IMPAX LABORATORIES INC, 10-Q filed on 5/2/2014
Quarterly Report
Document And Entity Information
3 Months Ended
Mar. 31, 2014
Apr. 25, 2014
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
IMPAX LABORATORIES INC 
 
Document Type
10-Q 
 
Current Fiscal Year End Date
--12-31 
 
Entity Common Stock, Shares Outstanding
 
70,056,809 
Amendment Flag
false 
 
Entity Central Index Key
0001003642 
 
Entity Current Reporting Status
Yes 
 
Entity Voluntary Filers
No 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Well-known Seasoned Issuer
Yes 
 
Document Period End Date
Mar. 31, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q1 
 
Consolidated Balance Sheets (Current Period Unaudited) (USD $)
Mar. 31, 2014
Dec. 31, 2013
Current assets:
 
 
Cash and cash equivalents
$ 129,372,000 
$ 184,612,000 
Short-term investments
261,055,000 
228,521,000 
Accounts receivable, net
119,521,000 
112,993,000 
Inventory, net
76,159,000 
70,107,000 
Deferred income taxes
51,333,000 
50,788,000 
Prepaid expenses and other current assets
12,003,000 
12,721,000 
Total current assets
649,443,000 
659,742,000 
Property, plant and equipment, net
189,661,000 
188,191,000 
Other assets
55,205,000 
57,820,000 
Deferred income taxes
35,958,000 
33,926,000 
Intangible assets, net
24,364,000 
29,670,000 
Goodwill
27,574,000 
27,574,000 
Total assets
982,205,000 
996,923,000 
Current liabilities:
 
 
Accounts payable
27,646,000 
26,824,000 
Accrued expenses
81,752,000 
111,523,000 
Accrued profit sharing and royalty expenses
10,617,000 
11,560,000 
Deferred revenue
3,200,000 
3,983,000 
Total current liabilities
123,215,000 
153,890,000 
Deferred revenue
4,000,000 
4,267,000 
Other liabilities
29,806,000 
28,563,000 
Total liabilities
157,021,000 
186,720,000 
Commitments and contingencies (Notes 9 and 17)
   
   
Stockholders’ equity:
 
 
Preferred stock, $0.01 par value, 2,000,000 shares authorized, 0 shares outstanding at March 31, 2014 and December 31, 2013
   
   
Common stock, $0.01 par value, 90,000,000 shares authorized and 70,300,538 and 69,927,609 shares issued at March 31, 2014 and December 31, 2013, respectively
703,000 
699,000 
Additional paid-in capital
347,635,000 
336,648,000 
Treasury stock - 243,729 shares
(2,157,000)
(2,157,000)
Accumulated other comprehensive (loss) income
(1,295,000)
1,140,000 
Retained earnings
480,298,000 
473,873,000 
Total stockholders’ equity
825,184,000 
810,203,000 
Total liabilities and stockholders’ equity
$ 982,205,000 
$ 996,923,000 
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $)
Mar. 31, 2014
Dec. 31, 2013
Preferred Stock, par value (in Dollars per share)
$ 0.01 
$ 0.01 
Preferred Stock, shares authorized
2,000,000 
2,000,000 
Preferred Stock, shares outstanding
Common stock, par value (in Dollars per share)
$ 0.01 
$ 0.01 
Common stock, shares authorized
90,000,000 
90,000,000 
Common stock, shares issued
70,300,538 
69,927,609 
Treasury stock, shares
243,729 
243,729 
Consolidated Statements of Operations (Unaudited) (USD $)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Revenues:
 
 
Revenues
$ 118,718,000 
$ 148,489,000 
Cost of revenues
61,096,000 
90,618,000 
Gross profit
57,622,000 
57,871,000 
Operating expenses:
 
 
Research and development
21,741,000 
19,605,000 
Patent litigation expense
2,173,000 
4,278,000 
Selling, general and administrative
25,477,000 
29,717,000 
Total operating expenses
49,391,000 
53,600,000 
Income from operations
8,231,000 
4,271,000 
Other income, net
76,000 
149,456,000 
Interest income
388,000 
276,000 
Interest expense
(65,000)
(283,000)
Income before income taxes
8,630,000 
153,720,000 
Provision for income taxes
2,205,000 
48,278,000 
Net income
6,425,000 
105,442,000 
Net income per share:
 
 
Basic (in Dollars per share)
$ 0.09 
$ 1.59 
Diluted (in Dollars per share)
$ 0.09 
$ 1.55 
Weighted average common shares outstanding:
 
 
Basic (in Shares)
67,702,296 
66,487,470 
Diluted (in Shares)
69,938,872 
68,178,355 
Global Division [Member]
 
 
Revenues:
 
 
Revenues
109,141,000 
101,636,000 
Cost of revenues
57,022,000 
61,444,000 
Operating expenses:
 
 
Research and development
11,217,000 
11,711,000 
Patent litigation expense
2,173,000 
4,278,000 
Income before income taxes
36,346,000 
19,160,000 
Impax Division [Member]
 
 
Revenues:
 
 
Revenues
9,577,000 
46,853,000 
Cost of revenues
4,074,000 
29,174,000 
Operating expenses:
 
 
Research and development
10,524,000 
7,894,000 
Income before income taxes
$ (14,242,000)
$ (2,979,000)
Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Net income
$ 6,425 
$ 105,442 
Currency translation adjustments
(2,435)
(3,497)
Comprehensive income
$ 3,990 
$ 101,945 
Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Cash flows from operating activities:
 
 
Net income
$ 6,425 
$ 105,442 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
 
 
Depreciation and amortization
8,015 
12,397 
Charge for licensing agreement
2,000 
 
Intangible asset impairment charge
2,876 
 
Provision for inventory reserves
1,952 
22,810 
Accretion of interest income on short-term investments
(223)
(158)
Deferred income taxes – net and uncertain tax positions
(2,879)
(2,799)
Tax impact related to the exercise of employee stock options
(920)
Recognition of deferred revenue
(1,050)
(1,113)
Accrued profit sharing and royalty expense
10,608 
22,541 
Payments of profit sharing and royalty expense
(11,537)
(4,925)
Share-based compensation expense
4,386 
4,359 
Other receivable
 
(102,049)
Changes in certain assets and liabilities:
 
 
Accounts receivable
(6,528)
(21,357)
Inventory
(6,527)
(15,475)
Prepaid expenses and other assets
976 
13,228 
Accounts payable and accrued expenses
(26,163)
23,014 
Other liabilities
1,513 
2,527 
Net cash (used in) provided by operating activities
(17,076)
58,445 
Cash flows from investing activities:
 
 
Purchase of short-term investments
(133,754)
(60,515)
Maturities of short-term investments
101,443 
65,993 
Purchases of property, plant and equipment
(9,782)
(9,361)
Payment for licensing agreement
(2,000)
 
Net cash used in investing activities
(44,093)
(3,883)
Cash flows from financing activities:
 
 
Tax impact related to the exercise of employee stock options and restricted stock
920 
(3)
Proceeds from exercise of stock options and ESPP
5,977 
1,554 
Net cash provided by financing activities
6,897 
1,551 
Effect of exchange rate changes on cash and cash equivalents
(968)
(698)
Net (decrease) increase in cash and cash equivalents
(55,240)
55,415 
Cash and cash equivalents, beginning of period
184,612 
142,162 
Cash and cash equivalents, end of period
$ 129,372 
$ 197,577 
Supplemental Cash Flow Information
Cash Flow, Supplemental Disclosures [Text Block]

Supplemental disclosure of non-cash investing and financing activities:


      Three Months Ended  
(in $000's)     March 31,
2014 
     

March 31,

2013  

 

Cash paid for interest

  $ 1     $ 87  

Cash paid for income taxes

  $ 21,024     $ 222  

Accrued vendor invoices of approximately $4,165,000 and $4,273,000 at March 31, 2014 and 2013, respectively, are excluded from the purchase of property, plant, and equipment and the change in accounts payable and accrued expenses. Depreciation expense was $4,973,000 and $4,760,000 for the three months ended March 31, 2014 and 2013, respectively.


Note 1 - The Company & Basis of Presentation
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. THE COMPANY & BASIS OF PRESENTATION


Impax Laboratories, Inc. (“Impax” or “Company”) is a technology-based, specialty pharmaceutical company. The Company has two reportable segments, referred to as the “Global Pharmaceuticals Division” (“Global Division”) and the “Impax Pharmaceuticals Division” (“Impax Division”).


The Global Division develops, manufactures, sells, and distributes generic pharmaceutical products primarily through four sales channels: the “Global products” sales channel, for generic pharmaceutical prescription products the Company sells directly to wholesalers, large retail drug chains, and others; the “Private Label” sales channel, for generic pharmaceutical over-the-counter (“OTC”) and prescription products the Company sells to unrelated third-party customers who in turn sell the product to third parties under their own label; the “Rx Partner” sales channel, for generic prescription products sold through unrelated third-party pharmaceutical entities under their own label pursuant to alliance agreements; and the “OTC Partner” sales channel, for generic pharmaceutical OTC products sold through unrelated third-party pharmaceutical entities under their own labels pursuant to alliance and supply agreements. Revenues from the “Global Products” sales channel and the “Private Label” sales channel are reported under the caption “Global Product sales, net” in “Note 18 – Supplementary Financial Information.” The Company also generates revenue from research and development services provided under a joint development agreement with an unrelated third-party pharmaceutical company, and reports such revenue under the caption “Other Revenues” in “Note 18 – Supplementary Financial Information.” The Company provides these services through the research and development group in the Global Division. Revenues from the “OTC Partner” sales channel are also reported under the caption “Other Revenues” in “Note 18 – Supplementary Financial Information.”


The Impax Division is engaged in the development of proprietary brand pharmaceutical products that the Company believes represent improvements to already-approved pharmaceutical products addressing central nervous system (“CNS”) disorders. The Impax Division currently has one internally developed late stage branded pharmaceutical product candidate, RYTARY™ (IPX066), an extended release capsule formulation of carbidopa-levodopa for the symptomatic treatment of Parkinson’s disease, for which the New Drug Application (“NDA”) was accepted for filing by the U.S. Food and Drug Administration (“FDA”) in February 2012 and for which the Company received a Complete Response Letter from the FDA in January 2013. In April 2014, after discussions with the FDA, the Company resubmitted an NDA for RYTARY™. The NDA was accepted for filing by the FDA in April 2014 and the FDA has informed the Company that the Prescription Drug User Fee Act (“PDUFA”) date is October 9, 2014. The Company has also initiated the preparation of required documents for a European Market Authorization Application filing for RYTARY™, currently targeted for filing during the second half of 2014. In addition to RYTARY™, the Impax Division has a number of other product candidates that are in varying stages of development. The Impax Division is also engaged in the sale and distribution of Zomig® (zolmitriptan) products, indicated for the treatment of migraine headaches, under the terms of a Distribution, License, Development and Supply Agreement (“AZ Agreement”) with AstraZeneca UK Limited (“AstraZeneca”) in the United States and in certain United States territories. Revenues from Impax-labeled branded Zomig® products are reported under the caption “Impax Product sales, net” in “Note 18 – Supplementary Financial Information.” Finally, the Company generates revenue in the Impax Division from research and development services provided under a development and license agreement with another unrelated third-party pharmaceutical company, and reports such revenue under the caption “Other Revenues” in “Note 18 – Supplementary Financial Information.”


In California, the Company utilizes a combination of owned and leased facilities mainly located in Hayward. The Company’s primary properties in California consist of a leased office building used as the Company’s corporate headquarters, in addition to five properties it owns, including a research and development center facility and a manufacturing facility. Additionally, the Company leases three facilities in Hayward, utilized for additional research and development, administrative services, equipment storage and quality assurance support. In Pennsylvania, the Company owns a packaging, warehousing, and distribution center located in Philadelphia and leases a facility in New Britain used for sales and marketing, finance, and administrative personnel, as well as providing additional warehouse space. Outside the United States, in Taiwan, Republic of China (“R.O.C.”), the Company owns a manufacturing facility.


The accompanying unaudited interim consolidated financial statements of the Company, have been prepared based upon United States Securities and Exchange Commission (“SEC”) rules permitting reduced disclosure for interim periods, and include all adjustments necessary for a fair presentation of statements of operations, statements of comprehensive income, statements of cash flows, and financial condition for the interim periods shown, including normal recurring accruals and other items, noted below. While certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to SEC rules and regulations, the Company believes the disclosures are adequate to make the information presented not misleading. The unaudited interim consolidated financial statements of the Company include the accounts of the operating parent company, Impax Laboratories, Inc., its wholly owned subsidiaries, including Impax Laboratories (Taiwan) Inc., Impax Laboratories USA, LLC, ThoRx Laboratories, Inc., Impax Laboratories (Netherlands) BV and Impax Laboratories (Netherlands) CV, and an equity investment in Prohealth Biotech, Inc. (“Prohealth”), in which the Company held a 57.54% majority ownership interest at March 31, 2014. All significant intercompany accounts and transactions have been eliminated.


The unaudited results of operations and cash flows for the interim period are not necessarily indicative of the expected results of the Company’s operations for any other interim period or for the full year ending December 31, 2014. The unaudited interim consolidated financial statements and footnotes should be read in conjunction with the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the SEC, wherein a more complete discussion of significant accounting policies and certain other information can be found.


The preparation of financial statements in conformity with GAAP and the rules and regulations of the SEC requires the use of estimates and assumptions, based on complex judgments considered reasonable, which affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant judgments are employed in estimates used in determining values of tangible and intangible assets, legal contingencies, tax assets and tax liabilities, fair value of share-based compensation related to equity incentive awards issued to employees and directors, and estimates used in applying the Company’s revenue recognition policy including those related to accrued chargebacks, rebates, product returns, Medicare, Medicaid, and other government rebate programs, shelf-stock adjustments, and the timing and amount of deferred and recognized revenue and deferred and amortized product manufacturing costs related to alliance and collaboration agreements. Actual results may differ from estimated results. Certain prior year amounts have been reclassified to conform to the current year presentation.


In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, covering a wide range of matters, including, among others, patent litigation, and product and clinical trial liability. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 450, "Contingencies," the Company records accrued loss contingencies when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. The Company, in accordance with FASB ASC Topic 450, does not recognize gain contingencies until realized.


Management transition


During the three month period ended March 31, 2014, the Company announced a management change. The current Senior Vice President, Global Operations announced plans to retire and a Senior Vice President, Technical Operations was appointed. In conjunction with the transition, the Company recorded $0.7 million in separation charges and accelerated share-based compensation expense.


Note 2 - Revenue Recognition
Revenue Recognition [Text Block]

2. REVENUE RECOGNITION


The Company recognizes revenue when the earnings process is complete, which under SEC Staff Accounting Bulletin No. 104, Topic No. 13, “Revenue Recognition” (“SAB 104”), is when revenue is realized or realizable and earned, there is persuasive evidence a revenue arrangement exists, delivery of goods or services has occurred, the sales price is fixed or determinable, and collectability is reasonably assured.


