UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 2009
Impax Laboratories, Inc.
(Exact name of registrant as specified in its charter)
 	 	 	 	 	
Delaware	 	001-34263	 	65-0403311	
 	 	 	 	 	
(State or other jurisdiction
of incorporation)	 	(Commission File Number)	 	(IRS Employer Identification No.)	

30831 Huntwood Avenue, Hayward, CA	 	 
94544	
 	 	 	
(Address of principal executive offices)	 	(Zip Code)	
Registrant’s telephone number, including area code: (510) 476-2000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	 	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 		
o	 	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 		
o	 	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 		
o	 	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 
Item 2.02 Results of Operations and Financial Condition.
On November 3, 2009, Impax Laboratories, Inc. issued a press release announcing its results for the fiscal quarter ended September 30, 2009. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibit is furnished herewith.
 	 	 	
Exhibit No.	 	Description	
99.1	 	Press release issued November 3, 2009.	
 
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 	 	 	 	 	
Dated: November 3, 2009  	IMPAX LABORATORIES, INC.

 	By:  	/s/ Arthur A. Koch, Jr.  	 	
 	 	Name:  	Arthur A. Koch, Jr. 	 	
 	 	Title:  	Senior Vice President, Finance, and
Chief Financial Officer 	 	
 
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EXHIBIT INDEX
 	 	 	
Exhibit No.	 	Description	
99.1	 	Press release issued November 3, 2009.	
 
 3 

Exhibit 99.1

Company Contact:
Impax Laboratories, Inc.
Mark Donohue
Sr. Director, Investor Relations
(215) 933-3526
www.impaxlabs.com
Impax Laboratories Continues Trend of Solid Growth in Revenue, Profit
and Earnings for the Third Quarter 2009
HAYWARD, Calif. (November 3, 2009) — Impax Laboratories, Inc. (NASDAQ: IPXL) today reported strong growth in revenue, net income and earnings per diluted share in the third quarter 2009. Net income increased to $6.7 million, up $17.2 million compared to a net loss of $10.5 million in the prior year period. Net Income per diluted share increased to $0.11, up $0.29 per share, compared to a loss of $0.18 per diluted share in the prior year period.
Total revenue for the third quarter 2009 increased 77% to $64.9 million, compared to the prior year period, due primarily to strong sales of the Company’s Global label products. Gross profit increased to 57% of total revenue, compared to 39% of total revenue in the prior year period. The strong growth in revenue and gross profit resulted in an increase of $28.3 million in income from operations to $10.2 million, compared to a loss from operations of $18.1 million in the prior year period.
Larry Hsu, Ph.D., president and chief executive officer of Impax Laboratories, said: “We continue to successfully execute our strategic plan as we produced another solid quarter of financial performance in our base generic business and further development of our brand products. Our strong third quarter and year-to-date financial results reflect our ability to capitalize on existing product opportunities. In addition, the research and development investments we are making in creating high-value opportunities continue to pay dividends as shown by our October 1 launch of generic versions of Adderall XR®. These investments will further increase our portfolio as we are on track to achieve our 2009 ANDA submission goal of 8 to 10 new applications.”
Dr. Hsu continued, “We also remain pleased with the development of our brand products. During the third quarter, our brand business reported positive results from our completed Phase II trial of our late-stage Parkinson’s Disease drug candidate IPX066. In April 2009, based on encouraging interim data, we began enrolling patients in the Phase III trial in levodopa naive Parkinson’s disease patients in North America and Europe. In October, ahead of schedule, we commenced a second Phase III trial in patients with advanced Parkinson’s Disease. The positive developments confirm our belief that the investments we are making in our brand division will further enhance our long-term growth prospects.”
 
