ACORDA THERAPEUTICS INC, 10-Q filed on 8/4/2016
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2016
Jul. 29, 2016
Document and Entity Information
 
 
Entity Registrant Name
ACORDA THERAPEUTICS INC 
 
Entity Central Index Key
0001008848 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2016 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--12-31 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
46,139,900 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q2 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 137,400 
$ 153,204 
Restricted cash
 
6,032 
Short-term investments
 
200,101 
Trade accounts receivable, net of allowances of $985 and $884, as of June 30, 2016 and December 31, 2015, respectively
45,886 
31,466 
Prepaid expenses
18,709 
16,079 
Finished goods inventory
55,553 
36,476 
Other current assets
5,616 
7,959 
Total current assets
263,164 
451,317 
Property and equipment, net of accumulated depreciation
36,754 
40,204 
Goodwill
284,504 
183,636 
Deferred tax asset
2,128 
2,128 
Intangible assets, net of accumulated amortization
751,524 
430,856 
Non-current portion of deferred cost of license revenue
2,589 
2,906 
Other assets
5,876 
247 
Total assets
1,346,539 
1,111,294 
Current liabilities:
 
 
Accounts payable
29,554 
14,233 
Accrued expenses and other current liabilities
96,388 
66,158 
Current portion of deferred license revenue
9,057 
9,057 
Current portion of convertible notes payable
1,126 
1,144 
Total current liabilities
136,125 
90,592 
Convertible senior notes (due 2021)
294,854 
290,420 
Acquired contingent consideration
71,700 
63,500 
Non-current portion of deferred license revenue
36,984 
41,513 
Non-current portion of convertible notes payable
 
1,107 
Deferred tax liability
89,960 
12,146 
Other non-current liabilities
35,374 
8,991 
Commitments and contingencies
   
   
Stockholders' equity:
 
 
Common stock, $0.001 par value. Authorized 80,000,000 shares at June 30, 2016 and December 31, 2015; issued 46,103,367 and 43,440,324 shares, including those held in treasury, as of June 30, 2016 and December 31, 2015, respectively
46 
43 
Treasury stock at cost (12,420 shares at June 30, 2016 and December 31, 2015)
(329)
(329)
Additional paid-in capital
904,784 
812,782 
Accumulated deficit
(228,152)
(209,352)
Accumulated other comprehensive loss
(4,711)
(119)
Total stockholders' equity - Acorda Therapeutics, Inc
671,638 
603,025 
Noncontrolling interest
9,904 
 
Total stockholders' equity
681,542 
603,025 
Total liabilities and stockholders' equity
$ 1,346,539 
$ 1,111,294 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Consolidated Balance Sheets
 
 
Trade accounts receivable, allowances (in dollars)
$ 985 
$ 884 
Common stock, par value (in dollars per share)
$ 0.001 
$ 0.001 
Common stock, Authorized shares
80,000,000 
80,000,000 
Common stock, issued shares
46,103,367 
43,440,324 
Treasury stock, shares
12,420 
12,420 
Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Revenues:
 
 
 
 
Net product revenues
$ 120,695 
$ 107,565 
$ 230,842 
$ 201,064 
Royalty revenues
4,499 
3,878 
7,990 
7,966 
License revenue
2,264 
2,264 
4,529 
4,529 
Total net revenues
127,458 
113,707 
243,361 
213,559 
Costs and expenses:
 
 
 
 
Cost of sales
26,435 
22,708 
49,621 
41,155 
Cost of license revenue
159 
159 
317 
317 
Research and development
50,293 
31,229 
94,863 
61,865 
Selling, general and administrative
62,604 
52,819 
121,584 
101,589 
Changes in fair value of acquired contingent consideration
2,000 
1,100 
8,200 
4,200 
Total operating expenses
141,491 
108,015 
274,585 
209,126 
Operating (loss) income
(14,033)
5,692 
(31,224)
4,433 
Other (expense) income (net):
 
 
 
 
Interest and amortization of debt discount expense
(4,033)
(4,010)
(7,757)
(8,061)
Interest income
48 
94 
263 
160 
Realized loss on foreign currency transactions
(1,486)
 
(1,495)
 
Other (expense) income
(425)
351 
10,026 
471 
Total other (expense) income (net)
(5,896)
(3,565)
1,037 
(7,430)
(Loss) income before taxes
(19,929)
2,127 
(30,187)
(2,997)
Benefit from (Provision for) income taxes
972 
(1,130)
10,709 
909 
Net (loss) income
(18,957)
997 
(19,478)
(2,088)
Net loss attributable to non-controlling interest
678 
 
678 
 
Net (loss) income attributable to Acorda Therapeutics, Inc.
$ (18,279)
$ 997 
$ (18,800)
$ (2,088)
Net (loss) income per share attributable to Acorda Therapeutics, Inc.-basic
$ (0.40)
$ 0.02 
$ (0.42)
$ (0.05)
Net (loss) income per share attributable to Acorda Therapeutics, Inc.-diluted
$ (0.40)
$ 0.02 
$ (0.42)
$ (0.05)
Weighted average common shares outstanding used in computing net (loss) income per share attributable to Acorda Therapeutics, Inc.-basic
45,338 
42,085 
45,077 
42,058 
Weighted average common shares outstanding used in computing net (loss) income per share attributable to Acorda Therapeutics, Inc.-diluted
45,338 
43,282 
45,077 
42,058 
Consolidated Statements of Comprehensive (Loss) Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Consolidated Statements of Comprehensive (Loss) Income
 
 
 
 
Net (loss) income
$ (18,957)
$ 997 
$ (19,478)
$ (2,088)
Other comprehensive (loss) income, net of tax:
 
 
 
 
Foreign currency translation adjustment
(4,711)
 
(4,711)
 
Unrealized gains on available for sale securities
 
31 
 
14 
Reclassification of net losses to net income
 
 
119 
 
Other comprehensive (loss) income, net of tax
(4,711)
31 
(4,592)
14 
Comprehensive (loss) income
(23,668)
1,028 
(24,070)
(2,074)
Other comprehensive loss attributable to noncontrolling interest
$ (128)
 
$ (128)
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Cash flows from operating activities:
 
 
Net loss
$ (19,478)
$ (2,088)
Adjustments to reconcile net (loss) to net cash used in operating activities:
 
 
Share-based compensation expense
17,432 
15,834 
Amortization of net premiums and discounts on investments
467 
1,434 
Amortization of debt discount and debt issuance costs
4,564 
4,230 
Amortization of revenue interest issuance cost
 
Depreciation and amortization expense
9,916 
7,491 
Change in acquired contingent consideration obligation
8,200 
4,200 
Realized gain on foreign currency transaction
(10,484)
 
Deferred tax benefit
(11,116)
(909)
Changes in assets and liabilities:
 
 
(Increase) decrease in accounts receivable
(14,328)
2,413 
Decrease (increase) in prepaid expenses and other current assets
1,996 
(3,845)
Increase in inventory
(19,077)
(22,366)
Decrease in non-current portion of deferred cost of license revenue
317 
317 
Decrease in other assets
17 
17 
Increase (decrease) in accounts payable, accrued expenses, other current liabilities
27,217 
(2,496)
Decrease in revenue interest liability interest payable
 
(190)
Decrease in non-current portion of deferred license revenue
(4,528)
(4,528)
Decrease in deferred product revenue-Zanaflex
 
(1,017)
Decrease (increase) in restricted cash
6,032 
(4,504)
Net cash used in operating activities
(2,853)
(6,000)
Cash flows from investing activities:
 
 
Purchases of property and equipment
(2,504)
(4,057)
Purchases of intangible assets
(388)
(572)
Acquisitions, net of cash received
(275,100)
 