The Company accounts for revenue arrangements with multiple deliverables in accordance with FASB ASC Topic 605-25, revenue recognition for arrangements with multiple elements, which addresses the determination of whether an arrangement involving multiple deliverables contains more than one unit of accounting. A delivered item within an arrangement is considered a separate unit of accounting only if both of the following criteria are met:


 

the delivered item has value to the customer on a stand-alone basis; and


 

if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor.


Under FASB ASC Topic 605-25, if both of the criteria above are not met, then separate accounting for the individual deliverables is not appropriate. Revenue recognition for arrangements with multiple deliverables constituting a single unit of accounting is recognized generally over the greater of the term of the arrangement or the expected period of performance, either on a straight-line basis or on a modified proportional performance basis.


The Company accounts for milestones related to research and development activities in accordance with FASB ASC Topic 605-28, milestone method of revenue recognition. FASB ASC Topic 605-28 allows for the recognition of consideration, which is contingent on the achievement of a substantive milestone, in its entirety in the period the milestone is achieved. A milestone is considered to be substantive if all of the following criteria are met: the milestone is commensurate with either: (1) the performance required to achieve the milestone, or (2) the enhancement of the value of the delivered items resulting from the performance required to achieve the milestone; the milestone relates solely to past performance; and, the milestone is reasonable relative to all of the deliverables and payment terms within the agreement.


Global Product sales, net, and Impax Product sales, net:


Global Product sales, net and Impax Product sales, net include revenue recognized related to shipments of generic and branded pharmaceutical products to the Company’s customers, primarily drug wholesalers and retail chains. Gross sales revenue is recognized at the time title and risk of loss passes to the customer, which is generally when product is received by the customer. Global and Impax Product revenue, net may include deductions from the gross sales price related to estimates for chargebacks, rebates, distribution service fees, returns, shelf-stock, and other pricing adjustments. The Company records an estimate for these deductions in the same period when the revenue is recognized. A summary of each of these deductions is as follows:


Chargebacks


The Company has agreements establishing contract prices for certain products with certain indirect customers, such as managed care organizations, hospitals and government agencies who purchase products from drug wholesalers. The contract prices are lower than the prices the customer would otherwise pay to the wholesaler, and the price difference is referred to as a chargeback, which generally takes the form of a credit memo issued by the Company to reduce the invoiced gross selling price charged to the wholesaler. An estimated accrued provision for chargeback deductions is recognized at the time of product shipment. The primary factors considered when estimating the provision for chargebacks are the average historical chargeback credits given, the mix of products shipped, and the amount of inventory on hand at the major drug wholesalers with whom the Company does business. The Company also monitors actual chargebacks granted and compares them to the estimated provision for chargebacks to assess the reasonableness of the chargeback reserve at each quarterly balance sheet date.  


Rebates


The Company maintains various rebate programs with its customers in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. The rebates generally take the form of a credit memo to reduce the invoiced gross selling price charged to a customer for products shipped. An estimated accrued provision for rebate deductions is recognized at the time of product shipment. The primary factors the Company considers when estimating the provision for rebates are the average historical experience of aggregate credits issued, the mix of products shipped and the historical relationship of rebates as a percentage of total gross product sales, the contract terms and conditions of the various rebate programs in effect at the time of shipment, and the amount of inventory on hand at the major drug wholesalers with whom the Company does business. The Company also monitors actual rebates granted and compares them to the estimated provision for rebates to assess the reasonableness of the rebate reserve at each quarterly balance sheet date.


Distribution Service Fees


The Company pays distribution service fees to several of its wholesaler customers related to sales of its Impax products. The wholesalers are generally obligated to provide the Company with periodic outbound sales information as well as inventory levels of the Company’s products held in their warehouses. Additionally, the wholesalers have agreed to manage the variability of their purchases and inventory levels within specified days on hand limits. An accrued provision for distribution service fees is recognized at the time products are shipped to wholesalers.


Returns


The Company allows its customers to return product if approved by authorized personnel in writing or by telephone with the lot number and expiration date accompanying any request and if such products are returned within six months prior to or until twelve months following, the products’ expiration date. The Company estimates and recognizes an accrued provision for product returns as a percentage of gross sales based upon historical experience. The product return reserve is estimated using a historical lag period, which is the time between when the product is sold and when it is ultimately returned and estimated return rates which may be adjusted based on various assumptions including changes to internal policies and procedures, changes in business practices, and commercial terms with customers, competitive position of each product, amount of inventory in the wholesaler supply chain, the introduction of new products, and changes in market sales information. The Company also considers other factors, including significant market changes which may impact future expected returns, and actual product returns. The Company monitors actual returns on a quarterly basis and may record specific provisions for returns it believes are not covered by historical percentages.


Shelf-Stock Adjustments


Based upon competitive market conditions, the Company may reduce the selling price of certain Global Division products. The Company may issue a credit against the sales amount to a customer based upon their remaining inventory of the product in question, provided the customer agrees to continue to make future purchases of product from the Company. This type of customer credit is referred to as a shelf-stock adjustment, which is the difference between the original selling price and the revised lower sales price, multiplied by an estimate of the number of product units on hand at a given date. Decreases in selling prices are discretionary decisions made by the Company in response to market conditions, including estimated launch dates of competing products and declines in market price. The Company records an estimate for shelf-stock adjustments in the period it agrees to grant such a credit memo to a customer.


Medicaid and Other Government Pricing Programs


As required by law, the Company provides a rebate on drugs dispensed under the Medicaid program, Medicare Part D, TRICARE, and other United States government pricing programs. The Company determines its estimated government rebate accrual primarily based on historical experience of claims submitted by the various states and other jurisdictions and any new information regarding changes in the various programs which may impact the Company’s estimate of government rebates. In determining the appropriate accrual amount, the Company considers historical payment rates and processing lag for outstanding claims and payments. The Company records estimates for government rebates as a deduction from gross sales, with corresponding adjustment to accrued liabilities.  


Cash Discounts


The Company offers cash discounts to its customers, generally 2% of the gross selling price, as an incentive for paying within invoice terms, which generally range from 30 to 90 days. An estimate of cash discounts is recorded in the same period when revenue is recognized.


Rx Partner and OTC Partner:


The Rx Partner and OTC Partner contracts include revenue recognized under alliance and collaboration agreements between the Company and unrelated third-party pharmaceutical companies. The Company has entered into these alliance agreements to develop marketing and/or distribution relationships with its partners to fully leverage its technology platform.


The Rx Partners and OTC Partners alliance agreements obligate the Company to deliver multiple goods and/or services over extended periods. Such deliverables include manufactured pharmaceutical products, exclusive and semi-exclusive marketing rights, distribution licenses, and research and development services. In exchange for these deliverables, the Company receives payments from its agreement partners for product shipments and research and development services, and may also receive other payments including royalty, profit sharing, upfront, and periodic milestone payments. Revenue received from the alliance agreement partners for product shipments under these agreements is not subject to deductions for chargebacks, rebates, product returns, and other pricing adjustments. Royalty and profit sharing amounts the Company receives under these agreements are calculated by the respective agreement partner, with such royalty and profit share amounts generally based upon estimates of net product sales or gross profit which include estimates of deductions for chargebacks, rebates, product returns, and other adjustments the alliance agreement partners may negotiate with their respective customers. The Company records the alliance agreement partner's adjustments to such estimated amounts in the period the agreement partner reports the amounts to the Company.


The Company applies the updated guidance of ASC 605-25 “Multiple Element Arrangements” to the Strategic Alliance Agreement with Teva Pharmaceuticals Curacao N.V., a subsidiary of Teva Pharmaceutical Industries Limited (“Teva Agreement”). The Company looks to the underlying delivery of goods and/or services which give rise to the payment of consideration under the Teva Agreement to determine the appropriate revenue recognition. The Company initially defers consideration received as a result of research and development-related activities performed under the Teva Agreement. The Company recognizes deferred revenue on a straight-line basis over the Company’s expected period of performance of such services. The Company recognizes revenue received as a result of the manufacture and delivery of products under the Teva Agreement at the time title and risk of loss passes to the customer which is generally when product is received by Teva. The Company recognizes profit share revenue in the period earned.


OTC Partner revenue is related to agreements with Pfizer Inc. (formerly Wyeth) and L. Perrigo Company with respect to the supply of over-the-counter pharmaceutical products. The OTC Partner sales channel is no longer a core area of the business, and the over-the-counter pharmaceutical products the Company sells through this sales channel are older products which are only sold to Pfizer and Perrigo, and which are currently sold at a loss, on a fully absorbed basis. The Company is currently only required to manufacture the over-the-counter pharmaceutical products under its agreements with Pfizer and Perrigo. The Company recognizes profit share revenue in the period earned.


Research Partner:


The Research Partner contracts include revenue recognized under development agreements with unrelated third-party pharmaceutical companies. The development agreements generally obligate the Company to provide research and development services over multiple periods. In exchange for this service, the Company received upfront payments upon signing of each development agreement and is eligible to receive contingent milestone payments, based upon the achievement of contractually specified events. Additionally, the Company may also receive royalty payments from the sale, if any, of a successfully developed and commercialized product under one of these development agreements. The Company recognizes revenue received from the provision of research and development services, including the upfront payment and the milestone payments received before January 1, 2011 on a straight-line basis over the expected period of performance of the research and development services. The Company recognizes revenue received from the achievement of contingent research and development milestones after January 1, 2011 in the period such payment is earned. Royalty fee income, if any, will be recognized by the Company in the period when the revenue is earned.


Shipping and Handling Fees and Costs


Shipping and handling fees related to sales transactions are recorded as selling expense.  


Note 3 - Recent Accounting Pronouncements
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

3. RECENT ACCOUNTING PRONOUNCEMENTS


In March 2013, the FASB issued updated guidance on foreign currency matters. The update applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets within a foreign entity. The Company adopted this guidance on January 1, 2014 and the adoption did not have a material effect on its consolidated financial statements.


In July 2013, the FASB issued updated guidance related to presentation of an unrecognized tax benefit. The guidance requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss (NOL) carryforward, or similar tax loss, or tax credit carryforward, rather than as a liability under certain circumstances. The Company adopted this guidance on January 1, 2014 and the adoption did not have a material effect on its consolidated financial statements.


Note 4 - Investments
Investment [Text Block]

4. INVESTMENTS


Investments consist of commercial paper, corporate bonds and government sponsored enterprise obligations. The Company’s policy is to invest in only high quality “AAA-rated” or investment-grade securities. Investments in debt securities are accounted for as “held-to-maturity’ and are recorded at amortized cost, which approximates fair value, generally based upon observable market values of similar securities. The Company has historically held all investments in debt securities until maturity, and has the ability and intent to continue to do so. All of the Company’s investments have remaining contractual maturities of less than 12 months and are classified as short-term. Upon maturity, the Company uses a specific identification method.


A summary of short-term investments as of March 31, 2014 and December 31, 2013 is as follows:  


(in $000’s)

March 31, 2014

 

Amortized

Cost

   

Gross

Unrecognized

Gains

   

Gross

Unrecognized

Losses

   

Fair

Value

 

Commercial paper

  $ 104,516     $ 26     $ --     $ 104,542  

Corporate bonds

    156,539       7       (36 )     156,510  

Total short-term investments

  $ 261,055     $ 33     $ (36 )   $ 261,052  

(in $000’s)
December 31, 2013

 

Amortized

Cost

   

Gross

Unrecognized

Gains

   

Gross

Unrecognized

Losses

   

Fair

Value

 

Commercial paper

  $ 91,480     $ 26     $ --     $ 91,506  

Corporate bonds

    137,041       13       (21 )     137,033  

Total short-term investments

  $ 228,521     $ 39     $ (21 )   $ 228,539  

Note 5 - Accounts Receivable
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

5. ACCOUNTS RECEIVABLE


The composition of accounts receivable, net is as follows:


(in $000’s)  

March 31,

2014

   

December 31,

2013

 

Gross accounts receivable

  $ 246,374     $ 246,319  

Less: Rebate reserve

    (85,658 )     (88,449 )

Less: Chargeback reserve

    (32,766 )     (37,066 )

Less: Other deductions

    (8,429 )     (7,811 )

Accounts receivable, net

  $ 119,521     $ 112,993  

A roll forward of the rebate and chargeback reserves activity for the three months ended March 31, 2014 and the year ended December 31, 2013 is as follows:


(in $000’s)

Rebate reserve

 

March 31,

2014

   

December 31,

2013

 

Beginning balance

  $ 88,449     $ 46,011  

Provision recorded during the period

    53,124       193,288  

Credits issued during the period

    (55,915 )     (150,850 )

Ending balance

  $ 85,658     $ 88,449  

(in $000’s)

Chargeback reserve

 

March 31,

2014

   

December 31,

2013

 

Beginning balance

  $ 37,066     $ 18,410  

Provision recorded during the period

    103,944       389,707  

Credits issued during the period

    (108,244 )     (371,051 )

Ending balance

  $ 32,766     $ 37,066  

Other deductions include allowance for uncollectible amounts and cash discounts. The Company maintains an allowance for doubtful accounts for estimated losses resulting from amounts deemed to be uncollectible from its customers, with such allowances for specific amounts on certain accounts. The Company had an allowance for uncollectible amounts of $539,000 at March 31, 2014 and December 31, 2013.  


Note 6 - Inventory
Inventory Disclosure [Text Block]

6. INVENTORY


Inventory is stated at the lower of cost or market. Cost is determined using a standard cost method, and the cost flow assumption is first in, first out (“FIFO”) flow of goods. Standard costs are revised annually, and significant variances between actual costs and standard costs are apportioned to inventory and cost of goods sold based upon inventory turnover. Costs include materials, labor, quality control, and production overhead. Inventory is adjusted for short-dated, unmarketable inventory equal to the difference between the cost of inventory and the estimated value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by the Company, additional inventory write-downs may be required. Consistent with industry practice, the Company may build pre-launch inventories of certain products which are pending required approval from the FDA and/or resolution of patent infringement litigation, when, in the Company’s assessment, such action is appropriate to increase the commercial opportunity and FDA approval is expected in the near term and/or the litigation will be resolved in the Company’s favor. The Company accounts for all costs of idle facilities, excess freight and handling costs, and wasted materials (spoilage) as a current period charge in accordance with GAAP.


Inventory, net of carrying value reserves at March 31, 2014 and December 31, 2013 consisted of the following: 


(in $000’s)

 

March 31,

2014

   

December 31,

2013

 

Raw materials

  $ 26,059     $ 27,981  

Work in process

    3,115       1,434  

Finished goods

    52,032       47,416  

Total inventory

    81,206       76,831  

Less: Non-current inventory

    5,047       6,725  

Total inventory-current

  $ 76,159     $ 70,107  

Inventory carrying value reserves were $19,652,000 and $17,702,000 at March 31, 2014 and December 31, 2013, respectively. During the three month period ended March 31, 2013, the Company decided to discontinue the manufacture and distribution of certain unprofitable productsafter the Company conducted a strategic review of its currently manufactured generic product portfolio. As a result of this decision, the Company recorded an inventory reserve of $6.7 million related to the discontinued products. In addition, upon receipt of the Complete Response Letter for RYTARY™, the Company evaluated the impact of the expected delay of FDA approval on its ability to sell the associated inventory. The Company determined that a reserve of $5.0 million was appropriate and recorded this amount in the three month period ended March 31, 2013. During the three month period ended March 31, 2013, the Company also recorded a $6.4 million reserve for pre-launch inventory of a product manufactured for another third-party pharmaceutical company due to the anticipated delayed launch of such product as a result of the warning letterrelated to our Hayward, California manufacturing facility.The carrying value of unapproved inventory less reserves was $6,953,000 and $6,462,000 at March 31, 2014 and December 31, 2013, respectively.