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Third Quarter 2009 Segment Information
The Company has two reportable segments, the Global Pharmaceuticals Division (generic products) and the Impax Pharmaceuticals Division (brand products).
Global Pharmaceuticals Division Information
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
(unaudited, amounts in thousands)	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
 	 	 	 	 	(as adjusted)	 	 	 	 	 	(as adjusted)	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Global product sales, net	 	$	46,636	 	 	$	20,080	 	 	$	123,144	 	 	$	69,044	 	
Private Label	 	 	1,752	 	 	 	629	 	 	 	5,269	 	 	 	1,747	 	
Rx Partner (a)	 	 	8,328	 	 	 	9,424	 	 	 	30,183	 	 	 	72,099	 	
OTC Partner	 	 	1,769	 	 	 	3,398	 	 	 	5,255	 	 	 	12,739	 	
Research Partner	 	 	2,962	 	 	 	—	 	 	 	8,406	 	 	 	—	 	
Other	 	 	—	 	 	 	5	 	 	 	11	 	 	 	19	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Revenues	 	 	61,447	 	 	 	33,536	 	 	 	172,268	 	 	 	155,648	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of revenues	 	 	25,098	 	 	 	19,296	 	 	 	72,339	 	 	 	58,046	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit (b)	 	 	36,349	 	 	 	14,240	 	 	 	99,929	 	 	 	97,602	 	

Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	 	8,909	 	 	 	12,253	 	 	 	28,761	 	 	 	31,745	 	
Patent litigation	 	 	1,647	 	 	 	1,876	 	 	 	4,058	 	 	 	4,827	 	
Selling, general and administrative	 	 	2,561	 	 	 	4,357	 	 	 	7,628	 	 	 	9,276	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	13,117	 	 	 	18,486	 	 	 	40,447	 	 	 	45,848	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from operations (b)	 	$	23,232	 	 	 	($4,246	)	 	$	59,482	 	 	$	51,754	 	

(a)	 	Rx Partner revenue for the nine months ended September 30, 2008 includes $40.8 million from sales of generic OxyContin® which ended in January 2008 pursuant to a litigation settlement agreement, for which there was no amount in 2009.	
 		
(b)	 	Gross profit and income from operations for the nine months ended September 30, 2008 includes $38.7 million from the sale of generic OxyContin® as noted above.	
Global Pharmaceuticals Division revenues in the third quarter 2009 increased $27.9 million to $61.4 million, due primarily to an increase in net Global product sales.
Net Global product sales increased 132% to $46.6 million, an increase of $26.6 million over the same period in 2008 primarily due to sales of fenofibrate products. Private label product sales increased 179% to $1.8 million primarily due to sales of generic loratadine/pseudoephedrine, the generic version of Claritin® D 24-hour, as a result of a new supply agreement. Rx Partner revenues were $8.3 million, down 12%, primarily attributable to reduced sales of generic Wellbutrin® XL 300mg. OTC Partner revenues decreased 48% to $1.8 million, primarily attributable to the expiration of the Company’s contract to supply Schering-Plough with product effective December 31, 2008. Research Partner revenues were $3.0 million resulting from a Joint Development Agreement entered into during the fourth quarter of 2008.
Cost of revenues was $25.1 million for the third quarter 2009, an increase of 30% primarily related to the higher sales of Global products.
 
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Gross profit for the third quarter 2009 increased $22.1 million to $36.3 million primarily due to an increase in margins on fenofibrate sales. Gross profit margin of 59% for the third quarter 2009 increased significantly over the 42% for the prior year period.
Total research and development expenses for the third quarter 2009 decreased $3.3 million to $8.9 million, compared to the prior year period primarily due to lower spending on bio-studies, bio-analytical expenses and active pharmaceutical ingredient used in research activities.
Total selling, general and administrative expenses for the third quarter 2009 decreased $1.8 million to $2.6 million primarily due to executive level severance paid out in the prior year period, in addition to prior period strategic management consulting and business development related activities.
Generic division income from operations in the third quarter 2009 increased $27.5 million to $23.2 million, compared to a loss in the prior year period, due primarily to higher sales as noted above.
Impax Pharmaceuticals Division Information
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
(unaudited, amounts in thousands)	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
 	 	 	 	 	(as adjusted)	 	 	 	 	 	(as adjusted)	 	
Promotional Partner	 	$	3,499	 	 	$	3,238	 	 	$	10,007	 	 	$	9,728	 	
Cost of revenues	 	 	2,957	 	 	 	3,000	 	 	 	9,250	 	 	 	8,332	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	542	 	 	 	238	 	 	 	757	 	 	 	1,396	 	

Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	 	6,334	 	 	 	3,935	 	 	 	17,983	 	 	 	11,530	 	
Selling, general and administrative	 	 	761	 	 	 	538	 	 	 	2,528	 	 	 	1,879	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	7,095	 	 	 	4,473	 	 	 	20,511	 	 	 	13,409	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss from operations	 	 	($6,553	)	 	 	($4,235	)	 	 	($19,754	)	 	 	($12,013	)	
Promotional Partner revenues in the third quarter 2009 increased 8% to $3.5 million. The change from the prior year period is primarily the result of the commencement of physician detailing services under our Co-Promotion Agreement with Wyeth on July 1, 2009, while the Promotional Services Agreement with Shire ended on June 30, 2009.
Cost of revenues for the third quarter 2009 were $3.0 million, down slightly from the prior year period.
The Company is currently investing in research and development to develop brand products which provide longer product life cycles and the potential for significantly higher profit margins than generic products. In the third quarter 2009, R&D increased $2.4 million to $6.3 million, due to planned increased spending on clinical studies and additional research personnel.
The Company’s planned increase in investment in R&D during the third quarter 2009 contributed to a brand division loss from operations of $6.6 million compared to a loss from operations of $4.2 million in the third quarter of 2008.
 
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Other Operating Information
Corporate general and administrative expenses for the third quarter 2009 declined 32% to $6.5 million, primarily attributable to a decrease in professional fees related to the examination and review of the Company’s financial statements in conjunction with the financial statements for the years 2004 through 2007 and the resulting filing with the SEC of the Company’s Registration Statement on Form 10. Also contributing to the decline was the adjustment of accrued settlement-related charges in conjunction with the repayment of a subordinated promissory note, and lower employment-related expenses.
Cash and short-term investments, net of interest-bearing debt, was $100.5 million as of September 30, 2009, as compared to $99.6 million as of December 31, 2008. The change in cash and short-term investments, net from year-end 2008, included the Company’s June 15, 2009 repayment, at the option of the holders, of the $12.75 million remaining outstanding balance of the Company’s 3.5% Debentures, offset by changes in working capital assets and liabilities, including the collection of accounts receivable balances and payments of accounts payable during the nine months ended September 30, 2009.
Cash flow from operating activities was approximately a positive $3.6 million before changes in certain working capital assets and liabilities.
2009 Financial Outlook
The Company previously disclosed its 2009 financial outlook on February 26, 2009. As of November 3, 2009, the Company has updated its full year 2009 forecast as noted below.

•	 	Positive cash flows from operating activities before changes in working capital assets and liabilities for the third consecutive year.	
 		
•	 	Gross margins as a percent of total revenues to approximate 50%.	
 		
•	 	Total research and development expenses across the generic and brand divisions to approximate $64 million with $40 million and $24 million allocated to generic and brand R&D, respectively.	
 		
•	 	Patent litigation expenses of approximately $6 to $7 million (previously $10 million).	
 		
•	 	Selling, general and administrative expenses of approximately $44 million (previously $39 million).	
 
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Conference Call Information
The Company will host a conference call today at 11:00 a.m. EDT to discuss its results. The number to call from within the United States is (877) 356-3814 and (706) 758-0033 internationally. The call can also be accessed via a live Webcast through the Investor Relations section of the Company’s Web site, www.impaxlabs.com . A replay of the conference call will be available shortly after the call for a period of seven days. To access the replay, dial (800) 642-1687 (in the U.S.) and (706) 645-9291 (international callers). The access conference code is 35901562.
About Impax Laboratories, Inc.
Impax Laboratories, Inc. is a technology-based specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of branded products. Impax markets its generic products through its Global Pharmaceuticals division and markets its branded products through the Impax Pharmaceuticals division. Additionally, where strategically appropriate, Impax has developed marketing partnerships to fully leverage its technology platform. Impax is headquartered in Hayward, California, and has a full range of capabilities in its Hayward and Philadelphia facilities. For more information, please visit the Company’s Web site at: www.impaxlabs.com.
“ Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995:
To the extent any statements made in this news release contain information that is not historical, these statements are forward-looking in nature and express the beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause the Company’s future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to; ability to timely file periodic reports required by the Exchange Act; ability to maintain an effective system of internal control over financial reporting; ability to sustain profitability and positive cash flows; ability to maintain sufficient capital to fund operations; any delays or unanticipated expenses in connection with the construction of our Taiwan facility; ability to successfully develop and commercialize pharmaceutical products; the uncertainty of patent litigation; consumer acceptance and demand for new pharmaceutical products; the impact of competitive products and pricing; the difficulty of predicting Food and Drug Administration filings and approvals; inexperience in conducting clinical trials and submitting new drug applications; reliance on key alliance agreements; the availability of raw materials; the regulatory environment; exposure to product liability claims; fluctuations in operating results and other risks described in our periodic reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as to the date on which they are made, and Impax undertakes no obligation to update publicly or revise any forward-looking statement, regardless of whether new information becomes available, future developments occur or otherwise.
(tables to follow)
 
