Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

The following table presents the various elements of “income from discontinued operations, net of income taxes” as reported in the accompanying Condensed Consolidated Statement of Operations:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Product sales, net***	$	(1,245	)	$	23,753		$	12,938		$	51,863
License fees and service revenue	—			415			290			2,799
Total revenues	$	(1,245	)	$	24,168		$	13,228		$	54,662
Operating costs and expenses:
Cost of sales (excluding amortization of intangible assets)	433			6,606			3,601			13,420
Selling, general and administrative	(61		)	7,060			5,890			14,549
Research and development	255			4,893			2,791			9,422
Amortization of intangible assets	—			6,934			1,248			13,880
Restructuring - employee severance (Note 12)****	(2,439		)	—			3,858			—
Total operating costs and expenses	$	(1,812	)	$	25,493		$	17,388		$	51,271
Income (loss) from discontinued operations	$	567		$	(1,325	)	$	(4,160	)	$	3,391
Other (expense) income:
Change in fair value of contingent consideration	—			(192		)	(1,478		)	(483		)
Gain on sale of Commercial Product Portfolio*	—			—			33,644			—
Total other (expense) income	$	—		$	(192	)	$	32,166		$	(483	)
Income (loss) from discontinued operations before income taxes	567			(1,517		)	28,006			2,908
(Provision) benefit for income taxes from discontinued operations**	(179		)	367			(6,953		)	(703		)
Income (loss) from discontinued operations, net of income taxes	$	388		$	(1,150	)	$	21,053		$	2,205

*This pre-tax gain on sale represents the $158.8 million proceeds from the Commercial Product Portfolio Transaction less our $121.2 book value of transferred net assets (inclusive of assumed liabilities) to Acrotech on the March 1, 2019 closing date, less legal and banker fees for the six months ended June 30, 2019 aggregating $3.9 million.

**This income tax provision (benefit) represents an allocation of taxes as required under intraperiod allocation guidance (see Note 10). Due to our aggregate net operating loss-carryforwards, no federal or state income tax payments are expected to be made relating to our current year activity, inclusive of our recognized gain on sale of the Commercial Product Portfolio.

***The “Product sales, net” is inclusive of our commercial product sales for January and February 2019, as well as recognized EVOMELA product sales during the second quarter of 2019 to a single customer under an active contract not yet assumed by Acrotech (see Note 7). The negative revenue value for the second quarter of 2019 reflects actual government chargeback claims we received during the three months ended June 30, 2019 that were in excess of our estimated allowance for government chargebacks (see Note 3(g)).

****The “Restructuring - employee severance” negative value in the second quarter of 2019 reflects a current period reclassification to continuing operations “selling, general and administrative” and “research and development” expenses within the accompanying Statements of Operations. This $2.4 million amount was previously included within “income (loss) from discontinued operations, net of income taxes” in the first quarter of 2019.

Condensed Consolidated Balance Sheets

Accounts receivable derived from our product sales on and prior to February 28, 2019 were not transferred to Acrotech as part of Commercial Product Portfolio Transaction, nor were our GTN liabilities and trade accounts payable assumed by Acrotech that were associated with our commercial activities on and prior to February 28, 2019 (see Note 3(g)). Accordingly, these specific assets and liabilities remain presented within “accounts receivable, net of allowance for doubtful accounts” and “accounts payable and other accrued liabilities” on the accompanying Condensed Consolidated Balance Sheets.

The following table presents a summary of our “discontinued operations, assets” and “discontinued operations, liabilities” as of December 31, 2018 within the accompanying Condensed Consolidated Balance Sheets (representing those assets and

liabilities transferred to Acrotech as part of the Commercial Product Portfolio Transaction):

	December 31, 2018
Inventories	$	3,550
Prepaid expenses and other assets	2,005
Discontinued operations, current assets	$	5,555
Intangible assets, net of accumulated amortization	111,594
Goodwill	18,061
Other assets	2,970
Discontinued operations, non-current assets	$	132,625
FOLOTYN development liability	2,311
Discontinued operations, current liabilities	$	2,311
FOLOTYN development liability, less current portion	9,686
Acquisition-related contingent obligations	4,345
Discontinued operations, non-current liabilities	$	14,031

Condensed Consolidated Statement of Cash Flows

The following table presents significant non-cash items for our discontinued operations that are included as adjustments in the accompanying Condensed Consolidated Statements of Cash Flows:

	Six Months Ended June 30,
	2019		2018
Depreciation and amortization	$	1,263	$	13,925
Stock-based compensation	$	3,404	$	3,146
Change in fair value of contingent consideration	$	1,311	$	291