The Company recognizes pre-launch inventories at the lower of its cost or the expected net selling price. Cost is determined using a standard cost method, which approximates actual cost, and assumes a FIFO flow of goods. Costs of unapproved products are the same as approved products and include materials, labor, quality control, and production overhead. When the Company concludes that FDA approval is expected within approximately six months for a drug product candidate, the Company may begin to schedule manufacturing process validation studies as required by the FDA to demonstrate the production process can be scaled up to manufacture commercial batches. Consistent with industry practice, the Company may build quantities of unapproved product inventory pending final FDA approval and/or resolution of patent infringement litigation, when, in the Company’s assessment, such action is appropriate to increase its commercial product opportunity, and FDA approval is expected in the near term, and/or the litigation will be resolved in the Company’s favor. The capitalization of unapproved pre-launch inventory involves risks, including, among other items, FDA approval may not occur; approvals may require additional or different testing and/or specifications than used for unapproved inventory, and in cases where the unapproved inventory is for a product subject to litigation, the litigation may not be resolved or settled in the Company’s favor. If any of these risks materialize and the launch of the unapproved product inventory is delayed or prevented, then the net carrying value of unapproved inventory may be partially or fully reserved. Generally, the selling price of a generic pharmaceutical product is at discount from the corresponding brand product selling price. Typically, a generic drug is easily substituted for the corresponding brand product, and once a generic product is approved, the pre-launch inventory is typically sold within the next three months. If the market prices become lower than the product inventory carrying costs, then the pre-launch inventory value is reduced to such lower market value. If the inventory produced exceeds the estimated market acceptance of the generic product and becomes short-dated, a carrying value reserve will be recorded. In all cases, the carrying value of the Company's pre-launch product inventory is lower than the respective estimated net selling prices.


To the extent inventory is not scheduled to be utilized in the manufacturing process and/or sold within twelve months of the balance sheet date, it is included as a component of other non-current assets. Amounts classified as non-current inventory consist of raw materials, net of valuation reserves. Raw materials generally have a shelf life of approximately three to five years, while finished goods generally have a shelf life of approximately two years.


Note 7 - Property, Plant and Equipment
Property, Plant and Equipment Disclosure [Text Block]

7. PROPERTY, PLANT AND EQUIPMENT


Property, plant and equipment, net consisted of the following:


(in $000’s)  

March 31,

2014

   

December 31,

2013

 

Land

  $ 5,773     $ 5,773  

Buildings and improvements

    141,179       139,657  

Equipment

    117,543       114,950  

Office furniture and equipment

    12,041       11,523  

Construction-in-progress

    16,900       15,910  

Property, plant and equipment, gross

  $ 293,436     $ 287,813  
                 

Less: Accumulated depreciation

    (103,775 )     (99,622 )

Property, plant and equipment, net

  $ 189,661     $ 188,191  

Note 8 - Goodwill and Intangible Assets
Goodwill and Intangible Assets Disclosure [Text Block]

8. GOODWILL AND INTANGIBLE ASSETS


Goodwill was $27,574,000 at March 31, 2014 and December 31, 2013, and the Company attributes the entire carrying amount of goodwill to the Global Division. Goodwill is tested at least annually for impairment or whenever events or changes in circumstances have occurred which could have a material adverse effect on the estimated fair value of the reporting unit, and thus indicate a potential impairment of the goodwill carrying value. The Company concluded the carrying value of goodwill was not impaired as of December 31, 2013.


Intangible assets consisted of the following:


(in $000’s)

March 31, 2014

 

Initial

Cost

   

Accumulated

Amortization

   

Impairment

     

Carrying

 Value
 

Amortized intangible assets:

                               

Zomig® product rights

  $ 41,783     $ (29,371 )   $ ---     $ 12,412  

Tolmar product rights

    31,450       (4,966 )     (16,032 )     10,452  

Other product rights

    2,250       ---       (750 )     1,500  

Total intangible assets

  $ 75,483     $ (34,337 )   $ (16,782 )   $ 24,364  

(in $000’s)

December 31, 2013

 

Initial

Cost

   

Accumulated

Amortization

   

Impairment

     

Carrying

Value 
 

Amortized intangible assets:

                               

Zomig® product rights

  $ 41,783     $ (28,641 )   $ ---     $ 13,142  

Tolmar product rights

    31,450       (3,266 )     (13,156 )     15,028  

Other product rights

    2,250       ---       (750 )     1,500  

Total intangible assets

  $ 75,483     $ (31,907 )   $ (13,906 )   $ 29,670  

The Zomig® product rights under the Distribution, License, Development and Supply Agreement (“AZ Agreement”) with AstraZeneca UK Limited (“AstraZeneca”) were amortized on a straight-line basis over a period of 14 months starting in April 2012 and ending upon the expiration of the underlying patent for the tablet and over a period of 11 months starting in July 2012 and ending upon the expiration of the underlying patent for the orally disintegrating tablet. The Zomig® product rights under the AZ Agreement are also being amortized over a period of 72 months starting in July 2012 for the nasal spray. In June 2012, the Company entered into a Development, Supply and Distribution Agreement (the “Tolmar Agreement”) with TOLMAR, Inc. (“Tolmar”). Under the terms of the Tolmar Agreement, Tolmar granted to the Company an exclusive license to commercialize up to 11 generic topical prescription drug products, including ten currently approved products and one product pending approval at the FDA, in the United States and its territories. Under the terms of the Tolmar Agreement, Tolmar is responsible for developing and manufacturing the products, and the Company is responsible for the marketing and sale of the products. During the three month period ended September 30, 2013, as a result of the most recent market share data obtained by the Company and the Company’s revised five year projections for the Tolmar product lines, the Company performed an intangible asset impairment test on the Tolmar products. Based on the results of the impairment analysis, the Company recorded a $13.2 million impairment charge to cost of revenues for the Global Division in the three month period ended September 30, 2013. During the period ended March 31, 2014, as a result of a further decline in pricing, the Company revised its projections and performed an intangible asset impairment analysis. Based on the results of this analysis, the Company recorded a $2.9 million charge to cost of revenues for the Global Pharmaceuticals Division, which was 100% of the remaining net book value of this asset. The remaining carrying value of the Tolmar product rights are being amortized over the remaining estimated useful lives of the underlying products over a period ranging from five to 12 years, starting upon commencement of commercialization activities by the Company during the year ended December 31, 2012. Information concerning the AZ Agreement and the Tolmar Agreement can be found in “Note 12 - Alliance and Collaboration Agreements.” Other product rights consist of Abbreviated New Drug Applications (“ANDAs”) which have been filed with the FDA. During the three month period ended September 30, 2013, as a result of a decision by management to withdraw one of these ANDAs and no longer seek FDA approval, the Company recorded an intangible asset impairment charge of $0.8 million in research and development expense, representing the full carrying value of the ANDA. For the remaining ANDAs, the Company will either commence amortization upon FDA approval and commercializationover the estimated useful life of the product rights, or will expense the related costs immediately upon failure to obtain FDA approval. Amortization expense is included as a component of cost of revenues on the consolidated statement of operations and was $2,430,000 and $7,142,000 for the three month periods ended March 31, 2014 and 2013, respectively.


The following schedule shows the expected amortization of the Zomig® and Tolmar product rights as of March 31, 2014 for the next five years and thereafter: 


(in $000s)

 

Amortization

Expense

 

2014

  $ 6,891  

2015

    4,835  

2016

    3,709  

2017

    3,573  

2018

    1,984  

Thereafter

    1,872  

Totals

  $ 22,864  

Note 9 - Accrued Expenses, Commitments and Contingencies
Accrued Liabilities Disclosure [Text Block]

9. ACCRUED EXPENSES, COMMITMENTS AND CONTINGENCIES


The following table sets forth the Company’s accrued expenses:  


(in $000’s)

 

March 31,

2014

   

December 31,

2013

 

Payroll-related expenses

  $ 19,509     $ 27,985  

Product returns

    27,883       28,089  

Government rebates

    17,387       23,351  
Accrued shelf-stock     1,101       774  

Legal and professional fees

    5,647       3,162  

Income taxes payable

    4,352       21,186  

Physician detailing sales force fees

    361       1,512  

Other

    5,512       5,464  

Total accrued expenses

  $ 81,752     $ 111,523  

Product Returns


The Company maintains a return policy to allow customers to return product within specified guidelines. At the time of sale, the Company estimates a provision for product returns based upon historical experience for sales made through its Global Products and Impax Products sales channels. Sales of product under the Private Label, Rx Partner and OTC Partner alliance and collaboration agreements are generally not subject to returns. A roll forward of the product return reserve for the three month period ended March 31, 2014 and the year ended December 31, 2013 is as follows:


(in $000’s)

Returns Reserve

 

March 31,

2014

   

December 31,

2013

 

Beginning balance

  $ 28,089     $ 23,440  

Provision related to sales recorded in the period

    1,475       11,015  

Credits issued during the period

    (1,681 )     (6,366 )

Ending balance

  $ 27,883     $ 28,089  

Taiwan Facility Construction


The Company has entered into several contracts relating to ongoing construction at its manufacturing facility located in Jhunan, Taiwan, R.O.C. As of March 31, 2014, the Company had remaining obligations under these contracts of approximately $8,030,000.


Purchase Order Commitments


As of March 31, 2014, the Company had $63,684,000 of open purchase order commitments, primarily for raw materials. The terms of these purchase order commitments are less than one year in duration.


Note 10 - Income Taxes
Income Tax Disclosure [Text Block]

10. INCOME TAXES


The Company calculates its interim income tax provision in accordance with FASB ASC Topics 270 and 740. At the end of each interim period, the Company makes an estimate of the annual United States domestic and foreign jurisdictions’ expected effective tax rates and applies these rates to its respective year-to-date taxable income or loss. The computation of the annual estimated effective tax rates at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year, projections of the proportion of income (or loss) earned and taxed in the United States, and the various state and local tax jurisdictions, as well as tax jurisdictions outside the United States, along with permanent differences, and the likelihood of deferred tax asset utilization. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired or additional information is obtained. The computation of the annual estimated effective tax rate includes modifications, which were projected for the year, for share-based compensation and state research and development credits, among others. In addition, the effect of changes in enacted tax laws, rates, or tax status is recognized in the interim period in which the respective change occurs.


During the three month period ended March 31, 2014, the Company recognized an aggregate consolidated tax provision of $2,205,000 for United States domestic and foreign income taxes. In the three month period ended March 31, 2013, the Company recognized an aggregate consolidated tax provision of $48,278,000 for United States domestic and foreign income taxes. The decrease in the tax provision resulted from lower consolidated income before taxes in the three month period ended March 31, 2014, as compared to the same period in the prior year. The effective tax rate of 26% for the three month period ended March 31, 2014 was lower than the effective tax rate of 31% for the prior year period primarily as a result of a change in the timing and mix of U.S. and foreign income; the exclusion of a zero-rate jurisdiction from the interim effective tax rate calculation; and an increase in the deferred tax asset related to a state research and development tax credit carryforward in a state with indefinite carryforwards.


Note 11 - Revolving Line of Credit
Line Of Credit Facilities [Text Block]

11. REVOLVING LINE OF CREDIT


The Company has a Credit Agreement, as amended (the “Credit Agreement”) with Wells Fargo Bank, N.A., as a lender and as administrative agent (the “Administrative Agent”). The Credit Agreement provides the Company with a revolving line of credit in the aggregate principal amount of up to $50,000,000 (the “Revolving Credit Facility”). Under the Revolving Credit Facility, up to $10,000,000 is available for letters of credit, the outstanding face amounts of which reduce availability under the Revolving Credit Facility on a dollar for dollar basis. Proceeds under the Credit Agreement may be used for working capital, general corporate and other lawful purposes. The Company has not yet borrowed any amounts under the Revolving Credit Facility.


The Company’s borrowings under the Credit Agreement are secured by substantially all of the personal property assets of the Company pursuant to a Security Agreement (the “Security Agreement”) entered into by the Company and the Administrative Agent. As further security, the Company also pledged to the Administrative Agent, 65% of the Company’s equity interest in its wholly owned subsidiary Impax Laboratories (Taiwan), Inc., all of the Company’s equity interests in its wholly owned domestic subsidiaries and must similarly pledge all or a portion of its equity interest in future subsidiaries. Under the Credit Agreement, among other things:


 

The outstanding principal amount of all revolving credit loans, together with accrued and unpaid interest thereon, will be due and payable on the maturity date, which will occur on February 11, 2015.


 

Borrowings under the Revolving Credit Facility will bear interest, at the Company’s option, at either an Alternate Base Rate (as defined in the Credit Agreement) plus the applicable margin in effect from time to time ranging from 0.5% to 1.5%, or a LIBOR Rate (as defined in the Credit Agreement) plus the applicable margin in effect from time to time ranging from 1.5% to 2.5%. The Company is also required to pay an unused commitment fee ranging from 0.25% to 0.45% per annum based on the daily average undrawn portion of the Revolving Credit Facility. The applicable margin described above and the unused commitment fee in effect at any given time will be determined based on the Company’s Total Net Leverage Ratio (as defined in the Credit Agreement), which is based upon the Company’s consolidated total debt, net of unrestricted cash in excess of $100 million, compared to Consolidated EBITDA (as defined in the Credit Agreement) for the immediately preceding four quarters.


 

The Company may prepay any outstanding loan under the Revolving Credit Facility without premium or penalty.


 

The Company is required under the Credit Agreement and the Security Agreement to comply with a number of affirmative, negative and financial covenants. Among other things, these covenants (i) require the Company to provide periodic reports, notices of material events and information regarding collateral, (ii) restrict the Company’s ability, subject to certain exceptions and baskets, to incur additional indebtedness, grant liens on assets, undergo fundamental changes, change the nature of its business, make investments, undertake acquisitions, sell assets, make restricted payments (including the ability to pay dividends and repurchase stock) or engage in affiliate transactions, and (iii) require the Company to maintain a Total Net Leverage Ratio (which is, generally, total funded debt, net of unrestricted cash in excess of $100 million, over EBITDA for the preceding four quarters) of less than 3.75 to 1.00, a Senior Secured Leverage Ratio (which is, generally, total senior secured debt over EBITDA for the preceding four quarters) of less than 2.50 to 1.00, Consolidated EBITDA of at least $50.0 million and Minimum Liquidity (which is, generally unrestricted cash and cash equivalents) of at least $100.0 million. As of March 31, 2014, the Company was in compliance with the various covenants contained in the Credit Agreement and the Security Agreement.