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Impax Laboratories, Inc.
Consolidated Statements of Operations
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	Nine Months Ended	 	
 	 	September 30,	 	 	September 30,	 	
(unaudited, amounts in thousands, except share and	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
per share data)	 	 	 	 	(as adjusted)	 	 	 	 	 	(as adjusted)	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Global Pharmaceuticals Division (a)	 	$	61,447	 	 	$	33,536	 	 	$	172,268	 	 	$	155,648	 	
Impax Pharmaceuticals Division	 	 	3,499	 	 	 	3,238	 	 	 	10,007	 	 	 	9,728	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Revenues	 	 	64,946	 	 	 	36,774	 	 	 	182,275	 	 	 	165,376	 	

Cost of revenues	 	 	28,055	 	 	 	22,296	 	 	 	81,589	 	 	 	66,378	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit (b)	 	 	36,891	 	 	 	14,478	 	 	 	100,686	 	 	 	98,998	 	

Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	 	15,243	 	 	 	16,188	 	 	 	46,744	 	 	 	43,275	 	
Patent litigation	 	 	1,647	 	 	 	1,876	 	 	 	4,058	 	 	 	4,827	 	
Selling, general and administrative	 	 	9,838	 	 	 	14,542	 	 	 	31,600	 	 	 	37,047	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	 	 	26,728	 	 	 	32,606	 	 	 	82,402	 	 	 	85,149	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from operations	 	 	10,163	 	 	 	(18,128	)	 	 	18,284	 	 	 	13,849	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Change in fair value of common stock purchase warrants	 	 	—	 	 	 	—	 	 	 	—	 	 	 	59	 	
Other income (expense), net	 	 	22	 	 	 	(4	)	 	 	105	 	 	 	36	 	
Interest income	 	 	180	 	 	 	723	 	 	 	636	 	 	 	3,282	 	
Interest expense	 	 	(185	)	 	 	(971	)	 	 	(735	)	 	 	(4,447	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) before income taxes	 	 	10,180	 	 	 	(18,380	)	 	 	18,290	 	 	 	12,779	 	
Provision (benefit) for income taxes	 	 	3,495	 	 	 	(7,850	)	 	 	6,373	 	 	 	5,761	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Income (loss) (c)	 	$	6,685	 	 	 	($10,530	)	 	$	11,917	 	 	$	7,018	 	

Net Income (loss) per share:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	$	0.11	 	 	 	($0.18	)	 	$	0.20	 	 	$	0.12	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted	 	$	0.11	 	 	 	($0.18	)	 	$	0.20	 	 	$	0.12	 	

Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	60,559,064	 	 	 	59,166,319	 	 	 	60,130,608	 	 	 	58,993,633	 	
Diluted	 	 	61,247,700	 	 	 	59,166,319	 	 	 	60,667,227	 	 	 	60,813,707	 	
 	 	 	
(a)	 	Global Pharmaceuticals Division revenue for the nine months ended September 30, 2008 includes $40.8 million from sales of generic OxyContin® which ended in January 2008 pursuant to a litigation settlement agreement, for which there was no amount in 2009.	
 		
(b)	 	Gross profit for the nine months ended September 30, 2008 includes $38.7 million from the sale of generic OxyContin® as noted above.	
 		
(c)	 	Net income from operations for the nine months ended September 30, 2008 includes $21.2 million from the sale of generic OxyContin® as noted above.	
 
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Impax Laboratories, Inc.
Condensed Consolidated Balance Sheets
 	 	 	 	 	 	 	 	 	
 	 	September 30,	 	 	December 31,	 	
 	 	2009	 	 	2008	 	
(amounts in thousands)	 	(unaudited)	 	 	(as adjusted)	 	
ASSETS	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	47,577	 	 	$	69,275	 	
Short-term investments	 	 	52,950	 	 	 	50,710	 	
Accounts receivable, net	 	 	61,543	 	 	 	43,306	 	
Inventory, net	 	 	38,911	 	 	 	32,305	 	
Current portion of deferred product manufacturing costs-alliance agreements	 	 	14,750	 	 	 	13,578	 	
Current portion of deferred income taxes	 	 	18,611	 	 	 	17,900	 	
Prepaid expenses and other current assets	 	 	2,654	 	 	 	9,298	 	
 	 	 	 	 	 	 	