Purchases of investments
(40,221)
(275,987)
Proceeds from maturities of investments
246,966 
174,500 
Net cash used in investing activities
(71,247)
(106,116)
Cash flows from financing activities:
 
 
Proceeds from issuance of common stock and option exercises
74,051 
6,268 
Purchase of noncontrolling interest
(14,489)
 
Debt issuance costs
(1,479)
 
Repayments of revenue interest liability
(41)
(125)
Net cash provided by financing activities
58,042 
6,143 
Effect of exchange rate changes on cash and cash equivalents
254 
 
Net decrease in cash and cash equivalents
(15,804)
(105,973)
Cash and cash equivalents at beginning of period
153,204 
182,170 
Cash and cash equivalents at end of period
137,400 
76,197 
Supplemental disclosure:
 
 
Cash paid for interest
3,040 
3,986 
Cash paid for taxes
$ 2,578 
$ 1,323 
Organization and Business Activities
Organization and Business Activities

 

(1) Organization and Business Activities

 

Acorda Therapeutics, Inc. (“Acorda” or the “Company”) is a biotechnology company focused on developing therapies that restore function and improve the lives of people with neurological disorders.

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information, Accounting Standards Codification (ASC) Topic 270-10 and with the instructions to Form 10-Q.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.  In management’s opinion, all adjustments considered necessary for a fair presentation have been included in the interim periods presented and all adjustments are of a normal recurring nature.  The Company has evaluated subsequent events through the date of this filing.  Operating results for the three and six-month periods ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.  When used in these notes, the terms “Acorda” or “the Company” mean Acorda Therapeutics, Inc.  The December 31, 2015 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.  You should read these unaudited interim condensed consolidated financial statements 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, 2015.

 

Certain reclassifications were made to prior period amounts in the interim consolidated financial statements and accompanying notes to conform with the current presentation.

 

Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

 

(2) Summary of Significant Accounting Policies

 

Our critical accounting policies are detailed in our Annual Report on Form 10-K for the year ended December 31, 2015.  As of June 30, 2016, with the exception of the addition of our policy on translation of foreign currency, the modification of our policy on segment and geographic information to reflect sales of Selincro and the adoption of ASU 2015-03, “Interest — Imputation of Interest” (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03), in the three-month period ended March 31, 2016, our critical accounting policies have not changed materially from December 31, 2015.

 

Foreign Currency Translation — The functional currency of operations outside the United States of America is deemed to be the currency of the local country, unless otherwise determined that the United States dollar would serve as a more appropriate functional currency given the economic operations of the entity. Accordingly, the assets and liabilities of the Company’s foreign subsidiary, Biotie, are translated into United States dollars using the period-end exchange rate; and income and expense items are translated using the average exchange rate during the period from the acquisition date through the period end date; and equity transactions are translated at historical rates. Cumulative translation adjustments are reflected as a separate component of equity. Foreign currency transaction gains and losses are charged to operations.

 

Translation of amounts from Euro into US Dollar has been made at the following exchange rates:

 

 

 

As of and for the Period Ended

 

Exchange rates

 

June 30, 2016

 

 

 

 

 

Period end EUR: USD exchange rate

 

1.11

 

 

 

 

 

Average period EUR: USD exchange rate

 

1.13

 

 

Segment and Geographic Information

 

The Company is managed and operated as one business which is focused on the identification, development and commercialization of novel therapies to improve the lives of people with neurological disorders. The entire business is managed by a single management team that reports to the Chief Executive Officer. The Company does not operate separate lines of business with respect to any of its products or product candidates and the Company does not prepare discrete financial information with respect to separate products or product candidates or by location. Accordingly, the Company views its business as one reportable operating segment. Net product revenues reported to date are derived from the sales of Ampyra, Zanaflex and Qutenza in the U.S.  Net product revenues reported to date are also derived from sales of Selincro in Europe from the acquisition date of April 18, 2016.

 

Subsequent Events

 

Subsequent events are defined as those events or transactions that occur after the balance sheet date, but before the financial statements are filed with the Securities and Exchange Commission. The Company completed an evaluation of the impact of any subsequent events through the date these financial statements were issued, and determined the following subsequent events required disclosure in these financial statements.

 

On August 2, 2016, the Company entered into a settlement agreement with Alkem Laboratories Ltd. and Ascend Laboratories, LLC (collectively “Alkem”) to resolve pending patent litigation brought by the Company against Alkem involving Ampyra® (dalfampridine) Extended-Release Tablets.  The pending patent litigation was filed by the Company in the U.S. District Court for the District of Delaware in response to Alkem’s submission of an Abbreviated New Drug Application (“ANDA”) to the U.S. Food and Drug Administration (“FDA”), seeking marketing approval for a generic version of Ampyra.  As a result of the settlement agreement, Alkem will be permitted to market a generic version of Ampyra in the United States at a specified date in 2027, or potentially earlier under certain circumstances.

 

Recently Issued / Adopted Accounting Pronouncements

 

In April 2015, the FASB issued Accounting Standards Update 2015-03, “Interest – Imputation of Interest” (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset.  ASU-2015-03 is effective for fiscal years and interim periods therein beginning after December 15, 2015, with early adoption permitted.  The Company adopted this guidance retrospectively effective in the three-month period ended March 31, 2016.  The impact of the adoption of this guidance on the Company’s consolidated balance sheet as of December 31, 2015 was a reclassification of approximately $5.0 million representing the unamortized balance of debt issuance costs as of December 31, 2015 from Other Assets to the Convertible Senior Notes liability.

 

(In thousands)

 

Balance at December 31, 2015

 

 

 

Revised
Reporting

 

As Previously
Reported

 

Other assets

 

$
247

 

$
5,296

 

Convertible notes payable – due 2021

 

$
(290,420)

 

$
(295,469)

 

 

In March 2016, the FASB issued Accounting Standards Update 2016-09, “Compensation – Stock Compensation” (Topic 718).  The main objective of this update is to simplify the accounting, and reporting classifications for certain aspects of share-based payment transactions.  This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years.  The Company is currently evaluating the new guidance to determine the impact it may have on its financial statements.

 

Acquisitions
Acquisitions

 

(3) Acquisitions

 

Biotie Therapies Corp.

 

On April 18, 2016, the Company acquired a controlling interest in Biotie Therapies Corp. (“Biotie”) pursuant to a combination agreement entered into in January 2016.  The acquisition of Biotie positions the Company as a leader in Parkinson’s disease therapeutic development, with three clinical-stage compounds that have the potential to improve the lives of people with Parkinson’s disease.  In accordance with the combination agreement the Company closed a public tender offer for all of Biotie’s capital stock, pursuant to which the Company acquired approximately 93% of the fully diluted capital stock of Biotie for a cash purchase price of approximately $350 million.  On May 4, 2016, the Company acquired an additional approximately 4% of Biotie’s fully diluted capital stock pursuant to a subsequent public offer to Biotie stockholders that did not tender their shares in the initial tender offer.  The purchase consideration for the subsequent tender offer was approximately $14.5 million.  Accordingly, the Company currently owns approximately 97% of the fully diluted capital stock of Biotie (the “Acquisition”).

 

The Company estimated the preliminary fair value of the assets acquired and liabilities assumed as of the date of acquisition based on the information currently available.  The valuation of the assets and liabilities is subject to further analysis.  As the Company finalizes the fair values of the assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period and such adjustments could be material.  The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized.