 

The Credit Agreement contains customary events of default (subject to customary grace periods, cure rights and materiality thresholds), including, among others, failure to pay principal, interest or fees, violation of covenants, material inaccuracy of representations and warranties, cross-default and cross-acceleration of material indebtedness and other obligations, certain bankruptcy and insolvency events, certain judgments, certain events related to the Employee Retirement Income Security Act of 1974, as amended, and a change of control.


 

Following an event of default under the Credit Agreement, the Administrative Agent would be entitled to take various actions, including the acceleration of amounts due under the Credit Agreement and seek other remedies that may be taken by secured creditors.


During the three month periods ended March 31, 2014 and 2013, unused line fees incurred under the Credit Agreement were $31,000 and $30,000, respectively.


Note 12 - Alliance and Collaboration Agreements
Collaborative Arrangement Disclosure [Text Block]

12. ALLIANCE AND COLLABORATION AGREEMENTS


The Company has entered into several alliance, collaboration, license and distribution agreements, and similar agreements with respect to certain of its products and services, with unrelated third-party pharmaceutical companies. The consolidated statement of operations includes revenue recognized under agreements the Company has entered into to develop marketing and/or distribution relationships with its partners to fully leverage its technology platform and revenue recognized under development agreements which generally obligate the Company to provide research and development services over multiple periods.


The Company’s alliance and collaboration agreements often include milestones and provide for milestone payments upon achievement of these milestones. Generally, the milestone events contained in the Company’s alliance and collaboration agreements coincide with the progression of the Company’s products and technologies from pre-commercialization to commercialization.


The Company groups pre-commercialization milestones in its alliance and collaboration agreements into clinical and regulatory categories, each of which may include the following types of events:


Clinical Milestone Events:


 

Designation of a development candidate. Following the designation of a development candidate, generally, IND-enabling animal studies for a new development candidate take 12 to 18 months to complete.

     
 

Initiation of a Phase I clinical trial. Generally, Phase I clinical trials take one to two years to complete.

     
 

Initiation or completion of a Phase II clinical trial. Generally, Phase II clinical trials take one to three years to complete.

     
 

Initiation or completion of a Phase III clinical trial. Generally, Phase III clinical trials take two to four years to complete.

     
 

Completion of a bioequivalence study. Generally, bioequivalence studies take three months to one year to complete.


Regulatory Milestone Events:


 

Filing or acceptance of regulatory applications for marketing approval such as a New Drug Application in the United States or Marketing Authorization Application in Europe. Generally, it takes six to twelve months to prepare and submit regulatory filings and approximately two months for a regulatory filing to be accepted for substantive review.

     
 

Marketing approval in a major market, such as the United States or Europe. Generally it takes one to three years after an application is submitted to obtain approval from the applicable regulatory agency.

     
 

Marketing approval in a major market, such as the United States or Europe for a new indication of an already-approved product. Generally it takes one to three years after an application for a new indication is submitted to obtain approval from the applicable regulatory agency.


Commercialization milestones in the Company’s alliance and collaboration agreements may include the following types of events:


 

First commercial sale in a particular market, such as in the United States or Europe.


 

Product sales in excess of a pre-specified threshold, such as annual sales exceeding $100 million. The amount of time to achieve this type of milestone depends on several factors including but not limited to the dollar amount of the threshold, the pricing of the product and the pace at which customers begin using the product.


License and Distribution Agreement with Shire


In January 2006, the Company entered into a License and Distribution Agreement with an affiliate of Shire Laboratories, Inc. (“Prior Shire Agreement”), under which the Company received a non-exclusive license to market and sell an authorized generic of Shire’s Adderall XR® product (“AG Product”) subject to certain conditions, but in any event by no later than January 1, 2010. The Company commenced sales of the AG Product in October 2009. On February 7, 2013, the Company entered into an Amended and Restated License and Distribution Agreement with Shire (the “Amended and Restated Shire Agreement”), which amended and restated the Prior Shire Agreement. The Amended and Restated Shire Agreement was entered into by the parties in connection with the settlement of the Company’s litigation with Shire relating to Shire’s supply of the AG Product to the Company under the Prior Shire Agreement. During the three month period ended March 31, 2013, the Company received a payment in the amount of $48,000,000 from Shire in connection with such litigation settlement, which was recorded in the first quarter of 2013 as "Other Income" on the consolidated statement of operations. The Amended and Restated Shire Agreement provides for Shire to supply the AG Product and for the Company to market and sell the AG Product subject to the terms and conditions thereof until the earlier of (i) the first commercial sale of the Company’s generic equivalent product to Adderall XR® and (ii) September 30, 2014 (the “Supply Term”), subject to certain continuing obligations of the parties upon expiration or early termination of the Supply Term, including Shire’s obligation to deliver AG Products still owed to the Company as of the end of the Supply Term. The Company is required to pay a profit share to Shire on sales of the AG Product, of which the Company owed a profit share payable to Shire of $4,447,000 and $5,640,000 on sales of the AG Product during the three month periods ended March 31, 2014 and 2013, respectively, with a corresponding charge included in the cost of revenues line on the consolidated statement of operations.


Development, Supply and Distribution Agreement with TOLMAR, Inc.


In June 2012, the Company entered into the Tolmar Agreement with Tolmar. Under the terms of the Tolmar Agreement, Tolmar granted to the Company an exclusive license to commercialize up to 11 generic topical prescription drug products, including ten currently approved products and one product pending approval at the FDA, in the United States and its territories. Under the terms of the Tolmar Agreement, Tolmar is responsible for developing and manufacturing the products, and the Company is responsible for marketing and sale of the products. The Company is required to pay a profit share to Tolmar on sales of each product commercialized pursuant to the terms of the Tolmar Agreement. The Company owed a profit share payable to Tolmar of $2,961,000 and $490,000 during the three month periods ended March 31, 2014 and 2013, respectively, with a corresponding charge included in the cost of revenues line on the consolidated statement of operations. The Company paid Tolmar a $21,000,000 upfront payment upon signing of the agreement and a $1,000,000 milestone payment in the year ended December 31, 2012. The Company has the potential to pay up to $24,000,000 in additional contingent milestone payments if certain commercialization and regulatory events occur. The upfront payment for the Tolmar product rights has been allocated to the underlying topical products based upon the relative fair value of each product and is being amortized over the remaining estimated useful life of each underlying product, ranging from five to 12 years, starting upon commencement of commercialization activities by the Company during the second half of 2012. The amortization of the Tolmar product rights is included as a component of cost of revenues on the consolidated statement of operations. The Company initially allocated $1,550,000 of the upfront payment to two products which are still in development and recorded such amount as in-process research and development expense in its results of operations for the year ended December 31, 2012. The Company similarly recorded the $1,000,000 milestone paid in the year ended December 31, 2012 as a research and development expense. Contingent milestone payments will be initially recognized in the period the triggering event occurs. Milestone payments which are contingent upon commercialization events will be accounted for as an additional cost of acquiring the product license rights. Milestone payments that are contingent upon regulatory approval events will be capitalized and amortized over the remaining estimated useful life of the approved product. As discussed in “Note 8 – Goodwill and Intangible Assets,” the Company recorded intangible asset impairment charges to cost of revenues of $13.2 million in the three month period ended September 30, 2013 and $2.9 million in the three month period ended March 31, 2014 related to the Tolmar product rights acquired under the Tolmar Agreement. During the fourth quarter of 2013, the Company made a $12.0 million payment to Tolmar upon Tolmar’s achievement of a regulatory milestone event in accordance with the terms of the Tolmar Agreement.


The Company entered into a Loan and Security Agreement with Tolmar in March 2012 (the “Tolmar Loan Agreement”), under which the Company has agreed to lend to Tolmar one or more loans through December 31, 2014, in an aggregate amount not to exceed $15,000,000. As of March 31, 2014, Tolmar has borrowed $15,000,000 under the Tolmar Loan Agreement. The outstanding principal amount of, including any accrued and unpaid interest on, the loans under the Tolmar Loan Agreement are payable by Tolmar beginning from March 31, 2017 through March 31, 2020 or the maturity date, in accordance with the terms therein. Tolmar may prepay all or any portion of the outstanding balance of the loans prior to the maturity date without penalty or premium.


Strategic Alliance Agreement with Teva


The Company entered into a Strategic Alliance Agreement with Teva in June 2001 (“Teva Agreement”). The Teva Agreement commits the Company to develop and manufacture, and Teva to distribute, a specified number of controlled release generic pharmaceutical products (“generic products”), each for a 10-year period. The Company identified the following deliverables under the Teva Agreement: (i) the manufacture and delivery of generic products; (ii) the provision of research and development activities (including regulatory services) related to each product; and (iii) market exclusivity associated with the products. In July 2010, the Teva Agreement was amended to terminate the provisions of the Teva Agreement with respect to the Omeprazole (generic to Prilosec®) 10mg, 20mg and 40mg products. Additionally, in exchange for the return of product rights, the Company agreed to pay to Teva a profit share on future sales of the fexofenadine HCI/pseudoephedrine (generic to Allegra-D®) product, if any, but in no event will such profit share payments exceed an aggregate amount of $3,000,000. The Company recognized previously deferred revenue related to the Teva Agreement of $327,000 in the three month periods ended March 31, 2014 and 2013. No additional amounts were deferred during the three month periods ended March 31, 2014 and 2013.


OTC Partners Alliance Agreement


In June 2002, the Company entered into a Development, License and Supply Agreement with Pfizer Inc. (formerly Wyeth) (the “Pfizer Agreement”), for a term of approximately 15 years, relating to the Company’s Loratadine and Pseudoephedrine Sulfate 5 mg/120 mg 12-hour Extended Release Tablets and Loratadine and Pseudoephedrine Sulfate 10 mg/240 mg 24-hour Extended Release Tablets for the OTC market. The Pfizer Agreement included payments to the Company upon achievement of development milestones, as well as royalties paid to the Company by Pfizer on its sales of the product. Pfizer launched this product in May 2003 as Alavert® D-12 Hour. In February 2005, the agreement was partially cancelled with respect to the 24-hour Extended Release Product due to lower than planned sales volume. In December 2011, Pfizer and the Company entered into an agreement with L. Perrigo Company whereby the parties agreed that the Company would supply the Company’s Loratadine and Pseudoephedrine Sulfate 5 mg/120 mg 12-hour Extended Release Tablets to Perrigo in the United States and its territories (the “Perrigo Agreement”). The Company previously developed the products, and is currently only responsible for manufacturing the products, and Pfizer and Perrigo are responsible for marketing and sale of the products. The Pfizer and Perrigo Agreements are no longer a core area of the Company’s business, and the over-the-counter pharmaceutical products the Company sells under both agreements are older products which are only sold to Pfizer and to Perrigo, and which are sold at a loss, on a fully absorbed basis. The Company recognizes profit share revenue in the period earned.


Joint Development Agreement with Valeant Pharmaceuticals International, Inc.


In November 2008, the Company and Valeant Pharmaceuticals International, Inc., formerly Medicis Pharmaceutical Corporation (“Valeant”), entered into a Joint Development Agreement (“Joint Development Agreement”) and a License and Settlement Agreement. The Joint Development Agreement provides for the Company and Valeant to collaborate in the development of a total of five dermatology products, including four of the Company’s generic products and one branded advanced form of Valeant’s SOLODYN® product. Under the provisions of the Joint Development Agreement the Company received a $40,000,000 upfront payment, paid by Valeant in December 2008. The Company has also received an aggregate of $15,000,000 in milestone payments composed of two $5,000,000 milestone payments, paid by Valeant in March 2009 and September 2009, a $2,000,000 milestone payment paid by Valeant in December 2009, and a $3,000,000 milestone payment paid by Valeant in March 2011. The Company has the potential to receive up to an additional $8,000,000 of contingent regulatory milestone payments each of which the Company believes to be substantive, as well as the potential to receive royalty payments from sales, if any, by Valeant of its advanced form SOLODYN® brand product. Finally, to the extent the Company commercializes any of its four generic dermatology products covered by the Joint Development Agreement, the Company will pay to Valeant a gross profit share on sales of such products. The Company began selling one of the four dermatology products during the year ended December 31, 2011. During the three month period ended March 31, 2013, the Company extended the revenue recognition period for the Joint Development Agreement from the previous recognition period ending in November 2013 to December 2014, due to changes in the estimated timing of completion of certain research and development activities. This change was made on a prospective basis, and resulted in a reduced quarterly amount of revenue recognized in 2013 and the first quarter of 2014, as compared to prior year quarters, and a reduced periodic amount of revenue to be recognized in future periods.


License, Development and Commercialization Agreement & Supply Agreement with Glaxo Group Limited


In December 2010, the Company entered into a License, Development and Commercialization Agreement with Glaxo Group Limited (“GSK”). Under the terms of the agreement with GSK, GSK received an exclusive license to develop and commercialize IPX066 (brand name RYTARY™ in the United States) throughout the world, except in the United States and Taiwan, and certain follow-on products at the option of GSK. Under the terms of the agreement, GSK paid an $11,500,000 upfront payment in December 2010, and the Company had the potential to receive up to $169,000,000 of contingent milestone payments. The upfront payment was recognized as revenue on a straight-line basis over the Company’s expected period of performance to provide research and development services which ended on December 31, 2012. In April 2013, the Company and GSK announced that they were terminating their collaboration for the development and commercialization of IPX066 outside the United States and Taiwan as a result of delays in the anticipated regulatory approval and launch dates in countries in which GSK has rights to commercialize the product and terminated the License, Development and Commercialization Agreement. At the end of July 2013, GSK’s rights to develop and commercialize IPX066 outside the United States and Taiwan were transferred back to the Company.


Distribution, License, Development and Supply Agreement with AstraZeneca UK Limited


In January 2012, the Company entered into the AZ Agreement with AstraZeneca. Under the terms of the AZ Agreement, AstraZeneca granted to the Company an exclusive license to commercialize the tablet, orally disintegrating tablet and nasal spray formulations of Zomig® (zolmitriptan) products for the treatment of migraine headaches in the United States and in certain United States territories, except during an initial transition period when AstraZeneca fulfilled all orders of Zomig® products on the Company’s behalf and AstraZeneca paid to the Company the gross profit on such Zomig® products. The Company is obligated to fulfill certain minimum requirements with respect to the promotion of currently approved Zomig® products as well as other dosage strengths of such products approved by the FDA in the future. The Company may, but has no obligation to, develop and commercialize additional products containing zolmitriptan and additional indications for Zomig®, subject to certain restrictions as set forth in the AZ Agreement. The Company will be responsible for conducting clinical studies and preparing regulatory filings related to the development of any such additional products and would bear all related costs. During the term of the AZ Agreement, AstraZeneca will continue to be the holder of the NDA for existing Zomig® products, as well as any future dosage strengths thereof approved by the FDA, and will be responsible for certain regulatory and quality-related activities for such Zomig® products. AstraZeneca will manufacture and supply Zomig® products to the Company and the Company will purchase its requirements of Zomig® products from AstraZeneca until a date determined in the AZ Agreement. Thereafter, AstraZeneca may terminate its supply obligations upon certain advance notice to the Company, in which case the Company would have the right to manufacture or have manufactured its own requirements for the applicable Zomig® product.


