, net | 129 | 154 | 0 |
Prior year true-up | (13) | 0 | 0 |
Exchange gain | (13) | 28 | 0 |
Total income tax (benefit)/expense | (85) | 287 | 35 |
Alternative Minimum Tax Carryover | |||
Income Tax Contingency [Line Items] | |||
U.S. TCJA recovery of alternative minimum tax credits | $ (73) | $ 0 | $ 0 |
Income Taxes (Details 3) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Deferred Tax Assets: | ||
Allowance for doubtful accounts | $ 506 | $ 118 |
Inventory reserve | 619 | 467 |
Accrued expenses | 664 | 831 |
Property, plant and equipment | 214 | 317 |
Tax operating loss carryforwards | 9,327 | 10,962 |
Tax credit carryforwards | 168 | 254 |
Stock compensation | 1,817 | 2,301 |
Total deferred tax assets | 13,315 | 15,250 |
Less valuation allowance | (13,309) | (15,250) |
Net deferred tax assets | 6 | 0 |
Deferred Tax Liabilities: | ||
Intangible assets | (165) | (205) |
Total deferred tax liabilities | 165 | 205 |
Net deferred tax liability | $ (159) | $ (205) |
Income Taxes Income Taxes (Details 4) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Movement in Valuation Allowances and Reserves [Roll Forward] | |
Valuation allowance at beginning of year | $ 15,250 |
Change in accounting for stock compensation windfalls | 1,112 |
Current year operating loss | 3,048 |
Change in tax rate to 21% | (7,504) |
Other | (1,403) |
Valuation allowance at end of year | $ 13,309 |
Income Taxes (Details 5) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $ 41,688 | $ 31,336 |
Research tax credits (expiring through 2025) | 168 | 168 |
Alternative minimum tax credits (available without expiration) | 0 | 86 |
State | Tennessee (expiring in 2032) | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 659 | 529 |
State | New Jersey (expiring in 2037) | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 4,320 | 1,764 |
State | Illinois (expiring in 2037) | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 389 | 222 |
State | Alabama (expiring in 2032) | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 24 | 0 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | $ 255 | $ 232 |
Income Taxes (Details 6) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Income Tax Disclosure [Line Items] | |
Net operating loss | $ 41,688 |
2020 - 2023 | |
Income Tax Disclosure [Line Items] | |
Net operating loss | 8,228 |
2024 - 2029 | |
Income Tax Disclosure [Line Items] | |
Net operating loss | 9,063 |
2030 - 2031 | |
Income Tax Disclosure [Line Items] | |
Net operating loss | 6,205 |
2032 - 2036 | |
Income Tax Disclosure [Line Items] | |
Net operating loss | 10,016 |
2037 | |
Income Tax Disclosure [Line Items] | |
Net operating loss | $ 8,176 |
Commitments (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Maturity | |
2018 | $ 491,000 |
2019 | 436,000 |
2020 | 441,000 |
2021 | 403,000 |
2022 | 327,000 |
2023 | 332,000 |
Thereafter | 83,000 |
Total | $ 2,513,000 |
Commitments (Details Textual) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Leases [Abstract] | |||
Rent expense | $ 0.5 | $ 0.9 | $ 0.4 |
Other commitment | $ 2.4 |
Employee Benefits (Details Textual) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum annual contribution per employee, percent | 100.00% | ||
Minimum annual contribution per employee, percent | 1.00% | ||
Maximum annual contribution per employee | $ 18,000 | $ 18,000 | $ 18,000 |
Cost recognized | 311,467 | 228,619 | 172,965 |
Catchup Contribution Max | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum annual contribution per employee | $ 6,000 | $ 6,000 | $ 6,000 |
Tranche one | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of match | 100.00% | ||
Percentage of participant contribution | 3.00% | ||
Tranche two | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of match | 50.00% | ||
Percentage of participant contribution | 2.00% |
Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues, net | $ 16,101 | $ 12,851 | $ 18,408 | $ 19,891 | $ 17,935 | $ 16,151 | $ 17,138 | $ 15,657 | $ 67,251 | $ 66,881 | $ 44,250 |
Gross profit | 5,863 | 2,538 | 8,037 | 10,934 | 9,162 | 8,014 | 9,556 | 7,955 | 27,372 | 34,687 | |
Operating income (loss) | (4,943) | (8,039) | (1,782) | 2,967 | 326 | 303 | 1,076 | 837 | (11,797) | 2,542 | (3,192) |
Net income (loss) | (6,121) | (8,982) | (919) | 831 | (5,431) | (2,703) | (2,901) | (950) | (15,191) | (11,985) | 6,668 |
Net income (loss) attributable to common stockholders | $ (6,121) | $ (8,982) | $ (919) | $ 831 | $ (5,431) | $ (2,703) | $ (2,901) | $ (950) | $ (15,191) | $ (11,985) | $ 6,668 |
Basic net income (loss) per share (in dollars per share) | $ (0.11) | $ (0.17) | $ (0.02) | $ 0.02 | $ (0.11) | $ (0.05) | $ (0.05) | $ (0.02) | $ (0.28) | $ (0.23) | $ 0.13 |
Diluted net income (loss) per share (in dollars per share) | $ (0.11) | $ (0.17) | $ (0.02) | $ 0.02 | $ (0.11) | $ (0.05) | $ (0.05) | $ (0.02) | $ (0.28) | $ (0.23) | $ (0.07) |
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