 

The following table presents the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date of April 18, 2016:

 

(In thousands)

 

 

 

Cash and cash equivalents

 

  $

73,854

 

Other current assets

 

2,208

 

Other long-term assets

 

4,962

 

Intangible assets (indefinite-lived)

 

260,500

 

Intangible assets (definite-lived)

 

65,000

 

Current liabilities

 

(17,547)

 

Deferred taxes

 

(89,038)

 

Other long-term liabilities

 

(26,715)

 

 

 

 

 

Fair value of assets and liabilities acquired

 

273,224

 

Goodwill

 

102,676

 

 

 

 

 

Total purchase price

 

375,900

 

Less: Noncontrolling interests

 

(25,736)

 

 

 

 

 

Purchase consideration on date of acquisition

 

  $

350,164

 

 

 

 

 

 

 

The Company accounted for the Acquisition as a business combination using the acquisition method of accounting.  Under the acquisition method of accounting, the total purchase price of the acquisition is allocated to the net tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of the date of acquisition.  The Company incurred approximately $17.3 million of acquisition related expenses to date.  For the three and six-month periods ended June 30, 2016, the Company incurred approximately $7.2 million and $9.5 million, respectively, in acquisition related expenses, all of which were expensed and included in selling, general and administrative expenses in the consolidated statements of operations.  The results of Biotie’s operations have been included in the consolidated statements of operations from the acquisition date of April 18, 2016.

 

The definite-lived intangible asset will be amortized on a straight line basis over the period in which the Company expects to receive economic benefit and will be reviewed for impairment when facts and circumstances indicate that the carrying value of the asset may not be recoverable.

 

The fair value of the IPR&D will be capitalized as of the acquisition date and subsequently accounted for as indefinite-lived intangible assets until disposition of the assets or completion or abandonment of the associated research and development efforts.  Accordingly, during the development period after the completion of the acquisition, these assets will not be amortized into earnings; rather, these assets will be subject to periodic impairment testing.  Upon successful completion of the development efforts, the useful lives of the IPR&D assets will be determined and the assets will be considered definite-lived intangible assets and amortized over their expected useful lives.

 

Goodwill is calculated as the excess of the purchase price and the noncontrolling interest over the estimated fair value of the assets acquired and liabilities assumed.  The goodwill recorded is primarily related to establishing a deferred tax liability for the IPR&D intangible assets which have no tax basis and, therefore, will not result in a future tax deduction.  None of the goodwill is deductible for tax purposes.

 

The revenue of Biotie included in the consolidated statements of operations as of June 30, 2016 was $0.8 million.  The net loss of Biotie included in the consolidated statements of operations as of June 30, 2016 was $14.8 million.

 

Noncontrolling Interests

 

The fair value of the noncontrolling interest is comprised of the fair value of Biotie’s equity interests not acquired by the Company.  The fair value of the noncontrolling interest was determined by quoted market price, which is considered to be a Level 1 input under the fair value measurements and disclosure guidance.  The noncontrolling interest in Biotie is presented as permanent equity in the Company’s consolidated balance sheet.  Noncontrolling interests are generally adjusted for the net income or loss and other comprehensive income or loss attributable to the noncontrolling shareholders and any additional acquisition of noncontrolling interests.

 

Activity attributable to stockholders’ equity - Acorda and noncontrolling interests for the six-month period ended June 30, 2016 is as follows:

 

(In thousands)

 

Stockholders’
Equity
Acorda

 

Non-
Controlling
Interest

 

Total
Stockholders’
Equity

 

Balance at December 31, 2015

 

$
603,025

 

$—

 

$
603,025

 

Net loss

 

(18,800)

 

(678)

 

(19,478)

 

Other comprehensive loss

 

(4,592)

 

(128)

 

(4,720)

 

Noncontrolling interest at date of acquisition

 

 

25,736

 

25,736

 

Purchase of noncontrolling interest

 

537

 

(15,026)

 

(14,489)

 

Private Placement, net of issuance costs

 

72,094

 

 

72,094

 

Stock compensation expense and option exercises

 

19,374

 

 

19,374

 

 

 

 

 

 

 

 

 

Balance at June 30, 2016

 

$
671,638

 

$
9,904

 

$
681,542

 

 

 

 

 

 

 

 

 

 

Financial Instruments

 

The Company does not enter into hedging transactions in the normal course of business.  However, as a result of the Biotie acquisition which was completed in Euros, the Company was exposed to fluctuations in exchange rates between the U.S. dollar and the Euro until the completion of the transaction.  To mitigate this risk, the Company entered into foreign currency options to limit its exposure to fluctuations in exchange rates between the U.S. dollar and the Euro until the transaction was completed.  The Company recorded the fair value of the options on its balance sheet.  As of May 2, 2016, there were no remaining foreign currency options outstanding.  The Company currently owns approximately 97% of the fully diluted capital stock of Biotie, therefore, the risk of exposure to fluctuations in exchange rates between the U.S. dollar and the Euro is no longer material to the Company.

 

As of June 30, 2016, the Company had a realized gain on the foreign currency options of approximately $9.9 million, which is included in other income in the consolidated statements of operations.

 

Pro-Forma Financial Information Associated with the Biotie Acquisition (Unaudited)

 

The following table summarizes certain supplemental pro forma financial information for the three and six-month periods ended June 30, 2016 and 2015 as if the Acquisition had occurred as of January 1, 2015. The unaudited pro forma financial information for the three and six months ended June 30, 2016 reflects  (i) the net impact to amortization expense based on the fair value adjustments to the intangibles assets; (ii) the impact to operations resulting from the reversal of transaction costs related to the Acquisition; (iii) the impact to operations resulting from the reversal of the unrealized and realized gains on the foreign currency option; (iv) the impact to interest expense based on the fair value adjustments to the debt acquired from Biotie; (v) the tax effects of those adjustments; and (vi) the net loss attributable to the noncontrolling interests resulting from the Acquisition.

 

The unaudited pro forma financial information for the three and six-month periods ended June 30, 2015 reflects (i) the net impact to amortization expense based on the fair value adjustments to the intangible assets acquired from Biotie; (ii) the impact to interest expense based on the fair value adjustments to the debt acquired from Biotie; and (iii) the net loss attributable to the noncontrolling interests resulting from the Acquisition, and the related tax effects of those adjustments.

 

 

 

Three-month

 

Six-month

 

 

 

period ended

 

period ended

 

 

 

June 30,

 

June 30,

 

(In thousands) 

 

2016

 

2015

 

2016

 

2015

 

Revenues

 

$
127,675

 

$
115,178

 

$
244,419

 

$
216,016

 

Loss from continuing operations attributable to Acorda

 

$
(25,085)

 

$
(11,058)

 

$
(43,177)

 

$
(22,996)

 

 

Intangible Assets and Goodwill
Intangible Assets and Goodwill

 

(4) Intangible Assets and Goodwill

 

Intangible Assets

 

In connection with the acquisition of Biotie (Note 3), the Company acquired global rights to tozadenant, SYN-120, and BTT-1023.  Tozadenant is an oral adenosine A2a receptor antagonist currently in Phase 3 development as an adjunctive treatment to levodopa in Parkinson’s disease patients to reduce OFF time.  SYN-120 is an oral, dual antagonist with the potential to facilitate pro-cognitive and antipsychotic activities for patients with neurodegenerative diseases, such as Parkinson’s and Alzheimer’s.  BTT-1023 is a fully human monoclonal antibody which targets vascular adhesion for the potential treatment of inflammatory/fibrotic disease, such as rheumatoid arthritis and psoriasis.  The Company also acquired rights to Selincro, an orally administered drug used for the treatment of alcohol dependence.  Selincro received European Medicines Agency approval in 2013 and is currently marketed across Europe by Biotie’s partner H. Lundbeck A/S, a Danish pharmaceutical company.