Beginning in January 2013, the Company is obligated to pay AstraZeneca tiered royalties on net sales of Zomig® products, depending on brand exclusivity and subject to customary reductions and other terms and conditions set forth in the AZ Agreement. The Company owed a royalty payable to AstraZeneca of $2,615,000 and $16,282,000 during the three month periods ended March 31, 2014 and 2013, respectively, with a corresponding charge included in the cost of revenues line on the consolidated statement of operations. The Company is also obligated to pay AstraZeneca royalties after a certain specified date based on gross profit from sales of authorized generic versions of the Zomig products subject to certain terms and conditions set forth in the AZ Agreement. In May 2013, the Company’s exclusivity period for branded Zomig® tablets and orally disintegrating tablets expired and the Company launched authorized generic versions of those products in the United States.


Development and Co-Promotion Agreement with Endo Pharmaceuticals, Inc.


In June 2010, the Company and Endo Pharmaceuticals, Inc. ("Endo") entered into a Development and Co-Promotion Agreement (“Endo Agreement”) under which the Company and Endo have agreed to collaborate in the development and commercialization of a next-generation advanced form of the Company’s lead brand product candidate ("Endo Agreement Product"). Under the provisions of the Endo Agreement, in June 2010, Endo paid to the Company a $10,000,000 upfront payment. The Company has the potential to receive up to an additional $30,000,000 of contingent milestone payments, which includes $15,000,000 contingent upon the achievement of clinical events, $5,000,000 contingent upon the achievement of regulatory events, and $10,000,000 contingent upon the achievement of commercialization events. The Company believes all milestones under the Endo Agreement are substantive. Upon commercialization of the Endo Agreement Product in the United States, Endo will have the right to co-promote such product to non-neurologists, which will require the Company to pay Endo a co-promotion service fee of up to 100% of the gross profits attributable to prescriptions for the Endo Agreement Product which are written by the non-neurologists.


The Company is recognizing the $10,000,000 upfront payment as revenue on a straight-line basis over a period of 103 months, which is the estimated expected period of performance of research and development activities under the Endo Agreement, commencing with the June 2010 effective date of the Endo Agreement and ending in December 2018, the estimated date of FDA approval of the Company's NDA. The FDA approval of the Endo Agreement Product NDA represents the end of the Company’s expected period of performance, as the Company will have no further contractual obligation to perform research and development activities under the Endo Agreement, and therefore the earnings process will be completed. Deferred revenue is recorded as a liability captioned “Deferred revenue” on the consolidated balance sheet and deferred revenue under the Endo Agreement was $5,071,000 as of March 31, 2014. Revenue recognized under the Endo Agreement is reported in the line item “Other Revenues” in “Note 18 - Supplementary Financial Information.” The Company determined the straight-line method aligns revenue recognition with performance as the level of research and development activities performed under the Endo Agreement are expected to be performed on a ratable basis over the Company’s estimated expected period of performance. Upon FDA approval of the Company’s Endo Agreement Product NDA, the Company will have the right (but not the obligation) to begin manufacture and sale of such product. The Company will sell its manufactured branded product to customers in the ordinary course of business through its Impax Pharmaceuticals Division. The Company will account for any sale of the product covered by the Endo Agreement as current period revenue. The co-promotion service fee paid to Endo, as described above, if any, will be accounted for as a current period selling expense as incurred.


The Company and Endo also entered into a Settlement and License Agreement in June 2010 (the “Endo Settlement Agreement”) pursuant to which Endo agreed to make a payment to the Company should Prescription Sales of Opana® ER (as defined in the Endo Settlement Agreement) fall below a predetermined contractual threshold in the quarter immediately prior to the Company launching a generic version of Opana® ER. As a result of the Company’s launch of its generic version of Opana ER in January 2013 and Endo’s Prescription Sales of Opana ER during the fourth quarter of 2012, the Company recorded a $102,049,000 settlement gain during the three month period ended March 31, 2013, which is included in “Other Income” in the consolidated statement of operations.


Agreement with DURECT Corporation


During the three month period ended March 31, 2014, the Company entered into an agreement with DURECT Corporation (“Durect”) granting Impax the exclusive worldwide rights to develop and commercialize DURECT’s investigational transdermal bupivacaine patch for the treatment of pain associated with post-herpetic neuralgia (PHN), referred to by the Company as IPX239. The Company paid Durect a $2,000,000 up-front payment upon signing of the agreement. The Company has the potential to pay up to $61,000,000 in additional contingent milestone payments upon the achievement of predefined development and commercialization milestones. If IPX239 is commercialized, Durect would also receive a tiered royalty on product sales.


Note 13 - Share-Based Compensation
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

13. SHARE-BASED COMPENSATION


The Company recognizes the grant date fair value of each stock option and restricted stock award over its vesting period. Stock options and restricted stock awards are granted under the Company’s Second Amended and Restated 2002 Equity Incentive Plan (“2002 Plan”) and generally vest over a three or four year period and have a term of ten years. Total share-based compensation expense recognized in the consolidated statement of operations during the three month periods ended March 31, 2014 and 2013 was as follows:  


   

Three Months Ended

March 31,

 

(in $000’s)

 

2014

   

2013

 

Manufacturing expenses

  $ 896     $ 673  

Research and development

    1,402       1,376  

Selling, general and administrative

    2,088       2,310  

Total

  $ 4,386     $ 4,359  

The following table summarizes stock option activity during the three month period ended March 31, 2014:  


     

Number of Shares
Under Option

     

Weighted Average
Exercise Price
per Share

 

Outstanding at December 31, 2013

    3,770,905     $ 14.01  

Options granted

    3,000     $ 25.18  

Options exercised

    (364,953 )   $ 15.99  
Options forfeited     (18,553 )   $ 20.93  

Outstanding at March 31, 2014

    3,390,399     $ 13.77  

Options exercisable at March 31, 2014

    2,476,479     $ 11.41  

The Company estimated the fair value of each stock option award on the grant date using the Black-Scholes option pricing model. Expected volatility is based solely on historical volatility of the Company’s common stock. The expected term calculation is based on the “simplified” method described in SAB No. 107, Share-Based Payment and SAB No. 110, Share-Based Payment, as the result of the simplified method provides a reasonable estimate in comparison to the Company’s actual experience. The risk-free interest rate is based on the U.S. Treasury yield at the date of grant for an instrument with a maturity that is commensurate with the expected term of the stock options. The dividend yield of zero is based on the fact that the Company has never paid cash dividends on its common stock, and has no present intention to pay cash dividends.


A summary of the Company’s non-vested restricted stock awards activity during the three month period ended March 31, 2014 is presented below:  


Restricted Stock Awards

 

Number of Restricted

Stock Awards

   

Weighted Average

Grant Date

Fair Value

 

Non-vested at December 31, 2013

    2,123,835     $ 21.13  

Granted

    29,950     $ 25.18  

Vested

    (30,041 )   $ 20.68  

Forfeited

    (31,439 )   $ 21.47  

Non-vested at March 31, 2014

    2,092,305     $ 21.19  

The Company grants restricted stock awards to certain eligible employees and directors as a component of its long-term incentive compensation program. The restricted stock award grants are made in accordance with the Company’s 2002 Plan, and typically specify that the shares of common stock underlying the restricted stock awards are not issued until they vest. The restricted stock awards generally vest ratably over a three or four year period from the date of grant.  


As of March 31, 2014, the Company had total unrecognized share-based compensation expense, net of estimated forfeitures, of $35,280,000 related to all of its share-based awards, which will be recognized over a weighted-average period of 1.98 years. As of March 31, 2014, the Company estimated 3,001,000 stock options and 1,852,000 shares of restricted stock awards granted to employees which were vested or expected to vest. The intrinsic value of stock options exercised during the three month periods ended March 31, 2014 and 2013 was $3,789,000 and $2,933,000, respectively. The total fair value of restricted stock awards which vested during the three month periods ended March 31, 2014 and 2013 was $621,000 and $613,000, respectively. As of March 31, 2014, the Company had 3,533,694 shares of common stock available for issuance of stock options, restricted stock awards, and/or stock appreciation rights.


Note 14 - Stockholders' Equity
Stockholders' Equity Note Disclosure [Text Block]

14. STOCKHOLDERS’ EQUITY


Preferred Stock


Pursuant to its certificate of incorporation, the Company is authorized to issue 2,000,000 shares, $0.01 par value per share, “blank check” preferred stock, which enables the Board of Directors, from time to time, to create one or more new series of preferred stock. Each series of preferred stock issued can have the rights, preferences, privileges and restrictions designated by the Board of Directors. The issuance of any new series of preferred stock could affect, among other things, the dividend, voting, and liquidation rights of the Company’s common stock. During the three month periods ended March 31, 2014 and 2013, the Company did not issue any preferred stock.


Common Stock


The Company’s certificate of incorporation, as amended, authorizes the Company to issue 90,000,000 shares of common stock with $0.01 par value.


Note 15 - Earnings Per Share
Earnings Per Share [Text Block]

15. EARNINGS PER SHARE


The Company's earnings per share (EPS) includes basic net income per share, computed by dividing net income (as presented on the consolidated statement of operations), by the weighted average number of shares of common stock outstanding for the period, along with diluted net income per share, computed by dividing net income by the weighted average number of shares of common stock adjusted for the dilutive effect of common stock equivalents outstanding during the period. A reconciliation of basic and diluted net income per share of common stock for the three month periods ended March 31, 2014 and 2013 was as follows:  


   

Three Months Ended
March 31,

 

(in $000’s except share and per share amounts)

 

2014

   

2013

 
                 

Numerator:

               

Net income

  $ 6,425     $ 105,442  
                 

Denominator:

               

Weighted average common shares outstanding

    67,702,296       66,487,470  
                 

Effect of dilutive stock options and restricted stock awards

    2,236,576       1,690,885  
                 

Diluted weighted average common shares outstanding

    69,938,872       68,178,355  
                 

Basic net income per share

  $ 0.09     $ 1.59  

Diluted net income per share

  $ 0.09     $ 1.55  

For the three month periods ended March 31, 2014 and 2013, the Company excluded 331,500 and 1,276,394, respectively, of shares issuable upon the exercise of stock options and unvested restricted stock awards from the computation of diluted net income per common share as the effect of these options and unvested restricted stock awards would have been anti-dilutive. Quarterly computations of net income per share amounts are made independently for each quarterly reporting period, and the sum of the per share amounts for the quarterly reporting periods may not equal the per share amounts for the year-to-date reporting period.  


Note 16 - Segment Information
Segment Reporting Disclosure [Text Block]

16. SEGMENT INFORMATION


The Company has two reportable segments, the Global Division and the Impax Division. The Global Division develops, manufactures, sells, and distributes generic pharmaceutical products, primarily through the following sales channels: the Global Products sales channel for sales of generic prescription products directly to wholesalers, large retail drug chains, and others; the Private Label Product sales channel for generic over-the-counter and prescription products sold to unrelated third-party customers who, in turn, sell the products under their own label; the Rx Partner sales channel for generic prescription products sold through unrelated third-party pharmaceutical entities under their own label pursuant to alliance agreements; and the OTC Partner sales channel for over-the-counter products sold through unrelated third-party pharmaceutical entities under their own labels pursuant to alliance and supply agreements. Revenues from the “Global Products” sales channel and the “Private Label” sales channel are reported under the caption “Global Product sales, net” in “Note 18 – Supplementary Financial Information.” The Company also generates revenue in its Global Division from research and development services provided under a joint development agreement with another unrelated third-party pharmaceutical company, and reports such revenue under the caption “Other Revenues” revenue in “Note 18 – Supplementary Financial Information.” Revenues from the “OTC Partner” sales channel are also reported under the caption “Other Revenues” in “Note 18 – Supplementary Financial Information.” On February 20, 2014, the Company announced plans to begin marketing and selling its allotment of a specified number of bottles of authorized generic RENVELA® tablets. Sales of the authorized generic RENVELA® tablets commenced April 2014. The Company continues to pursue the approval of its pending ANDA for generic RENVELA® with the FDA.


 The Impax Division is engaged in the development of proprietary brand pharmaceutical products that the Company believes represent improvements to already-approved pharmaceutical products addressing CNS disorders. The Impax Division currently has one internally developed late stage branded pharmaceutical product candidate, RYTARY™, an extended release capsule formulation of carbidopa-levodopa for the symptomatic treatment of Parkinson’s disease, for which the NDA was accepted for filing by the FDA in February 2012 and for which the Company received a Complete Response Letter from the FDA in January 2013. In April 2014, after discussions with the FDA, the Company resubmitted an NDA for RYTARY™. The NDA was accepted for filing by the FDA in April 2014 and the FDA has informed the Company that the Prescription Drug User Fee Act (“PDUFA”) date is October 9, 2014. The Company has also initiated the preparation of required documents for a European Market Authorization Application filing for RYTARY™, currently targeted for filing during the second half of 2014. In addition to RYTARY™, the Impax Division has a number of other product candidates that are in varying stages of development. The Impax Division is also engaged in the sale and distribution of Zomig® (zolmitriptan) products, indicated for the treatment of migraine headaches, under the terms of the AZ Agreement with AstraZeneca in the United States and in certain United States territories. Revenues from Impax-labeled branded Zomig® products are reported under the caption “Impax Product sales, net” in “Note 18 – Supplementary Financial Information.” Finally, the Company generates revenue in the Impax Division from research and development services provided under a development and license agreement with another unrelated third-party pharmaceutical company, and reports such revenue under the caption “Other Revenues” revenue in “Note 18 – Supplementary Financial Information.”


The Company’s chief operating decision maker evaluates the financial performance of the Company’s segments based upon segment income (loss) before income taxes. Items below income (loss) from operations are not reported by segment, except litigation settlements, since they are excluded from the measure of segment profitability reviewed by the Company’s chief operating decision maker. Additionally, general and administrative expenses, certain selling expenses, certain litigation settlements, and non-operating income and expenses are included in “Corporate and Other.” The Company does not report balance sheet information by segment since it is not reviewed by the Company’s chief operating decision maker. The accounting policies for the Company’s segments are the same as those described above in the discussion of "Revenue Recognition" and in the “Summary of Significant Accounting Policies” in the Company's Form 10-K for the year ended December 31, 2013. The Company has no inter-segment revenue.  


