Discontinued Operations

6 Months Ended

Jun. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

DISCONTINUED OPERATIONS

        Overview

In March 2019, we completed the Commercial Product Portfolio Transaction -- see Note 1(b). In accordance with applicable GAAP (ASC 205-20, Presentation of Financial Statements), the revenue-deriving activities and allocable expenses of our sold commercial operation, connected to the Commercial Product Portfolio, are separately classified as “discontinued” for all periods presented within the accompanying Condensed Consolidated Statements of Operations.

Condensed Consolidated Statements of Operations

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Revenues:
Product sales, net*	$	120	$	(1,245)	$	(100)	$	12,834
License fees and service revenue	—		—		—		290
Total revenues	$	120	$	(1,245)	$	(100)	$	13,124
Operating costs and expenses:
Cost of sales (excluding amortization of intangible assets)	—		433		(229)		3,601
Selling, general and administrative	—		(61)		(1)		5,890
Research and development	(24)		255		(59)		2,791
Amortization of intangible assets	—		—		—		1,248
Restructuring charges - employee severance (Note 11)**	—		(2,439)		—		3,858
Total operating costs and expenses	$	(24)	$	(1,812)	$	(289)	$	17,388
Income (loss) from discontinued operations	$	144	$	567	$	189	$	(4,264)
Other (expense) income:
Change in fair value of contingent consideration	—		—		—		(1,478)
Gain on sale of Commercial Product Portfolio***	—		—		—		33,644
Total other income	$	—	$	—	$	—	$	32,166
Income from discontinued operations before income taxes	144		567		189		27,902
Provision for income taxes from discontinued operations	—		(179)		—		(6,927)
Income from discontinued operations, net of income taxes	$	144	$	388	$	189	$	20,975

* Product sales for the three and six months ended June 30, 2019 includes: (i) sales from our Commercial Product Portfolio in January and February 2019 (prior to the completion of the Commercial Product Portfolio Transaction) and (ii) EVOMELA sales to a specific licensee (see Note 7).

** The “Restructuring charges - 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 Condensed Statements of Operations. This $2.4 million amount was previously included within “income from discontinued operations, net of income taxes” in the first quarter of 2019.

*** The pre-tax gain on sale represents the $158.8 million gross 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 aggregating $3.9 million.

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(e)). Accordingly, these specific assets and liabilities remain presented within “accounts receivable, net of allowance for credit losses” and “accounts payable and other accrued liabilities” on the accompanying Condensed Consolidated Balance Sheets.

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,
	2020		2019
Depreciation and amortization	$	—	$	1,263
Stock-based compensation	$	—	$	3,404
Change in fair value of contingent consideration	$	—	$	1,311