 

In accordance with the acquisition method of accounting, the Company allocated the acquisition cost for the transaction to the underlying assets acquired and liabilities assumed, based upon the estimated fair values of those assets and liabilities at the date of acquisition.  The Company classified the fair value of the acquired IPR&D as indefinite lived intangible assets until the successful completion or abandonment of the associated research and development efforts.  The Company classified the fair value of Selincro as a definite lived intangible asset.  The fair value assigned to Selincro will be amortized over the estimated remaining useful life of 7 years.  The value allocated to the indefinite lived intangible assets was $260.5 million.  The value allocated to Selincro was $65 million.

 

Information regarding intangible assets is as follows:

 

 

 

 

 

June 30, 2016

 

December 31, 2015

 

(Dollars In thousands)

 

Estimated
Remaining
Useful
Lives
(Years)

 

Cost

 

Accumulated
Amortization

 

Foreign
Currency
Translation

 

Net
Carrying
Amount

 

Cost

 

Accumulated
Amortization

 

Net
Carrying
Amount

 

In-process research & development (1)

 

Indefinite-
lived

 

$
683,500

 

$-

 

$
(586)

 

$
682,914

 

$
423,000

 

$-

 

$
423,000

 

Selincro

 

7

 

65,000

 

(1,935)

 

(1,115)

 

61,950

 

-

 

-

 

-

 

Ampyra milestones

 

11

 

5,750

 

(2,529)

 

-

 

3,221

 

5,750

 

(2,380)

 

3,370

 

Ampyra CSRO royalty buyout

 

4

 

3,000

 

(1,962)

 

-

 

1,038

 

3,000

 

(1,817)

 

1,183

 

Website development costs

 

3

 

12,705

 

(10,657)

 

-

 

2,048

 

12,504

 

(9,467)

 

3,037

 

Website development costs – in process

 

n/a

 

353

 

-

 

-

 

353

 

266

 

-

 

266

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$
770,308

 

$
(17,083)

 

$
(1,701)

 

$
751,524

 

$
444,520

 

$
(13,664)

 

$
430,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes the fair values of:  CVT-301: $423.0 million; tozadenant: $232.0 million; SYN-120: $24.2 million and BTT-1023: $4.3 million

 

The Company recorded $2.6 million and $3.4 million in amortization expense related to these intangibles assets during the three and six-month periods ended June 30, 2016, respectively.  The Company recorded $0.8 million and $1.6 million in amortization expense related to these intangibles assets during the three and six months ended June 30, 2015.

 

Estimated future amortization expense for intangible assets subsequent to June 30, 2016 is as follows:

 

(In thousands)

 

 

 

2016

 

$
5,640

 

2017

 

10,868

 

2018

 

10,172

 

2019

 

9,924

 

2020

 

9,602

 

Thereafter

 

23,166

 

 

 

 

 

 

 

$
69,372

 

 

 

 

 

 

Goodwill

 

Changes in the carrying amount of goodwill were as follows:

 

In thousands

 

 

 

Balance at December 31, 2015

 

$
183,636

 

Goodwill associated with the acquisition of Biotie Therapies

 

102,676

 

Foreign currency translation adjustment

 

(1,808)

 

 

 

 

 

Balance at June 30, 2016

 

$
284,504

 

 

 

 

 

 

Share-based Compensation
Share-based Compensation

 

(5) Share-based Compensation

 

During the three-month periods ended June 30, 2016 and 2015, the Company recognized share-based compensation expense of $9.3 million and $8.7 million, respectively.  During the six-month periods ended June 30, 2016 and 2015, the Company recognized share-based compensation expense of $17.4 million and $15.8 million.  Activity in options and restricted stock during the six-month period ended June 30, 2016 and related balances outstanding as of that date are reflected below.  The weighted average fair value per share of options granted to employees for the three-month periods ended June 30, 2016 and 2015 were approximately $11.92 and $13.83, respectively.  The weighted average fair value per share of options granted to employees for the six-month periods ended June 30, 2016 and 2015 were approximately $13.91 and $15.97, respectively.

 

The following table summarizes share-based compensation expense included within the consolidated statements of operations:

 

 

 

For the three-month

 

For the six-month

 

 

 

period ended June 30,

 

period ended June 30,

 

(In millions)

 

2016

 

2015

 

2016

 

2015

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

  $

2.6

 

  $

2.2

 

  $

4.7

 

  $

4.0

 

Selling, general and administrative

 

6.7

 

6.5

 

12.7

 

11.8

 

 

 

 

 

 

 

 

 

 

 

Total

 

  $

9.3

 

  $

8.7

 

  $

17.4

 

  $

15.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A summary of share-based compensation activity for the six-month period ended June 30, 2016 is presented below:

 

Stock Option Activity

 

 

 

Number of Shares
(In thousands)

 

Weighted Average
Exercise Price

 

Weighted Average
Remaining
Contractual
Term

 

Intrinsic Value
(In thousands)

 

Balance at January 1, 2016

 

8,223

 

$
30.97

 

 

 

 

 

Granted

 

1,555

 

32.55

 

 

 

 

 

Cancelled

 

(256)

 

35.37

 

 

 

 

 

Exercised

 

(111)

 

17.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2016

 

9,411

 

$
31.27

 

6.7

 

$
6,766

 

 

 

 

 

 

 

 

 

 

 

Vested and expected to vest at June 30, 2016

 

9,295

 

$
31.24

 

6.7

 

$
6,765

 

 

 

 

 

 

 

 

 

 

 

Vested and exercisable at June 30, 2016

 

5,724

 

$
29.40

 

5.3

 

$
6,755

 

 

 

 

 

 

 

 

 

 

 

 

Restricted Stock Activity

 

(In thousands)
Restricted Stock

 

Number of Shares

 

Nonvested at January 1, 2016

 

441

 

Granted

 

609

 

Vested

 

(18)

 

Forfeited

 

(179)

 

 

 

 

 

Nonvested at June 30, 2016

 

853

 

 

 

 

 

 

Unrecognized compensation cost for unvested stock options, restricted stock awards and performance stock units as of June 30, 2016 totaled $72.6 million and is expected to be recognized over a weighted average period of approximately 2.5 years.

 

Earnings Per Share
Earnings Per Share

 

(6) Earnings Per Share

 

The following table sets forth the computation of basic and diluted earnings per share for the three and six-month periods ended June 30, 2016 and 2015:

 

(In thousands, except per share data)

 

Three-month
period ended
June 30, 2016

 

Three-month
period ended
June 30, 2015

 

Six-month
period ended
June 30, 2016

 

Six-month
period ended
June 30, 2015

 

Basic and diluted

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$
(18,279)

 

$
997

 

$
(18,800)

 

$
(2,088)

 

Weighted average common shares outstanding used in computing net (loss) income per share—basic

 

45,338

 

42,085

 

45,077

 

42,058

 

Plus: net effect of dilutive stock options and restricted common shares

 

 

1,197

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding used in computing net (loss) income per share—diluted

 

45,338

 

43,282

 

45,077

 

42,058

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share—basic

 

$
(0.40)

 

$
0.02

 

$
(0.42)

 

$
(0.05)

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share—diluted

 

$
(0.40)

 

$
0.02

 

$
(0.42)

 

$
(0.05)

 

 

 

 

 

 

 

 

 

 

 

 

The difference between basic and diluted shares is that diluted shares include the dilutive effect of the assumed exercise of outstanding securities.  The Company’s stock options and unvested shares of restricted common stock could have the most significant impact on diluted shares.