The tables below present segment information reconciled to total Company consolidated financial results, with segment operating income or loss including gross profit less direct research and development expenses and direct selling expenses as well as any litigation settlements, to the extent specifically identified by segment:  


(in $000’s)

Three Months Ended March 31, 2014

 

Global

Division

   

Impax

Division

   

Corporate

and Other

   

Total

Company

 

Revenues, net

  $ 109,141     $ 9,577     $ ---     $ 118,718  

Cost of revenues

    57,022       4,074       ---       61,096  

Research and development

    11,217       10,524       ---       21,741  

Patent litigation expense

    2,173       ---       ---       2,173  

Income (loss) before provision for income taxes

  $ 36,346     $ (14,242 )   $ (13,474 )   $ 8,630  

(in $000’s)

Three Months Ended March 31, 2013

 

Global

Division

   

Impax

Division

   

Corporate

and Other

   

Total

Company

 

Revenues, net

  $

101,636

    $ 46,853     $ ---     $ 148,489  

Cost of revenues

    61,444       29,174       ---       90,618  

Research and development

    11,711       7,894       ---       19,605  

Patent litigation expense

    4,278       ---       ---       4,278  

Income (loss) before provision for income taxes

  $ 19,160     $ (2,979 )   $ 137,539     $ 153,720  

Foreign Operations


The Company’s wholly owned subsidiary, Impax Laboratories (Taiwan) Inc., is constructing a manufacturing facility in Jhunan, Taiwan R.O.C. which is utilized for manufacturing, research and development, warehouse, and administrative functions, with approximately $139,784,000 of net carrying value of assets, composed principally of a building and equipment, included in the Company's consolidated balance sheet at March 31, 2014.  


Note 18 - Supplementary Financial Information (unaudited)
Quarterly Financial Information [Text Block]

18. SUPPLEMENTARY FINANCIAL INFORMATION (unaudited)


Selected financial information for the quarterly periods noted is as follows:


(in $000’s except shares and per share amounts)  

Quarter Ended:

March 31, 2014

 

Revenue:

       

Global Product sales, gross

  $ 265,850  

Less:

       

Chargebacks

    95,714  

Rebates

    52,054  

Product Returns

    1,294  

Other credits

    10,671  

Global Product sales, net

    106,117  
         

Rx Partner

    2,435  

Other Revenues

    589  

Global Division revenues, net

    109,141  
         

Impax Product sales, gross

    20,643  

Less:

       

Chargebacks

    8,230  

Rebates

    1,070  

Product Returns

    181  

Other credits

    1,853  

Impax Product sales, net

    9,309  
         

Other Revenues

    268  

Impax Division revenues, net

    9,577  
         

Total revenues

    118,718  
         

Gross profit

    57,622  
         

Net income

  $ 6,425  
         

Net income per share (basic)

  $ 0.09  

Net income per share (diluted)

  $ 0.09  
         

Weighted average: common shares outstanding:

       

Basic

    67,702,296  

Diluted

    69,938,872  

Quarterly computations of net income per share amounts are made independently for each quarterly reporting period, and the sum of the per share amounts for the quarterly reporting periods may not equal the per share amounts for the year-to-date reporting period.


Selected financial information for the quarterly periods noted is as follows: 


 (in $000’s except shares and per share amounts)  

Quarter Ended:

March 31, 2013

 

Revenue:

       

Global Product sales, gross

  $ 197,956  

Less:

       

Chargebacks

    64,345  

Rebates

    30,572  

Product Returns

    94  

Other credits

    5,160  

Global Product sales, net

    97,785  
         

Rx Partner

    3,114  

Other Revenues

    737  

Global Division revenues, net

    101,636  
         

Impax Product sales, gross

    69,292  

Less:

       

Chargebacks

    7,790  

Rebates

    6,236  

Product Returns

    1,490  

Other credits

    7,255  

Impax Product sales, net

    46,521  
         

Other Revenues

    332  

Impax Division revenues, net

    46,853  
         

Total revenues

    148,489  
         

Gross profit

    57,871  
         

Net income

  $ 105,442  
         

Net income per share (basic)

  $ 1.59  

Net income per share (diluted)

  $ 1.55  
         

Weighted average: common shares outstanding:

       

Basic

    66,487,470  

Diluted

    68,178,355  

Quarterly computations of net income per share amounts are made independently for each quarterly reporting period, and the sum of the per share amounts for the quarterly reporting periods may not equal the per share amounts for the year-to-date reporting period.  


Note 19 - Subsequent Events
Subsequent Events [Text Block]

19. SUBSEQUENT EVENTS


On April 21, 2014, the board of directors of the Company announced that it had appointed G. Frederick Wilkinson as the Company’s new President and Chief Executive Officer effective as of April 29, 2014. Mr. Wilkinson succeeds Larry Hsu, Ph.D. who retired from his positions as President and Chief Executive Officer of the Company.


In April 2014, after discussions with the FDA, the Company resubmitted an NDA for RYTARY™. The NDA was accepted for filing by the FDA in April 2014 and the FDA has informed the Company that the PDUFA date is October 9, 2014.  


Supplemental Cash Flow Information (Tables)
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]
      Three Months Ended  
(in $000's)     March 31,
2014 
     

March 31,

2013  

 

Cash paid for interest

  $ 1     $ 87  

Cash paid for income taxes

  $ 21,024     $ 222  
Note 4 - Investments (Tables)
Held-to-maturity Securities [Table Text Block]

(in $000’s)

March 31, 2014

 

Amortized

Cost

   

Gross

Unrecognized

Gains

   

Gross

Unrecognized

Losses

   

Fair

Value

 

Commercial paper

  $ 104,516     $ 26     $ --     $ 104,542  

Corporate bonds

    156,539       7       (36 )     156,510  

Total short-term investments

  $ 261,055     $ 33     $ (36 )   $ 261,052  

(in $000’s)
December 31, 2013

 

Amortized

Cost

   

Gross

Unrecognized

Gains

   

Gross

Unrecognized

Losses

   

Fair

Value

 

Commercial paper

  $ 91,480     $ 26     $ --     $ 91,506  

Corporate bonds

    137,041       13       (21 )     137,033  

Total short-term investments

  $ 228,521     $ 39     $ (21 )   $ 228,539  
Note 5 - Accounts Receivable (Tables)
(in $000’s)  

March 31,

2014

   

December 31,

2013

 

Gross accounts receivable

  $ 246,374     $ 246,319  

Less: Rebate reserve

    (85,658 )     (88,449 )

Less: Chargeback reserve

    (32,766 )     (37,066 )

Less: Other deductions

    (8,429 )     (7,811 )

Accounts receivable, net

  $ 119,521     $ 112,993  

(in $000’s)

Rebate reserve

 

March 31,

2014

   

December 31,

2013

 

Beginning balance

  $ 88,449     $ 46,011  

Provision recorded during the period

    53,124       193,288  

Credits issued during the period

    (55,915 )     (150,850 )

Ending balance

  $ 85,658     $ 88,449  

(in $000’s)

Chargeback reserve

 

March 31,

2014

   

December 31,

2013

 

Beginning balance

  $ 37,066     $ 18,410  

Provision recorded during the period

    103,944       389,707  

Credits issued during the period

    (108,244 )     (371,051 )

Ending balance

  $ 32,766     $ 37,066  
Note 6 - Inventory (Tables)
Schedule of Inventory, Current [Table Text Block]

(in $000’s)

 

March 31,

2014

   

December 31,

2013

 

Raw materials

  $ 26,059     $ 27,981  

Work in process

    3,115       1,434  

Finished goods

    52,032       47,416  

Total inventory

    81,206       76,831  

Less: Non-current inventory

    5,047       6,725  

Total inventory-current

  $ 76,159     $ 70,107  
Note 7 - Property, Plant and Equipment (Tables)
Property, Plant and Equipment [Table Text Block]
(in $000’s)  

March 31,

2014

   

December 31,

2013

 

Land

  $ 5,773     $ 5,773  

Buildings and improvements

    141,179       139,657  

Equipment

    117,543       114,950  

Office furniture and equipment

    12,041       11,523  

Construction-in-progress

    16,900       15,910  

Property, plant and equipment, gross

  $ 293,436     $ 287,813  
                 

Less: Accumulated depreciation

    (103,775 )     (99,622 )

Property, plant and equipment, net

  $ 189,661     $ 188,191  
Note 8 - Goodwill and Intangible Assets (Tables)

(in $000’s)

March 31, 2014

 

Initial

Cost

   

Accumulated

Amortization

   

Impairment

     

Carrying

 Value
 

Amortized intangible assets:

                               

Zomig® product rights

  $ 41,783     $ (29,371 )   $ ---     $ 12,412  

Tolmar product rights

    31,450       (4,966 )     (16,032 )     10,452  

Other product rights

    2,250       ---       (750 )     1,500  

Total intangible assets

  $ 75,483     $ (34,337 )   $ (16,782 )   $ 24,364  

(in $000’s)

December 31, 2013

 

Initial

Cost

   

Accumulated

Amortization

   

Impairment

     

Carrying

Value 
 

Amortized intangible assets:

                               

Zomig® product rights

  $ 41,783     $ (28,641 )   $ ---     $ 13,142  

Tolmar product rights

    31,450       (3,266 )     (13,156 )     15,028  

Other product rights

    2,250       ---       (750 )     1,500  

Total intangible assets

  $ 75,483     $ (31,907 )   $ (13,906 )   $ 29,670  

(in $000s)

 

Amortization

Expense

 

2014

  $ 6,891  

2015

    4,835  

2016

    3,709  

2017

    3,573  

2018

    1,984  

Thereafter

    1,872  

Totals

  $ 22,864  
Note 9 - Accrued Expenses, Commitments and Contingencies (Tables)

(in $000’s)

 

March 31,

2014

   

December 31,

2013

 

Payroll-related expenses

  $ 19,509     $ 27,985  

Product returns

    27,883       28,089  

Government rebates

    17,387       23,351  
Accrued shelf-stock     1,101       774  

Legal and professional fees

    5,647       3,162  

Income taxes payable

    4,352       21,186  

Physician detailing sales force fees

    361       1,512  

Other

    5,512       5,464  

Total accrued expenses

  $ 81,752     $ 111,523  

(in $000’s)

Returns Reserve

 

March 31,

2014

   

December 31,

2013

 

Beginning balance

  $ 28,089     $ 23,440  

Provision related to sales recorded in the period

    1,475       11,015  

Credits issued during the period

    (1,681 )     (6,366 )

Ending balance

  $ 27,883     $ 28,089  
Note 13 - Share-Based Compensation (Tables)
   

Three Months Ended

March 31,

 

(in $000’s)

 

2014

   

2013

 

Manufacturing expenses

  $ 896     $ 673  

Research and development

    1,402       1,376  

Selling, general and administrative

    2,088       2,310  

Total

  $ 4,386     $ 4,359  
     

Number of Shares
Under Option

     

Weighted Average
Exercise Price
per Share

 

Outstanding at December 31, 2013

    3,770,905     $ 14.01  

Options granted

    3,000     $ 25.18  

Options exercised

    (364,953 )   $ 15.99  
Options forfeited     (18,553 )   $ 20.93  

Outstanding at March 31, 2014

    3,390,399     $ 13.77  

Options exercisable at March 31, 2014

    2,476,479     $ 11.41  

Restricted Stock Awards

 

Number of Restricted

Stock Awards

   

Weighted Average

Grant Date

Fair Value

 

Non-vested at December 31, 2013

    2,123,835     $ 21.13  

Granted

    29,950     $ 25.18  

Vested

    (30,041 )   $ 20.68  

Forfeited

    (31,439 )   $ 21.47  

Non-vested at March 31, 2014

    2,092,305     $ 21.19  
Note 15 - Earnings Per Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
   

Three Months Ended
March 31,

 

(in $000’s except share and per share amounts)

 

2014

   

2013

 
                 

Numerator:

               

Net income

  $ 6,425     $ 105,442  
                 

Denominator:

               

Weighted average common shares outstanding

    67,702,296       66,487,470  
                 

Effect of dilutive stock options and restricted stock awards

    2,236,576       1,690,885  
                 

Diluted weighted average common shares outstanding

    69,938,872       68,178,355  
                 

Basic net income per share

  $ 0.09     $ 1.59  

Diluted net income per share

  $ 0.09     $ 1.55  
Note 16 - Segment Information (Tables)
Schedule of Segment Reporting Information, by Segment [Table Text Block]

(in $000’s)

Three Months Ended March 31, 2014

 

Global

Division

   

Impax

Division

   

Corporate

and Other

   

Total

Company

 

Revenues, net

  $ 109,141     $ 9,577     $ ---     $ 118,718  

Cost of revenues

    57,022       4,074       ---       61,096  

Research and development

    11,217       10,524       ---       21,741  

Patent litigation expense

    2,173       ---       ---       2,173  

Income (loss) before provision for income taxes

  $ 36,346     $ (14,242 )   $ (13,474 )   $ 8,630  

(in $000’s)

Three Months Ended March 31, 2013

 

Global

Division

   

Impax

Division

   

Corporate

and Other

   

Total

Company

 

Revenues, net

  $

101,636

    $ 46,853     $ ---     $ 148,489  

Cost of revenues

    61,444       29,174       ---       90,618  

Research and development

    11,711       7,894       ---       19,605  

Patent litigation expense

    4,278       ---       ---       4,278  

Income (loss) before provision for income taxes

  $ 19,160     $ (2,979 )   $ 137,539     $ 153,720  
Note 18 - Supplementary Financial Information (unaudited) (Tables)
Schedule of Quarterly Financial Information [Table Text Block]
(in $000’s except shares and per share amounts)  

Quarter Ended:

March 31, 2014

 

Revenue:

       

Global Product sales, gross

  $ 265,850  

Less:

       

Chargebacks

    95,714  

Rebates

    52,054  

Product Returns

    1,294  

Other credits

    10,671  

Global Product sales, net

    106,117  
         

Rx Partner

    2,435  

Other Revenues

    589  

Global Division revenues, net

    109,141  
         

Impax Product sales, gross

    20,643  

Less:

       

Chargebacks

    8,230  

Rebates

    1,070  

Product Returns

    181  

Other credits

    1,853  

Impax Product sales, net

    9,309  
         

Other Revenues

    268  

Impax Division revenues, net

    9,577  
         

Total revenues

    118,718  
         

Gross profit

    57,622  
         

Net income

  $ 6,425  
         

Net income per share (basic)

  $ 0.09  

Net income per share (diluted)

  $ 0.09  
         

Weighted average: common shares outstanding:

       

Basic

    67,702,296  

Diluted

    69,938,872  
 (in $000’s except shares and per share amounts)  

Quarter Ended:

March 31, 2013

 

Revenue:

       

Global Product sales, gross

  $ 197,956  

Less:

       

Chargebacks

    64,345  

Rebates

    30,572  

Product Returns

    94  

Other credits

    5,160  

Global Product sales, net

    97,785  
         

Rx Partner

    3,114  

Other Revenues

    737  

Global Division revenues, net

    101,636  
         

Impax Product sales, gross

    69,292  

Less:

       

Chargebacks

    7,790  

Rebates

    6,236  

Product Returns

    1,490  

Other credits

    7,255  

Impax Product sales, net

    46,521  
         

Other Revenues

    332  

Impax Division revenues, net

    46,853  
         

Total revenues

    148,489  
         

Gross profit

    57,871  
         

Net income

  $ 105,442  
         

Net income per share (basic)

  $ 1.59  

Net income per share (diluted)

  $ 1.55  
         

Weighted average: common shares outstanding:

       