Total current assets	 	 	236,996	 	 	 	236,372	 	
 	 	 	 	 	 	 	
Property, plant and equipment, net	 	 	96,457	 	 	 	95,629	 	
Deferred product manufacturing costs-alliance agreements	 	 	93,075	 	 	 	93,144	 	
Deferred income taxes, net	 	 	61,270	 	 	 	52,551	 	
Other assets	 	 	14,521	 	 	 	9,017	 	
Goodwill	 	 	27,574	 	 	 	27,574	 	
 	 	 	 	 	 	 	
Total assets	 	$	529,893	 	 	$	514,287	 	

Liabilities and Stockholders Equity	 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	 	
Current portion of long-term debt, net	 	 	—	 	 	$	14,416	 	
Accounts payable	 	 	13,245	 	 	 	12,797	 	
Accrued expenses	 	 	55,799	 	 	 	41,360	 	
Current portion of deferred revenue-alliance agreements	 	 	39,925	 	 	 	35,015	 	
Current portion of accrued exclusivity period fee payments due	 	 	—	 	 	 	6,000	 	
 	 	 	 	 	 	 	
Total current liabilities	 	 	108,969	 	 	 	109,588	 	
 	 	 	 	 	 	 	
Long-term debt	 	 	—	 	 	 	5,990	 	
Deferred revenue-alliance agreements	 	 	223,439	 	 	 	225,804	 	
Other liabilities	 	 	16,739	 	 	 	13,255	 	
 	 	 	 	 	 	 	
Total liabilities	 	 	349,147	 	 	 	354,637	 	
 	 	 	 	 	 	 	
Stockholders equity	 	 	180,746	 	 	 	159,650	 	
 	 	 	 	 	 	 	
Total liabilities and stockholders equity	 	$	529,893	 	 	$	514,287	 	

 7 

 

Impax Laboratories, Inc.
Consolidated Statement of Cash Flows
 	 	 	 	 	 	 	 	 	
 	 	Nine Months Ended September 30,	 	
 	 	2009	 	 	2008	 	
(unaudited, amounts in thousands)	 	 	 	 	(as adjusted)	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	
Net income	 	$	11,917	 	 	$	7,018	 	
Adjustments to reconcile net income to net cash (used in) provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation	 	 	7,806	 	 	 	6,791	 	
Amortization of 3.5% Debentures discount and deferred financing costs	 	 	296	 	 	 	1,946	 	
Amortization of Wachovia Credit Agreement deferred financing costs	 	 	50	 	 	 	287	 	
Bad debt expense	 	 	131	 	 	 	278	 	
Deferred income taxes (benefit)	 	 	(9,430	)	 	 	1,997	 	
Provision for uncertain tax positions	 	 	695	 	 	 	—	 	
Loss, net of repurchase of 3.5% Debentures	 	 	—	 	 	 	114	 	
Deferred revenue — Rx Partners	 	 	34,601	 	 	 	82,774	 	
Deferred product manufacturing costs — Rx Partners	 	 	(19,053	)	 	 	(25,405	)	
Deferred revenue recognized — Rx Partners	 	 	(30,183	)	 	 	(72,099	)	
Amortization deferred product manufacturing costs — Rx Partners	 	 	15,044	 	 	 	17,153	 	
Deferred revenue — OTC Partners	 	 	1,787	 	 	 	13,901	 	
Deferred product manufacturing costs — OTC Partners	 	 	(1,800	)	 	 	(13,760	)	
Deferred revenue recognized — OTC Partners	 	 	(5,255	)	 	 	(12,739	)	
Amortization deferred product manufacturing costs — OTC Partners	 	 	4,706	 	 	 	12,059	 	
Deferred revenue — Research Partners	 	 	10,000	 	 	 	—	 	
Deferred revenue recognized — Research Partners	 	 	(8,406	)	 	 	—	 	
Payments on exclusivity period fee	 	 	(6,000	)	 	 	(9,000	)	
Payments on accrued litigation settlements	 	 	(8,037	)	 	 	(1,648	)	
Share-based compensation expense	 	 	5,179	 	 	 	4,458	 	
Fair value of shares issued under severance agreement	 	 	—	 	 	 	561	 	
Accretion of interest income on short-term investments	 	 	(424	)	 	 	(2,160	)	
Change in fair value of stock purchase warrants	 	 	—	 	 	 	(59	)	
Changes in assets and liabilities:	 	 	 	 	 	 	 	 	
Accounts receivable	 	 	(18,368	)	 	 	13,379	 	
Inventory	 	 	(6,606	)	 	 	(3,060	)	
Prepaid expenses and other assets	 	 	1,351	 	 	 	(6,102	)	
Accounts payable and accrued expenses	 	 	14,892	 	 	 	753	 	
Other liabilities	 	 	2,740	 	 	 	3,051	 	
 	 	 	 	 	 	 	