 

Securities that could potentially be dilutive are excluded from the computation of diluted earnings per share when a loss from continuing operations exists or when the exercise price exceeds the average closing price of the Company’s common stock during the period, because their inclusion would result in an anti-dilutive effect on per share amounts.

 

The following amounts were not included in the calculation of net income per diluted share because their effects were anti-dilutive:

 

(In thousands)

 

Three-month
period ended
June 30, 2016

 

Three-month
period ended
June 30, 2015

 

Six-month
period ended
June 30, 2016

 

Six-month
period ended
June 30, 2015

 

Denominator

 

 

 

 

 

 

 

 

 

Stock options and restricted common shares

 

7,502

 

5,406

 

7,536

 

3,974

 

Convertible note – Saints Capital

 

10

 

19

 

10

 

19

 

 

Additionally, the impact of the convertible debt and the impact of the convertible capital loan assumed from Biotie were determined to be anti-dilutive and excluded from the calculation of net loss per diluted share for the three and six-month periods ended June 30, 2016 and 2015.

 

Income Taxes
Income Taxes

 

(7) Income Taxes

 

The Company’s effective income tax rate differs from the U.S. statutory rate principally due to state taxes, foreign taxes related to the Company’s Puerto Rico operations, Federal research and development tax credits, jurisdictions with pretax losses from the acquisition of Biotie for which no tax benefit can be recognized and certain other permanent tax items.  The annual rate depends on a number of factors, including the jurisdiction in which operating profit is earned and the timing and nature of discrete items.

 

For the three-month periods ended June 30, 2016 and 2015, the Company recorded a $1.0 million benefit and $1.1 million provision from income taxes, respectively.  The effective income tax rates for the Company for the three-month periods ended June 30, 2016 and 2015 were 4.9% and 53.0%, respectively.  The variance in the effective tax rates for the three-month period ended June 30, 2016 as compared to the three-month period ended June 30, 2015 was due primarily to valuation allowance recorded on jurisdictions with pretax losses from the acquisition of Biotie during  three-month period ended June 30, 2016 for which no tax benefit can be recognized partially offset by the Company being able to receive a benefit in 2016 for the Federal research and development tax credits as a result of passed legislation making the tax credit permanent.  The Company was not able to benefit from the Federal research and development tax credits for the three-month period ended June 30, 2015, however, the Company was able to receive the benefit for this tax credit in the effective tax rate at December 31, 2015.

 

For the six-month periods ended June 30, 2016 and 2015, the Company recorded a $10.7 million benefit and $0.9 million benefit for income taxes, respectively.  The effective income tax rates for the Company for the six-month periods ended June 30, 2016 and 2015 were 35.5% and 30.0%, respectively.  The variance in the effective tax rates for the six-month period ended June 30, 2016 as compared to the six-month period ended June 30, 2015 was due primarily to the valuation allowance recorded on jurisdictions with pretax losses from the acquisition of Biotie during the six-month period ended June 30, 2016 for which no tax benefit can be recognized, partially offset by the Company being able to receive a benefit in 2016 for the Federal research and development tax credits as a result of passed legislation making the tax credit permanent.  The Company was not able to benefit from the Federal research and development tax credits for the three-month period ending June 30, 2015, however, the Company was able to receive the benefit for this tax credit in the effective tax rate at December 31, 2015.

 

The Company continues to evaluate the realizability of its deferred tax assets and liabilities on a quarterly basis and will adjust such amounts in light of changing facts and circumstances including, but not limited to, future projections of taxable income, tax legislation, rulings by relevant tax authorities, the progress of ongoing tax audits and the regulatory approval of products currently under development.  Any changes to the valuation allowance or deferred tax assets and liabilities in the future would impact the Company’s income taxes.

 

Fair Value Measurements
Fair Value Measurements

 

(8) Fair Value Measurements

 

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.  In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities.  Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates, exchange rates and yield curves.  Fair values determined by Level 3 inputs utilize unobservable data points for the asset or liability.  The Company’s Level 1 assets consist of time deposits, money market funds and investments in a Treasury money market fund and the Company’s Level 2 assets consist of  high-quality government bonds that are valued using observable market prices.  The Company’s Level 3 liabilities represent acquired contingent consideration related to the acquisition of Civitas and are valued using a probability weighted discounted cash flow valuation approach.  No changes in valuation techniques occurred during the three or six-month periods ended June 30, 2016.  The estimated fair values of all of our financial instruments approximate their carrying values at June 30, 2016, except for the fair value of the Company’s convertible senior notes, which was approximately $283.4 million as of June 30, 2016.  The Company estimates the fair value of its notes utilizing market quotations for the debt (Level 2).

 

(In thousands)

 

Level 1

 

Level 2

 

Level 3

 

June 30, 2016

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

Cash equivalents

 

$
28,976

 

$—

 

$—

 

 

 

 

 

 

 

 

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

 

71,700

 

 

 

 

 

 

 

 

 

December 31, 2015

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

Cash equivalents

 

$
70,504

 

$
13,009

 

$—

 

Short-term investments

 

 

200,101

 

 

 

 

 

 

 

 

 

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

 

63,500

 

 

The following table presents additional information about liabilities measured at fair value on a recurring basis and for which the Company utilizes Level 3 inputs to determine fair value.

 

Acquired contingent consideration

 

(In thousands)

 

Three-month
period ended
June 30, 2016

 

Three-month
period ended
June 30, 2015

 

Six-month
period ended
June 30, 2016

 

Six-month
period ended
June 30, 2015

 

Acquired contingent consideration:

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$
69,700

 

$
55,700

 

$
63,500

 

$
52,600

 

Fair value change to contingent consideration (unrealized) included in the statement of operations

 

2,000

 

1,100

 

8,200

 

4,200

 

 

 

 

 

 

 

 

 

 

 

Balance, end of period

 

$
71,700

 

$
56,800

 

$
71,700

 

$
56,800

 

 

 

 

 

 

 

 

 

 

 

 

The Company estimates the fair value of its acquired contingent consideration using a probability weighted discounted cash flow valuation approach based on estimated future sales expected from CVT-301, a phase 3 candidate for the treatment of OFF periods of Parkinson’s disease and CVT-427, a Phase I candidate.  CVT-427 is an inhaled triptan intended for acute treatment of migraine using the ARCUS delivery system.  Using this approach, expected future cash flows are calculated over the expected life of the agreement, are discounted, and then exercise scenario probabilities are applied.  Some of the more significant assumptions made in the valuation include (i) the estimated CVT-301 and CVT 427 revenue forecasts, (ii) probabilities of success, and (iii) discount periods and rate.  The probability of achievement of revenue milestones ranged from 43.9% to 70% with milestone payment outcomes ranging from $0 to $54 million in the aggregate for CVT-301 and CVT-427.  The valuation is performed quarterly.  Gains and losses are included in the statement of operations.  For the three and six-month periods ended June 30, 2016, changes in the fair value of the acquired contingent consideration were due to the re-calculation of cash flows for the passage of time and updates to certain other estimated assumptions.

 

The acquired contingent consideration is classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market.  If different assumptions were used for the various inputs to the valuation approach, including but not limited to, assumptions involving probability adjusted sales estimates for CVT-301 and CVT-427 and estimated discount rates, the estimated fair value could be significantly higher or lower than the fair value determined.

 

Investments
Investments

 

(9) Investments

 

The Company held no short-term available-for-sale debt securities at June 30, 2016 as compared to $200.1 million at December 31, 2015 as these investments were either sold or matured during the three-month period ended March 31, 2016 to facilitate the Biotie acquisition.  The contractual maturities of available-for-sale debt securities held at December 31, 2015 were greater than 3 months but less than 1 year.

