Results of Discontinued Operations

9 Months Ended

Sep. 30, 2017

Discontinued Operations and Disposal Groups [Abstract]

Results of Discontinued Operations

Results of Discontinued Operations

Following the divestment of the Company’s DERMAGRAFT business in January 2014, the operating results associated with the DERMAGRAFT business have been classified as discontinued operations in the Company’s Unaudited Consolidated Statements of Operations for all periods presented.

For the three and nine months endedSeptember 30, 2017, the Company recorded a loss of $0.4 million (net of immaterial tax benefit) and gain of $18.6 million (net of tax expense of $10.9 million), respectively, primarily related to legal contingencies related to the divested DERMAGRAFT business and the release of escrow to Shire, respectively.

In January 2017, Shire entered into a final settlement agreement with the Department of Justice ("DOJ") in the amount of $350.0 million, plus interest which was accrued in 2016 and paid during the six months ended June 30, 2017.

After the civil settlement with the DOJ had been finalized, Shire and Advanced BioHealing Inc.'s ("ABH") equity holders entered into a settlement agreement and ABH’s equity holders released the $37.5 million escrow to Shire. Shire released the claims against ABH equity holders upon receiving the entire amount held in escrow.

For a more detailed description of the DERMAGRAFT legal proceedings, refer to Note 25, Legal and Other Proceedings, of Shire's 2016 Form 10-K.

For the three and nine months endedSeptember 30, 2016, the Company recorded a loss of $18.3 million and $257.5 million (net of tax benefit of $5.7 million and $101.1 million), respectively, related to costs associated with the divestment.