Basic

    66,487,470  

Diluted

    68,178,355  
Supplemental Cash Flow Information (Details) (USD $)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Supplemental Cash Flow Elements [Abstract]
 
 
Accrued Vendor Invoices
$ 4,165,000 
$ 4,273,000 
Depreciation
$ 4,973,000 
$ 4,760,000 
Supplemental Cash Flow Information (Details) - Supplemental Disclosure of Non-cash Investing and Financing Activities (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Supplemental Disclosure of Non-cash Investing and Financing Activities [Abstract]
 
 
Cash paid for interest
$ 1 
$ 87 
Cash paid for income taxes
$ 21,024 
$ 222 
Note 1 - The Company & Basis of Presentation (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2014
Note 1 - The Company & Basis of Presentation (Details) [Line Items]
 
Number of Reportable Segments
Number Of Channels
Number of Internally Developed Late Stage Branded Pharmaceutical Product Candidate
Number Of Properties
Number Of Leased Properties
Equity Method Investment, Ownership Percentage
57.54% 
Senior Vice President [Member] |
Severance Charges and Accelerated Equity Expense [Member]
 
Note 1 - The Company & Basis of Presentation (Details) [Line Items]
 
Employee-related Liabilities (in Dollars)
$ 0.7 
Note 2 - Revenue Recognition (Details)
3 Months Ended
Mar. 31, 2014
Note 2 - Revenue Recognition (Details) [Line Items]
 
Cash Discount Discount Rate
2.00% 
Minimum [Member]
 
Note 2 - Revenue Recognition (Details) [Line Items]
 
Cash Discount Invoice Terms
30 days 
Maximum [Member]
 
Note 2 - Revenue Recognition (Details) [Line Items]
 
Cash Discount Invoice Terms
90 days 
Note 4 - Investments (Details) - A Summary of Short-Term Investments (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Dec. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
 
 
Amortized Cost
$ 261,055 
$ 228,521 
Gross Unrecognized Gains
33 
39 
Gross Unrecognized Losses
(36)
(21)
Fair Value
261,052 
228,539 
Commercial Paper [Member]
 
 
Schedule of Held-to-maturity Securities [Line Items]
 
 
Amortized Cost
104,516 
91,480 
Gross Unrecognized Gains
26 
26 
Fair Value
104,542 
91,506 
Corporate Bonds [Member]
 
 
Schedule of Held-to-maturity Securities [Line Items]
 
 
Amortized Cost
156,539 
137,041 
Gross Unrecognized Gains
13 
Gross Unrecognized Losses
(36)
(21)
Fair Value
$ 156,510 
$ 137,033 
Note 5 - Accounts Receivable (Details) (USD $)
Mar. 31, 2014
Dec. 31, 2013
Receivables [Abstract]
 
 
Allowance for Doubtful Accounts Receivable, Current
$ 539,000 
$ 539,000 
Note 5 - Accounts Receivable (Details) - The Composition of Accounts Receivable, Net (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Dec. 31, 2013
The Composition of Accounts Receivable, Net [Abstract]
 
 
Gross accounts receivable
$ 246,374 
$ 246,319 
Less: Rebate reserve
(85,658)
(88,449)
Less: Chargeback reserve
(32,766)
(37,066)
Less: Other deductions
(8,429)
(7,811)
Accounts receivable, net
$ 119,521 
$ 112,993 
Note 5 - Accounts Receivable (Details) - A Roll Forward of the Rebate and Chargeback Reserves Activity (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Dec. 31, 2013
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
Ending balance
$ 32,766 
$ 37,066 
Ending balance
85,658 
88,449 
Rebate Reserve [Member]
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
Beginning balance
88,449 
46,011 
Provision recorded during the period
53,124 
193,288 
Credits issued during the period
(55,915)
(150,850)
Ending balance
85,658 
88,449 
Chargeback Reserve [Member]
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
Provision recorded during the period
103,944 
389,707 
Credits issued during the period
(108,244)
(371,051)
Ending balance
32,766 
37,066 
Beginning balance
$ 37,066 
$ 18,410 
Note 6 - Inventory (Details) (USD $)
3 Months Ended
Mar. 31, 2014
Dec. 31, 2013
Mar. 31, 2013
Finished and Unfinished Inventory Related to Discontinued Products [Member]
Mar. 31, 2013
Impact of Expected Delay of FDA Approval [Member]
Mar. 31, 2013
Additional Pre-launch Inventory of Product Manufactured for Third-Party [Member]
Mar. 31, 2014
Unapproved Inventory [Member]
Dec. 31, 2013
Unapproved Inventory [Member]
Mar. 31, 2014
Raw Materials [Member]
Mar. 31, 2014
Finished Goods [Member]
Note 6 - Inventory (Details) [Line Items]
 
 
 
 
 
 
 
 
 
Inventory Valuation Reserves
$ 19,652,000 
$ 17,702,000 
$ 6,700,000 
$ 5,000,000 
$ 6,400,000 
 
 
 
 
Unapproved Product Inventory Net
 
 
 
 
 
$ 6,953,000 
$ 6,462,000 
 
 
Inventory Turnover Period Minimum
 
 
 
 
 
 
 
3 years 
 
Inventory Turnover Period Maximum
 
 
 
 
 
 
 
5 years 
2 years 
Note 6 - Inventory (Details) - Inventory, Net of Carrying Value Reserves (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Dec. 31, 2013
Inventory, Net of Carrying Value Reserves [Abstract]
 
 
Raw materials
$ 26,059 
$ 27,981 
Work in process
3,115 
1,434 
Finished goods
52,032 
47,416 
Total inventory
81,206 
76,831 
Less: Non-current inventory
5,047 
6,725 
Total inventory-current
$ 76,159 
$ 70,107 
Note 7 - Property, Plant and Equipment (Details) - Property, Plant and Equipment, Net (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Dec. 31, 2013
Property, Plant and Equipment, Net [Abstract]
 
 
Land
$ 5,773 
$ 5,773 
Buildings and improvements
141,179 
139,657 
Equipment
117,543 
114,950 
Office furniture and equipment
12,041 
11,523 
Construction-in-progress
16,900 
15,910 
Property, plant and equipment, gross
293,436 
287,813 
Less: Accumulated depreciation
(103,775)
(99,622)
Property, plant and equipment, net
$ 189,661 
$ 188,191 
Note 8 - Goodwill and Intangible Assets (Details) (USD $)
3 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Dec. 31, 2013
Jun. 30, 2012
Products Approved [Member]
Tolmar Incorporated [Member]
Mar. 31, 2014
Products Approved [Member]
Tolmar Incorporated [Member]
Jun. 30, 2012
Product Pending Approval [Member]
Tolmar Incorporated [Member]
Mar. 31, 2014
Product Pending Approval [Member]
Tolmar Incorporated [Member]
Sep. 30, 2013
Abbreviated New Drug Applications [Member]
Research and Development Expense [Member]
Mar. 31, 2014
Cost of Sales [Member]
Sep. 30, 2013
Cost of Sales [Member]
Mar. 31, 2014
Zomig Product Rights Tablet [Member]
Mar. 31, 2014
Zomig Product Rights Orally Disintegrating Tablet [Member]
Mar. 31, 2014
Zomig Product Rights Nasal Spray [Member]
Jun. 30, 2012
Tolmar Incorporated [Member]
Mar. 31, 2014
Tolmar Incorporated [Member]
Mar. 31, 2014
Minimum [Member]
Tolmar Product Rights [Member]
Mar. 31, 2014
Maximum [Member]
Tolmar Product Rights [Member]
Note 8 - Goodwill and Intangible Assets (Details) [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
$ 27,574,000 
 
$ 27,574,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finite-Lived Intangible Asset, Useful Life
 
 
 
 
 
 
 
 
 
 
14 months 
11 months 
72 months 
 
 
5 years 
12 years 
Number Of Products
 
 
 
10 
10 
 
 
 
 
 
 
11 
11 
 
 
Impairment of Intangible Assets (Excluding Goodwill)
2,876,000 
 
 
 
 
 
 
800,000 
2,900,000 
13,200,000 
 
 
 
 
 
 
 
Impairment of Intangible Assets (Excluding Goodwill), Percent of Carrying Value
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of Intangible Assets
$ 2,430,000 
$ 7,142,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 8 - Goodwill and Intangible Assets (Details) - Intangible Assets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Dec. 31, 2013
Amortized intangible assets:
 
 
Initial cost
$ 75,483 
$ 75,483 
Accumulated amortization
(34,337)
(31,907)
Impairment
(16,782)
(13,906)
Carrying value
24,364 
29,670 
Other Product Rights [Member]
 
 
Amortized intangible assets:
 
 
Initial cost
2,250 
2,250 
Impairment
(750)
(750)
Carrying value
1,500 
1,500 
Zomig Product Rights [Member]
 
 
Amortized intangible assets:
 
 
Initial cost
41,783 
41,783 
Accumulated amortization
(29,371)
(28,641)
Carrying value
12,412 
13,142 
Tolmar Product Rights [Member]
 
 
Amortized intangible assets:
 
 
Initial cost
31,450 
31,450 
Accumulated amortization
(4,966)
(3,266)
Impairment
(16,032)
(13,156)
Carrying value
$ 10,452 
$ 15,028 
Note 8 - Goodwill and Intangible Assets (Details) - Expected Amortization Expense (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Expected Amortization Expense [Abstract]
 
2014
$ 6,891 
2015
4,835 
2016
3,709 
2017
3,573 
2018
1,984 
Thereafter
1,872 
Totals
$ 22,864 
Note 9 - Accrued Expenses, Commitments and Contingencies (Details) (USD $)
3 Months Ended
Mar. 31, 2014
Dec. 31, 2013
Note 9 - Accrued Expenses, Commitments and Contingencies (Details) [Line Items]
 
 
Commitments and Contingencies
   
   
Purchase Order Commitments
63,684,000 
 
Purchase Commitment Period
1 year 
 
Taiwan Facility Construction [Member]
 
 
Note 9 - Accrued Expenses, Commitments and Contingencies (Details) [Line Items]
 
 
Commitments and Contingencies
$ 8,030,000 
 
Note 9 - Accrued Expenses, Commitments and Contingencies (Details) - The Company’s Accrued Expenses (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Dec. 31, 2013
The Company’s Accrued Expenses [Abstract]
 
 
Payroll-related expenses
$ 19,509 
$ 27,985 
Product returns
27,883 
28,089 
Government rebates
17,387 
23,351 
Accrued shelf-stock
1,101 
774 
Legal and professional fees
5,647 
3,162 
Income taxes payable
4,352 
21,186 
Physician detailing sales force fees
361 
1,512 
Other
5,512 
5,464 
Total accrued expenses
$ 81,752 
$ 111,523 
Note 9 - Accrued Expenses, Commitments and Contingencies (Details) - A Roll Forward of the Product Return Reserve (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2014
Dec. 31, 2013
Note 9 - Accrued Expenses, Commitments and Contingencies (Details) - A Roll Forward of the Product Return Reserve [Line Items]
 
 
Ending balance
$ 27,883 
$ 28,089 
Returns Reserve [Member]
 
 
Note 9 - Accrued Expenses, Commitments and Contingencies (Details) - A Roll Forward of the Product Return Reserve [Line Items]
 
 
Beginning balance
28,089 
23,440 
Provision related to sales recorded in the period
1,475 
11,015 
Credits issued during the period
(1,681)
(6,366)
Ending balance
$ 27,883 
$ 28,089 
Note 10 - Income Taxes (Details) (USD $)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Income Tax Disclosure [Abstract]
 
 
Income Tax Expense (Benefit)
$ 2,205,000 
$ 48,278,000 
Effective Income Tax Rate Reconciliation, Percent
26.00% 
31.00% 
Note 11 - Revolving Line of Credit (Details) (USD $)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Note 11 - Revolving Line of Credit (Details) [Line Items]
 
 
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars)
$ 50,000,000 
 
Equity Interest Pledged As Collateral
65.00% 
 
Minimum Unrestricted Cash as Defined in Credit Agreement (in Dollars)
100,000,000 
 
Total Net Leverage Ratio
3.75 
 
Senior Secured Leverage Ratio
2.50 
 
Minimum Consolidated EBITDA (in Dollars)
50,000,000 
 
Minimum Liquidity (in Dollars)
100,000,000 
 
Debt Instrument, Unused Borrowing Capacity, Fee (in Dollars)
31,000 
30,000 
Letter of Credit [Member]
 
 
Note 11 - Revolving Line of Credit (Details) [Line Items]
 
 
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars)
$ 10,000,000 
 
Minimum [Member] |
Alternate Base Rate [Member]
 
 
Note 11 - Revolving Line of Credit (Details) [Line Items]
 
 
Debt Instrument, Basis Spread on Variable Rate
0.50% 
 
Minimum [Member] |
London Interbank Offered Rate (LIBOR) [Member]
 
 
Note 11 - Revolving Line of Credit (Details) [Line Items]
 
 
Debt Instrument, Basis Spread on Variable Rate
1.50% 
 
Minimum [Member]
 
 
Note 11 - Revolving Line of Credit (Details) [Line Items]
 
 
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage
0.25% 
 
Maximum [Member] |
Alternate Base Rate [Member]
 
 
Note 11 - Revolving Line of Credit (Details) [Line Items]
 
 
Debt Instrument, Basis Spread on Variable Rate
1.50% 
 
Maximum [Member] |
London Interbank Offered Rate (LIBOR) [Member]
 
 
Note 11 - Revolving Line of Credit (Details) [Line Items]
 
 
Debt Instrument, Basis Spread on Variable Rate
2.50% 
 
Maximum [Member]
 
 
Note 11 - Revolving Line of Credit (Details) [Line Items]
 