 

(In thousands)

 

Amortized
Cost

 

Gross
unrealized
gains

 

Gross
unrealized
losses

 

Estimated
fair
value

 

June 30, 2016

 

 

 

 

 

 

 

 

 

U.S. Treasury bonds

 

$—

 

$—

 

$(—)

 

$—

 

December 31, 2015

 

 

 

 

 

 

 

 

 

U.S. Treasury bonds

 

200,244

 

 

(143)

 

200,101

 

 

Short-term investments with maturities of three months or less from date of purchase have been classified as cash equivalents, and amounted to $29.0 million and $83.5 million as of June 30, 2016 and December 31, 2015, respectively.

 

Unrealized holding gains and losses are reported within accumulated other comprehensive (loss) (AOCI) in the statements of comprehensive income.  The changes in AOCI associated with the unrealized holding (losses) on available-for-sale investments during the six-month period ended June 30, 2016, were as follows (in thousands):

 

(In thousands)

 

Net Unrealized
Gains (Losses) on
Marketable
Securities

 

Balance at December 31, 2015

 

$
(119)

 

Other comprehensive loss before reclassifications:

 

 

Amounts reclassified from accumulated other comprehensive loss

 

119

 

 

 

 

 

Net current period other comprehensive income

 

119

 

 

 

 

 

Balance at June 30, 2016

 

$—

 

 

 

 

 

 

Debt Obligations
Debt Obligations

 

(10) Debt Obligations

 

Asset Based Loan

 

On June 1, 2016, the Company and certain of its subsidiaries entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as the sole initial lender and the administrative agent for the lenders (the “Administrative Agent”).

 

The Credit Agreement provides the Company with a three-year senior secured revolving credit facility in the maximum amount of $60 million.  Availability under the facility is subject to a borrowing base, which is based on eligible accounts receivable, inventory and equipment of the Company and certain of its U.S. subsidiaries, after adjusting for customary factors that are subject to modification from time to time by the Administrative Agent at its discretion (not to be exercised unreasonably).  Based on the Company’s eligible accounts receivable and inventory and other components of the borrowing base, the availability under the facility was approximately $60 million as of June 30, 2016.

 

Amounts drawn under the facility will bear interest, at the Company’s option, at (i) an alternate base rate (the highest of (a) the prime rate, (b) the federal funds effective rate or the overnight bank funding rate plus 0.5%, and (c) the LIBOR rate (adjusted for statutory reserve requirements for eurocurrency liabilities) plus 1%) plus 1.5%, or (ii) the LIBOR rate (adjusted for statutory reserve requirements for eurocurrency liabilities) plus 2.5%.  The facility is subject to an annual commitment fee of either 0.375% or 0.50%, depending on the amounts already drawn under the facility. As of June 30, 2016, there were no amounts drawn under the facility.

 

The Company’s obligations under the facility are guaranteed by its U.S. subsidiaries (other than its U.S. subsidiary of Biotie Therapies Oyj).  The Company’s obligations under the facility and its subsidiaries’ obligations under the related guarantees are secured by first priority security interests in collateral that includes, subject to certain exceptions:

 

·

U.S. accounts receivable, inventory and manufacturing equipment;

·

Equity interests in the Company’s U.S. subsidiaries (other than its U.S. subsidiary of Biotie Therapies Oyj) and up to 65% of the voting equity interests of its directly owned foreign subsidiaries; and

·

Substantially all other tangible and intangible assets, including equipment, contract rights and intellectual property (other than intellectual property related to Ampyra).

 

 

The facility contains certain covenants that, among other things, limit the Company’s ability and the ability of certain of its subsidiaries to (i) incur additional debt or issue redeemable preferred stock, (ii) pay dividends, repurchase shares or make certain other restricted payments or investments, (iii) incur liens, (iv) sell assets, (v) incur restrictions on future liens and incur restrictions on the ability of our subsidiaries to pay dividends or to make other payments to us, (vi) enter into affiliate transactions, (vii) engage in sale and leaseback transactions, and (viii) consolidate or merge.  These covenants are subject to significant exceptions and qualifications.  In addition, the Company will not be permitted to allow its ratio of (a) EBITDA minus Unfinanced Capital Expenditures to (b) Fixed Charges to be less than 1.10 to 1.00 on a trailing four quarter basis as of the end of any fiscal quarter during any period.

 

The facility has customary representations and warranties including, as a condition to borrowing, that all such representations and warranties are true and correct, in all material respects, on the date of the borrowing, including representations as to no material adverse effect on the Company’s business or financial condition since December 31, 2015.  The facility also has customary defaults, including a cross-default to material indebtedness of the Company and its subsidiaries.  The Administrative Agent may declare any outstanding obligations under the facility immediately due and payable upon the occurrence, and during the continuance, of an event of default.  In addition, any outstanding obligations under the facility will be immediately due and payable in the event that the Company or certain of its subsidiaries become the subject of voluntary or involuntary proceedings under any bankruptcy, insolvency or similar law.

 

Biotie Debt Obligations

 

As a result of the acquisition of Biotie, the Company consolidated the outstanding debt obligations of Biotie.  As of June 30, 2016, the following debt obligations remained outstanding:

 

Non-convertible Capital Loans

 

Non-convertible capital loans (“Tekes Loans”) granted by Tekes, a Finnish Funding Agency for Technology and Innovation, with an acquisition-date fair value of $24.4 million (€21.6 million) and a carrying value of $24.2 million as of June 30, 2016.  The Tekes Loans are comprised of fourteen non-convertible loans granted by Tekes.  The maturity dates for the Tekes Loans range from eight to ten years.  These loans bear interest based on the greater of 3% or the base rate set by the Finland’s Ministry of Finance minus one (1) percentage point.  According to certain terms and conditions of the Tekes Loans, Biotie may repay the principal amounts of these loans and the accrued and unpaid interest only if the restricted equity of Biotie, including its consolidated subsidiaries is positive (fully covered).

 

Convertible Capital Loan

 

Convertible capital loan issued to certain shareholders and venture capital organizations with an acquisition-date fair value of $6 million (€5.3 million) and a carrying value of $5.9 million as of June 30, 2016.  The loan bears cash interest at a rate of 10% per annum, payable annually each year.  The convertible capital loan is subject to certain terms and restrictive conditions as it relates to interest payments and repayment of the loan.  The loan will yield interest from the fiscal years in which the financial statements do not present sufficient funds available for profit distribution; however, interest on the loan may be paid if Biotie, including its subsidiaries, has sufficient funds for profit distribution as of the most recently ended fiscal year.  The loan may be repaid only if the restricted equity of Biotie, including its consolidated subsidiaries, for the last financial period is sufficient to repay the loan.  Pursuant to the terms of the loan agreement, the loan is convertible at any time at the option of the holders into 828,000 common shares of Biotie.  The conversion rates for the loan are €1.8688 per share for 540,000 of the shares and €2.3359 for the remaining 288,000 of the shares.

 

Research and Development Loans

 

Research and Development Loans (“R&D Loans”) granted by Tekes with an acquisition-date fair value of $2.9 million (€2.6 million) and a carrying value of $2.9 million as of June 30, 2016.  The R&D Loans bear interest based on the greater of 1% or the base rate set by Finland’s Ministry of Finance minus three (3) percentage points.  The repayment of these loans shall be initiated after five years, thereafter the loan principal shall be paid in equal installments over a 5 year period.

