Casi Holdings and Evomela Supply Contract

6 Months Ended

Jun. 30, 2019

Other Commitments [Abstract]

Casi Holdings and Evomela Supply Contract

CASI HOLDINGS AND EVOMELA SUPPLY CONTRACT

Overview of CASI Transaction

In 2014, we executed three perpetual out-license agreements for our former products ZEVALIN, MARQIBO, and EVOMELA (“CASI Out-Licensed Products”) with CASI, a publicly-traded biopharmaceutical company (NASDAQ: CASI) with a primary focus on the China market (collectively, the “CASI Out-License”). Under the CASI Out-License, we received

CASI common stock and a secured promissory note and CASI gained the exclusive rights to distribute the CASI Out-Licensed Products in greater China (which includes Taiwan, Hong Kong and Macau).

On March 1, 2019, we completed the Commercial Product Portfolio Transaction (see Note 1(b)) and substantially all of the contractual rights and obligations associated with these products, including the CASI Out-License, were transferred to Acrotech at closing. However, we will tentatively supply CASI with EVOMELA under an active contract not yet assumed by Acrotech (see Note 3(h)). After we fulfill this open order, Acrotech will assume all future supply of this product to CASI and we will not have any further involvement with this arrangement.

Our Ownership in CASI at June 30, 2019

Under certain conditions that expired in December 2017, we exercised our rights during 2016 and 2017 to purchase additional shares of CASI common stock at par value in order to maintain our post-investment ownership percentage. Our aggregate holding of 10.0 million CASI common shares as of June 30, 2019 represented an approximate 10.5% ownership with a fair market value of $32.2 million (see Note 3(a)). In April 2019, we completed the sale of 1.5 million of these shares under a forward-sales contract and recognized a $2.7 million gain within “other income (expense), net” within the accompanying Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019.