 
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage
0.45% 
 
Note 12 - Alliance and Collaboration Agreements (Details) (USD $)
3 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 25 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Jun. 30, 2012
Products Approved [Member]
Tolmar Incorporated [Member]
Mar. 31, 2014
Products Approved [Member]
Tolmar Incorporated [Member]
Jun. 30, 2012
Product Pending Approval [Member]
Tolmar Incorporated [Member]
Mar. 31, 2014
Product Pending Approval [Member]
Tolmar Incorporated [Member]
Dec. 31, 2012
Products in Development [Member]
Tolmar Incorporated [Member]
Mar. 31, 2014
Generic Products [Member]
Valeant [Member]
Mar. 31, 2014
Branded Advanced Form of Solodyn Product [Member]
Valeant [Member]
Dec. 31, 2013
Milestone Payments [Member]
Tolmar Incorporated [Member]
Dec. 31, 2012
Milestone Payments [Member]
Tolmar Incorporated [Member]
Mar. 31, 2011
Milestone Payments [Member]
Valeant [Member]
Dec. 31, 2009
Milestone Payments [Member]
Valeant [Member]
Sep. 30, 2009
Milestone Payments [Member]
Valeant [Member]
Mar. 31, 2009
Milestone Payments [Member]
Valeant [Member]
Mar. 31, 2014
Milestone Payments [Member]
Valeant [Member]
Mar. 31, 2014
Milestone Payments [Member]
Glaxo Group Limited [Member]
Mar. 31, 2014
Milestone Payments [Member]
Endo Pharmaceuticals Incorporation [Member]
Dec. 31, 2008
Up-front Payment Arrangement [Member]
Valeant [Member]
Dec. 31, 2010
Up-front Payment Arrangement [Member]
Glaxo Group Limited [Member]
Jun. 30, 2010
Up-front Payment Arrangement [Member]
Endo Pharmaceuticals Incorporation [Member]
Mar. 31, 2011
Milestone Payment Arrangement [Member]
Valeant [Member]
Mar. 31, 2014
Clinical Milestone Events [Member]
Endo Pharmaceuticals Incorporation [Member]
Mar. 31, 2014
Regulatory Milestone Events [Member]
Endo Pharmaceuticals Incorporation [Member]
Mar. 31, 2014
Commercialization Events [Member]
Endo Pharmaceuticals Incorporation [Member]
Mar. 31, 2014
Cost of Sales [Member]
Sep. 30, 2013
Cost of Sales [Member]
Mar. 31, 2014
Cost of Sales [Member]
Tolmar Product Rights [Member]
Sep. 30, 2013
Cost of Sales [Member]
Tolmar Product Rights [Member]
Mar. 31, 2014
Acceptance Of Regulatory Filings For Substantive Review [Member]
Mar. 31, 2014
Specified Threshold [Member]
Mar. 31, 2014
Shire Laboratories Incorporated [Member]
Mar. 31, 2013
Shire Laboratories Incorporated [Member]
Jun. 30, 2012
Tolmar Incorporated [Member]
Mar. 31, 2014
Tolmar Incorporated [Member]
Mar. 31, 2013
Tolmar Incorporated [Member]
Dec. 31, 2012
Tolmar Incorporated [Member]
Mar. 31, 2014
Teva Pharmaceutical Industries Limited [Member]
Mar. 31, 2014
Pfizer Incorporated [Member]
Mar. 31, 2014
Valeant [Member]
Mar. 31, 2014
Astra Zeneca [Member]
Mar. 31, 2013
Astra Zeneca [Member]
Mar. 31, 2014
Endo Pharmaceuticals Incorporation [Member]
Mar. 31, 2014
DURECT Corporation [Member]
Mar. 31, 2014
Minimum [Member]
IND-enabling Animal Studies for New Development Candidate [Member]
Mar. 31, 2014
Minimum [Member]
Phase 1 Trials [Member]
Mar. 31, 2014
Minimum [Member]
Phase 2 Trials [Member]
Mar. 31, 2014
Minimum [Member]
Phase 3 Trials [Member]
Mar. 31, 2014
Minimum [Member]
Bioequivalence Studies [Member]
Mar. 31, 2014
Minimum [Member]
Preparation And Submission Of Regulatory Filings [Member]
Mar. 31, 2014
Minimum [Member]
Potential Marketing Approval One [Member]
Mar. 31, 2014
Minimum [Member]
Potential Marketing Approval Two [Member]
Mar. 31, 2014
Minimum [Member]
Tolmar Product Rights [Member]
Mar. 31, 2014
Maximum [Member]
IND-enabling Animal Studies for New Development Candidate [Member]
Mar. 31, 2014
Maximum [Member]
Phase 1 Trials [Member]
Mar. 31, 2014
Maximum [Member]
Phase 2 Trials [Member]
Mar. 31, 2014
Maximum [Member]
Phase 3 Trials [Member]
Mar. 31, 2014
Maximum [Member]
Bioequivalence Studies [Member]
Mar. 31, 2014
Maximum [Member]
Preparation And Submission Of Regulatory Filings [Member]
Mar. 31, 2014
Maximum [Member]
Potential Marketing Approval One [Member]
Mar. 31, 2014
Maximum [Member]
Potential Marketing Approval Two [Member]
Mar. 31, 2014
Maximum [Member]
Tolmar Product Rights [Member]
Note 12 - Alliance and Collaboration Agreements (Details) [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Completion Period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12 months 
1 year 
1 year 
2 years 
3 months 
6 months 
1 year 
1 year 
 
18 months 
2 years 
3 years 
4 years 
1 year 
12 months 
3 years 
3 years 
 
Product Sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Litigation Settlement, Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
48,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Other Accrued Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,447,000 
5,640,000 
 
2,961,000 
490,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number Of Products
 
 
10 
10 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11 
11 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collaborative Arrangement Up Front Payment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21,000,000 
 
 
 
 
 
 
2,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collaborative Arrangement Required Payment Net
 
 
 
 
 
 
 
 
 
12,000,000 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collaborative Arrangement Maximum Contingent Payments Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,000,000 
169,000,000 
30,000,000 
 
 
 
 
15,000,000 
5,000,000 
10,000,000 
 
 
 
 
 
 
 
 
 
24,000,000 
 
 
 
 
 
 
 
 
61,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finite-Lived Intangible Asset, Useful Life
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 years 
 
 
 
 
 
 
 
 
12 years 
Research and Development Expense
21,741,000 
19,605,000 
 
 
 
 
1,550,000 
 
 
 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment of Intangible Assets (Excluding Goodwill)
2,876,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,900,000 
13,200,000 
2,900,000 
13,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum Loan Amount Pursuant to Loan and Security Agreement
15,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans Receivable, Net
15,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service Agreement Term
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
15 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collaborative Arrangement Maximum Profit Share Payments Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Revenue, Revenue Recognized
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
327,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collaborative Arrangement Contingent Payments Received And Potentially To Be Received
 
 
 
 
 
 
 
 
 
 
 
3,000,000 
2,000,000 
5,000,000 
5,000,000 
 
 
 
40,000,000 
 
 
15,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Revenue, Additions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11,500,000 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued Royalties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,615,000 
16,282,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collaborative Arrangement Copromotion Service Fee Percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Revenue Estimated Period Of Recognition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
103 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,071,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain (Loss) Related to Litigation Settlement
 
$ 102,049,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 13 - Share-Based Compensation (Details) (USD $)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Note 13 - Share-Based Compensation (Details) [Line Items]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate
0.00% 
 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized (in Dollars)
$ 35,280,000 
 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition
1 year 357 days 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number (in Shares)
3,001,000 
 
undefined (in Shares)
1,852,000 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value (in Dollars)
3,789,000 
2,933,000 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value (in Dollars)
$ 621,000 
$ 613,000 
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)
3,533,694 
 
Stock Options and Restricted Stock Awards [Member]
 
 
Note 13 - Share-Based Compensation (Details) [Line Items]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period
10 years 
 
Stock Options and Restricted Stock Awards [Member] |
Minimum [Member]
 
 
Note 13 - Share-Based Compensation (Details) [Line Items]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period
3 years 
 
Stock Options and Restricted Stock Awards [Member] |
Maximum [Member]
 
 
Note 13 - Share-Based Compensation (Details) [Line Items]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period
4 years 
 
Restricted Stock Awards [Member] |
Minimum [Member]
 
 
Note 13 - Share-Based Compensation (Details) [Line Items]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period
3 years 
 
Restricted Stock Awards [Member] |
Maximum [Member]
 
 
Note 13 - Share-Based Compensation (Details) [Line Items]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period
4 years 
 
Note 13 - Share-Based Compensation (Details) - Share-Based Compensation Expense Recognized by the Company (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Share-Based Compensation
$ 4,386 
$ 4,359 
Manufacturing Expenses [Member]
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Share-Based Compensation
896 
673 
Research and Development Expense [Member]
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Share-Based Compensation
1,402 
1,376 
Selling, General and Administrative Expenses [Member]
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
Share-Based Compensation
$ 2,088 
$ 2,310 
Note 13 - Share-Based Compensation (Details) - Summary of Stock Option Activity (USD $)
3 Months Ended
Mar. 31, 2014
Summary of Stock Option Activity [Abstract]
 
Options Outstanding
3,770,905 
Options Outstanding
$ 14.01 
Options exercisable at March 31, 2014
2,476,479 
Options exercisable at March 31, 2014
$ 11.41 
Options granted
3,000 
Options granted
$ 25.18 
Options exercised
(364,953)
Options exercised
$ 15.99 
Options forfeited
(18,553)
Options forfeited
$ 20.93 
Options Outstanding
3,390,399 
Options Outstanding
$ 13.77 
Note 13 - Share-Based Compensation (Details) - A Summary of Non-Vested Restricted Stock Awards (USD $)
3 Months Ended
Mar. 31, 2014
A Summary of Non-Vested Restricted Stock Awards [Abstract]
 
Non-vested
2,123,835 
Non-vested
$ 21.13 
Granted
29,950 
Granted
$ 25.18 
Vested
(30,041)
Vested
$ 20.68 
Forfeited
(31,439)
Forfeited
$ 21.47 
Non-vested
2,092,305 
Non-vested
$ 21.19 
Note 14 - Stockholders' Equity (Details) (USD $)
Mar. 31, 2014
Dec. 31, 2013
Stockholders' Equity Note [Abstract]
 
 
Preferred Stock, Shares Authorized
2,000,000 
2,000,000 
Preferred Stock, Par or Stated Value Per Share
$ 0.01 
$ 0.01 
Common Stock, Shares Authorized
90,000,000 
90,000,000 
Common Stock, Par or Stated Value Per Share
$ 0.01 
$ 0.01 
Note 15 - Earnings Per Share (Details)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Earnings Per Share [Abstract]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
331,500 
1,276,394 
Note 15 - Earnings Per Share (Details) - Reconciliation of Basic and Diluted Earnings per Share (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Reconciliation of Basic and Diluted Earnings per Share [Abstract]
 
 
Net income (in Dollars)
$ 6,425 
$ 105,442 
Weighted average common shares outstanding
67,702,296 
66,487,470 
Effect of dilutive stock options and restricted stock awards
2,236,576 
1,690,885 
Diluted weighted average common shares outstanding
69,938,872 
68,178,355 
Basic net income per share (in Dollars per share)
$ 0.09 
$ 1.59 
Diluted net income per share (in Dollars per share)
$ 0.09 
$ 1.55 
Note 16 - Segment Information (Details) (USD $)
3 Months Ended
Mar. 31, 2014
Dec. 31, 2013
Note 16 - Segment Information (Details) [Line Items]
 
 
Number of Reportable Segments
 
Number of Internally Developed Late Stage Branded Pharmaceutical Product Candidate
 
Assets (in Dollars)
$ 982,205,000 
$ 996,923,000 
Taiwan Facility Construction [Member]
 
 
Note 16 - Segment Information (Details) [Line Items]
 
 
Assets (in Dollars)
$ 139,784,000 
 
Note 16 - Segment Information (Details) - Segment Information Reconciled to Total Company Consolidated Financial Results (USD $)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Segment Reporting Information [Line Items]
 
 
Revenues, net
$ 118,718,000 
$ 148,489,000 
Cost of revenues
61,096,000 
90,618,000 
Research and development
21,741,000 
19,605,000 
Patent litigation expense
2,173,000 
4,278,000 
Income (loss) before provision for income taxes
8,630,000 
153,720,000 
Global Division [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues, net
109,141,000 
101,636,000 
Cost of revenues
57,022,000 
61,444,000 
Research and development
11,217,000 
11,711,000 
Patent litigation expense
2,173,000 
4,278,000 
Income (loss) before provision for income taxes
36,346,000 
19,160,000 
Impax Division [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues, net
9,577,000 
46,853,000 
Cost of revenues
4,074,000 
29,174,000 
Research and development
10,524,000 
7,894,000 
Income (loss) before provision for income taxes
(14,242,000)
(2,979,000)
Corporate and Other [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Income (loss) before provision for income taxes
$ (13,474,000)
$ 137,539,000 
Note 18 - Supplementary Financial Information (unaudited) (Details) - Selected Financial Information for the Quarterly Periods Noted (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Global Division [Member]
Chargeback Reserve [Member]
Mar. 31, 2013
Global Division [Member]
Chargeback Reserve [Member]
Mar. 31, 2014
Global Division [Member]
Rebate Reserve [Member]
Mar. 31, 2013
Global Division [Member]
Rebate Reserve [Member]
Mar. 31, 2014
Global Division [Member]
Other Credits [Member]
Mar. 31, 2013
Global Division [Member]
Other Credits [Member]
Mar. 31, 2014
Global Division [Member]
Mar. 31, 2013
Global Division [Member]
Mar. 31, 2014
Global Division [Member]
Rx Partner [Member]
Mar. 31, 2013
Global Division [Member]
Rx Partner [Member]
Mar. 31, 2014
Global Division [Member]
Other Revenues [Member]
Mar. 31, 2013
Global Division [Member]
Other Revenues [Member]
Mar. 31, 2014
Impax Division [Member]
Chargeback Reserve [Member]
Mar. 31, 2013
Impax Division [Member]
Chargeback Reserve [Member]
Mar. 31, 2014
Impax Division [Member]
Rebate Reserve [Member]
Mar. 31, 2013
Impax Division [Member]
Rebate Reserve [Member]
Mar. 31, 2014
Impax Division [Member]
Other Credits [Member]
Mar. 31, 2013
Impax Division [Member]
Other Credits [Member]
Mar. 31, 2014
Impax Division [Member]
Mar. 31, 2013
Impax Division [Member]
Mar. 31, 2014
Chargeback Reserve [Member]
Dec. 31, 2013
Chargeback Reserve [Member]
Mar. 31, 2014
Rebate Reserve [Member]
Dec. 31, 2013
Rebate Reserve [Member]
Note 18 - Supplementary Financial Information (unaudited) (Details) - Selected Financial Information for the Quarterly Periods Noted [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales revenue goods gross
 
 
 
 
 
 
 
 
$ 265,850 
$ 197,956 
 
 
 
 
 
 
 
 
 
 
$ 20,643 
$ 69,292 
 
 
 
 
Sales allowances goods
 
 
95,714 
64,345 
52,054 
30,572 
10,671 
5,160 
 
 
 
 
 
 
8,230 
7,790 
1,070 
6,236 
1,853 
7,255 
 
 
103,944 
389,707 
53,124 
193,288 
Sales revenue goods net
 
 
 
 
 
 
 
 
106,117 
97,785 
 
 
 
 
 
 
 
 
 
 
9,309 
46,521 
 
 
 
 
Sales revenue net
 
 
 
 
 
 
 
 
 
 
2,435 
3,114 
589 
737 
 
 
 
 
 
 
268 
332 
 
 
 
 
Revenues
118,718 
148,489 
 
 
 
 
 
 
109,141 
101,636 
 
 
 
 
 
 
 
 
 
 
9,577 
46,853 
 
 
 
 
Gross profit
57,622 
57,871 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
6,425 
105,442 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per share (basic) (in Dollars per share)
$ 0.09 
$ 1.59 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per share (diluted) (in Dollars per share)
$ 0.09 
$ 1.55 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average: common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic (in Shares)
67,702,296 
66,487,470 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted (in Shares)
69,938,872 
68,178,355 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product Returns
 
 
 
 
 
 
 
 
$ 1,294 
$ 94 
 
 
 
 
 
 
 
 
 
 
$ 181 
$ 1,490