 

Commitments and Contingencies
Commitments and Contingencies

 

(11) Commitments and Contingencies

 

The Company’s long-term contractual obligations include commitments and estimated purchase obligations entered into in the normal course of business. Under certain supply agreements and other agreements with manufacturers and suppliers, the Company is required to make payments for the manufacture and supply of its clinical and approved products.  The Company’s major outstanding contractual obligations are for payments related to its convertible notes, capital loans, facility leases and commitments to purchase inventory.  In connection with the acquisition of Biotie, the Company’s long-term contractual obligations include certain operating leases of Biotie.  The following table summarizes the contractual obligations at June 30, 2016 and the effect such obligations are expected to have on the Company’s liquidity and cash flow in future periods:

 

 

 

Payments due by period (1)(9)

 

(In thousands)

 

Total

 

Less
than
1 year

 

1-3 years

 

4-5 years

 

Convertible Senior Notes (2)

 

$
374,575

 

$
6,038

 

$
12,075

 

$
356,462

 

Convertible note payable (3)

 

1,144

 

1,144

 

 

 

Capital loans (4) (6)

 

19,987

 

 

 

 

Research and development loans (5) (6)

 

2,987

 

597

 

1,195

 

1,195

 

Operating leases (7)

 

30,434

 

6,192

 

12,330

 

11,912

 

Inventory purchase commitments (8)

 

30,484

 

30,484

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
459,611

 

$
44,455

 

$
25,600

 

$
369,569

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Excludes a liability for uncertain tax positions totaling $6.5 million.  This liability has been excluded because the Company cannot currently make a reliable estimate of the period in which the liability will be payable, if ever.

 

(2)

Represents the future payments of principal and interest to be made on the Convertible Senior Notes issued in June 2014 and due in 2021.

 

(3)

Represents the remaining annual payment of principal and interest to be made on the convertible note payable to Saints Capital.

 

(4)

Represents payments for the convertible and non-convertible capital loans.  The convertible capital loan and the non-convertible capital loans have a stated maturity of less than one year.  However, the repayment of these loans and payment of accrued interest thereon are governed by a restrictive condition, according to which the loan principal must only be repaid if Biotie’s consolidated restricted equity is fully covered.  Accrued interest must only be paid if Biotie, including its subsidiaries, has sufficient funds for profit distribution as of the most recently ended fiscal year.  Interest accrues in the interim.

 

(5)

Represents the future principal payments on the R&D loans acquired from Biotie.

 

(6)

The amounts do not include interest costs at the loans’ applicable interest rates.

 

(7)

Represents payments for the operating leases of the Company’s Ardsley, NY headquarters, the Company’s manufacturing facility in Chelsea, MA, Biotie’s headquarters at Turku, Finland, and Biotie’s clinical operations in South San Francisco, CA.

 

(8)

Represents Ampyra, Zanaflex, and Qutenza inventory commitments.  The Ampyra inventory commitment is an estimate as the price paid for Ampyra inventory is based on a percentage of the net product sales during the quarter Alkermes ships inventory to us.  Under our supply agreement with Alkermes, we provide Alkermes with monthly written 18-month forecasts, and with annual written five-year forecasts for our supply requirements of Ampyra and two-year forecasts for our supply requirements of Zanaflex Capsules.  In each of the five months for Zanaflex and three months for Ampyra following the submission of our written 18-month forecast we are obligated to purchase the quantity specified in the forecast, even if our actual requirements are greater or less.  We have agreed to purchase at least 75% of our annual requirements of Ampyra from Alkermes, unless Alkermes is unable or unwilling to meet its requirements, for a percentage of net product sales and the quantity of product shipped by Alkermes to us.

 

(9)

Pursuant to the UCB Termination and Transition Agreement, Biotie is required to pay up to $4.3 million (€ 3.9 million) to UCB.  The amount that will be paid will be determined based on a percentage of future consideration Biotie will receive from tozadenant.  The liability is excluded as the Company cannot currently estimate the period in which the liability will be payable, if ever.

 

The Company is currently party to various legal proceedings which are principally patent litigation matters.  The Company has assessed such legal proceedings and does not believe that it is probable that a liability has been incurred or that the amount of any potential liability or range of losses can be reasonably estimated.  As a result, the Company did not record any loss contingencies for any of these matters.  While it is not possible to determine the outcome of these matters the Company believes that the resolution of all such matters will not have a material adverse effect on its consolidated financial position or liquidity, but could possibly be material to the Company’s consolidated results of operations in any one accounting period.  Litigation expenses are expensed as incurred.

 

Operating Leases

 

Biotie Leases

 

In connection with the acquisition of Biotie, the Company assumed two existing leases in Turku, Finland and South San Francisco.  The lease for Biotie’s headquarters in Turku, Finland, was entered into on June 27, 2013.  This lease will expire in November 2016, after which Biotie may extend the lease for an additional six months.  The lease provides for monthly rent payments during the lease term.  On August 20, 2013, Biotie entered into a 60-month lease for its clinical space located in South San Francisco.  This lease provides for monthly rent payments during the lease term.  This lease will expire in December 2018.

 

Future minimum commitments under all non-cancelable operating leases subsequent to June 30, 2016 are as follows:

 

(In thousands)

 

 

 

2016

 

$
3,130 

 

2017

 

6,180 

 

2018

 

6,337 

 

2019

 

5,811 

 

2020

 

5,956 

 

Later years

 

18,176 

 

 

 

 

 

 

 

$
45,590 

 

 

 

 

 

 

Rent expense under these operating leases during the three and six-month periods ended June 30, 2016, was approximately $1.5 million, and $2.9 million, respectively.

 

Summary of Significant Accounting Policies (Policies)

 

Foreign Currency Translation — The functional currency of operations outside the United States of America is deemed to be the currency of the local country, unless otherwise determined that the United States dollar would serve as a more appropriate functional currency given the economic operations of the entity. Accordingly, the assets and liabilities of the Company’s foreign subsidiary, Biotie, are translated into United States dollars using the period-end exchange rate; and income and expense items are translated using the average exchange rate during the period from the acquisition date through the period end date; and equity transactions are translated at historical rates. Cumulative translation adjustments are reflected as a separate component of equity. Foreign currency transaction gains and losses are charged to operations.

 

Translation of amounts from Euro into US Dollar has been made at the following exchange rates:

 

 

 

As of and for the Period Ended

 

Exchange rates

 

June 30, 2016

 

 

 

 

 

Period end EUR: USD exchange rate

 

1.11

 

 

 

 

 

Average period EUR: USD exchange rate

 

1.13

 

 

Segment and Geographic Information

 

The Company is managed and operated as one business which is focused on the identification, development and commercialization of novel therapies to improve the lives of people with neurological disorders. The entire business is managed by a single management team that reports to the Chief Executive Officer. The Company does not operate separate lines of business with respect to any of its products or product candidates and the Company does not prepare discrete financial information with respect to separate products or product candidates or by location. Accordingly, the Company views its business as one reportable operating segment. Net product revenues reported to date are derived from the sales of Ampyra, Zanaflex and Qutenza in the U.S.  Net product revenues reported to date are also derived from sales of Selincro in Europe from the acquisition date of April 18, 2016.

 

 

Subsequent Events

 

Subsequent events are defined as those events or transactions that occur after the balance sheet date, but before the financial statements are filed with the Securities and Exchange Commission. The Company completed an evaluation of the impact of any subsequent events through the date these financial statements were issued, and determined the following subsequent events required disclosure in these financial statements.

 

On August 2, 2016, the Company entered into a settlement agreement with Alkem Laboratories Ltd. and Ascend Laboratories, LLC (collectively “Alkem”) to resolve pending patent litigation brought by the Company against Alkem involving Ampyra® (dalfampridine) Extended-Release Tablets.  The pending patent litigation was filed by the Company in the U.S. District Court for the District of Delaware in response to Alkem’s submission of an Abbreviated New Drug Application (“ANDA”) to the U.S. Food and Drug Administration (“FDA”), seeking marketing approval for a generic version of Ampyra.  As a result of the settlement agreement, Alkem will be permitted to market a generic version of Ampyra in the United States at a specified date in 2027, or potentially earlier under certain circumstances.