Net cash (used in) provided by operating activities	 	 	($2,367	)	 	$	20,448	 	

Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Purchase of short-term investments	 	 	($49,563	)	 	 	($195,218	)	
Maturities of short-term investments	 	 	47,748	 	 	 	248,143	 	
Purchases of property, plant and equipment	 	 	(8,405	)	 	 	(20,873	)	
 	 	 	 	 	 	 	
Net cash (used in) provided by investing activities	 	 	($10,220	)	 	$	32,052	 	

Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Repayment of long-term debt	 	 	($12,887	)	 	 	($65,198	)	
Proceeds from exercise of stock options and purchases under the ESPP	 	 	3,776	 	 	 	1,079	 	
 	 	 	 	 	 	 	
Net cash used in financing activities	 	 	($9,111	)	 	 	($64,119	)	

Net decrease in cash and cash equivalents	 	 	($21,698	)	 	 	($11,579	)	
Cash and cash equivalents, beginning of period	 	$	69,275	)	 	$	37,462	 	
Cash and cash equivalents, end of period	 	$	47,577	 	 	$	25,883	 	
 
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Impax Laboratories, Inc.
Presentation of Deferred Revenue and Deferred Product Manufacturing Cost Data
The following table summarizes the additions to and deductions from deferred revenue and deferred product manufacturing costs under the Company’s Teva, DAVA, OTC, Medicis and Putney, Inc. alliance agreements. This information is used to explain the changes in the respective balance sheet accounts of deferred revenue-alliance agreements and deferred product manufacturing costs-alliance agreements. The table sets forth the amount of revenue deferred in each period as well as the amount recognized in the period under the Company’s modified proportional performance method of revenue recognition for revenue earned under the Teva, DAVA, and OTC alliance agreements and straight line revenue recognition for the Medicis alliance agreement. The summarized information for the nine months ended September 30, 2009 is derived from the corresponding tables for each of these separate alliance agreements set forth in the Alliance Agreement footnote to the Company’s unaudited interim consolidated financial statements for the nine months ended September 30, 2009.
 	 	 	 	 	 	 	 	 	
 	 	Nine Months	 	 	Inception	 	
 	 	Ended	 	 	Through	 	
 	 	September 30, 2009	 	 	December 31, 2008	 	
 	 	(unaudited)	 	 	(unaudited)	 	
Deferred revenue:	 	 	 	 	 	 	 	 	
Beginning balance	 	$	260,819	 	 	$	—	 	
Deferrals	 	 	46,388	 	 	 	638,342	 	
Less amounts recognized	 	 	(43,843	)	 	 	(377,523	)	
 	 	 	 	 	 	 	
Ending deferred revenue	 	$	263,364	 	 	$	260,819	 	

Deferred product manufacturing costs:	 	 	 	 	 	 	 	 	
Beginning balance	 	$	106,722	 	 	$	—	 	
Deferrals	 	 	20,853	 	 	 	256,461	 	
Less amounts amortized	 	 	(19,750	)	 	 	(149,739	)	
 	 	 	 	 	 	 	
Ending deferred product manufacturing costs	 	$	107,825	 	 	$	106,722	 	
 	 	 	 	 	 	 	
Note to the Financial Table Information Contained in this September 30, 2009 Earnings Release
As required, the Company adopted Financial Accounting Standards Board Accounting Standards Codification Topic 470, discussing the accounting for convertible debt instruments which may be settled in cash upon conversion, was applied on a retrospective basis, with the restatement of all reporting periods beginning January 1, 2007. The 2008 financial results reported in the tables within this press release are “as adjusted”.
 
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