 

 

Recently Issued / Adopted Accounting Pronouncements

 

In April 2015, the FASB issued Accounting Standards Update 2015-03, “Interest – Imputation of Interest” (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset.  ASU-2015-03 is effective for fiscal years and interim periods therein beginning after December 15, 2015, with early adoption permitted.  The Company adopted this guidance retrospectively effective in the three-month period ended March 31, 2016.  The impact of the adoption of this guidance on the Company’s consolidated balance sheet as of December 31, 2015 was a reclassification of approximately $5.0 million representing the unamortized balance of debt issuance costs as of December 31, 2015 from Other Assets to the Convertible Senior Notes liability.

 

(In thousands)

 

Balance at December 31, 2015

 

 

 

Revised
Reporting

 

As Previously
Reported

 

Other assets

 

$
247

 

$
5,296

 

Convertible notes payable – due 2021

 

$
(290,420)

 

$
(295,469)

 

 

In March 2016, the FASB issued Accounting Standards Update 2016-09, “Compensation – Stock Compensation” (Topic 718).  The main objective of this update is to simplify the accounting, and reporting classifications for certain aspects of share-based payment transactions.  This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years.  The Company is currently evaluating the new guidance to determine the impact it may have on its financial statements.

 

Summary of Significant Accounting Policies (Tables)

 

 

As of and for the Period Ended

 

Exchange rates

 

June 30, 2016

 

 

 

 

 

Period end EUR: USD exchange rate

 

1.11

 

 

 

 

 

Average period EUR: USD exchange rate

 

1.13

 

 

(In thousands)

 

Balance at December 31, 2015

 

 

 

Revised
Reporting

 

As Previously
Reported

 

Other assets

 

$
247

 

$
5,296

 

Convertible notes payable – due 2021

 

$
(290,420)

 

$
(295,469)

 

 

Acquisitions (Tables)

 

The following table presents the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date of April 18, 2016:

 

(In thousands)

 

 

 

Cash and cash equivalents

 

  $

73,854

 

Other current assets

 

2,208

 

Other long-term assets

 

4,962

 

Intangible assets (indefinite-lived)

 

260,500

 

Intangible assets (definite-lived)

 

65,000

 

Current liabilities

 

(17,547)

 

Deferred taxes

 

(89,038)

 

Other long-term liabilities

 

(26,715)

 

 

 

 

 

Fair value of assets and liabilities acquired

 

273,224

 

Goodwill

 

102,676

 

 

 

 

 

Total purchase price

 

375,900

 

Less: Noncontrolling interests

 

(25,736)

 

 

 

 

 

Purchase consideration on date of acquisition

 

  $

350,164

 

 

 

 

 

 

 

 

(In thousands)

 

Stockholders’
Equity
Acorda

 

Non-
Controlling
Interest

 

Total
Stockholders’
Equity

 

Balance at December 31, 2015

 

$
603,025

 

$—

 

$
603,025

 

Net loss

 

(18,800)

 

(678)

 

(19,478)

 

Other comprehensive loss

 

(4,592)

 

(128)

 

(4,720)

 

Noncontrolling interest at date of acquisition

 

 

25,736

 

25,736

 

Purchase of noncontrolling interest

 

537

 

(15,026)

 

(14,489)

 

Private Placement, net of issuance costs

 

72,094

 

 

72,094

 

Stock compensation expense and option exercises

 

19,374

 

 

19,374

 

 

 

 

 

 

 

 

 

Balance at June 30, 2016

 

$
671,638

 

$
9,904

 

$
681,542

 

 

 

 

 

 

 

 

 

 

 

 

 

Three-month

 

Six-month

 

 

 

period ended

 

period ended

 

 

 

June 30,

 

June 30,

 

(In thousands) 

 

2016

 

2015

 

2016

 

2015

 

Revenues

 

$
127,675

 

$
115,178

 

$
244,419

 

$
216,016

 

Loss from continuing operations attributable to Acorda

 

$
(25,085)

 

$
(11,058)

 

$
(43,177)

 

$
(22,996)

 

 

Intangible Assets and Goodwill (Tables)

 

 

 

 

 

June 30, 2016

 

December 31, 2015

 

(Dollars In thousands)

 

Estimated
Remaining
Useful
Lives
(Years)

 

Cost

 

Accumulated
Amortization

 

Foreign
Currency
Translation

 

Net
Carrying
Amount

 

Cost

 

Accumulated
Amortization

 

Net
Carrying
Amount

 

In-process research & development (1)

 

Indefinite-
lived

 

$
683,500

 

$-

 

$
(586)

 

$
682,914

 

$
423,000

 

$-

 

$
423,000

 

Selincro

 

7

 

65,000

 

(1,935)

 

(1,115)

 

61,950

 

-

 

-

 

-

 

Ampyra milestones

 

11

 

5,750

 

(2,529)

 

-

 

3,221

 

5,750

 

(2,380)

 

3,370

 

Ampyra CSRO royalty buyout

 

4

 

3,000

 

(1,962)

 

-

 

1,038

 

3,000

 

(1,817)

 

1,183

 

Website development costs

 

3

 

12,705

 

(10,657)

 

-

 

2,048

 

12,504

 

(9,467)

 

3,037

 

Website development costs – in process

 

n/a

 

353

 

-

 

-

 

353

 

266

 

-

 

266

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$
770,308

 

$
(17,083)

 

$
(1,701)

 

$
751,524

 

$
444,520

 

$
(13,664)

 

$
430,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes the fair values of:  CVT-301: $423.0 million; tozadenant: $232.0 million; SYN-120: $24.2 million and BTT-1023: $4.3 million

 

 

Estimated future amortization expense for intangible assets subsequent to June 30, 2016 is as follows:

 

(In thousands)

 

 

 

2016

 

$
5,640

 

2017

 

10,868

 

2018

 

10,172

 

2019

 

9,924

 

2020

 

9,602

 

Thereafter

 

23,166

 

 

 

 

 

 

 

$
69,372

 

 

 

 

 

 

In thousands

 

 

 

Balance at December 31, 2015

 

$
183,636

 

Goodwill associated with the acquisition of Biotie Therapies

 

102,676

 

Foreign currency translation adjustment

 

(1,808)

 

 

 

 

 

Balance at June 30, 2016

 

$
284,504

 

 

 

 

 

 

Share-based Compensation (Tables)

 

 

 

For the three-month

 

For the six-month

 

 

 

period ended June 30,

 

period ended June 30,

 

(In millions)

 

2016

 

2015

 

2016

 

2015

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

  $

2.6

 

  $

2.2

 

  $

4.7

 

  $

4.0

 

Selling, general and administrative

 

6.7

 

6.5

 

12.7

 

11.8

 

 

 

 

 

 

 

 

 

 

 

Total

 

  $

9.3

 

  $

8.7

 

  $

17.4

 

  $

15.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of Shares
(In thousands)

 

Weighted Average
Exercise Price

 

Weighted Average
Remaining
Contractual
Term

 

Intrinsic Value
(In thousands)

 

Balance at January 1, 2016

 

8,223

 

$
30.97

 

 

 

 

 

Granted

 

1,555

 

32.55

 

 

 

 

 

Cancelled

 

(256)

 

35.37

 

 

 

 

 

Exercised

 

(111)

 

17.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2016

 

9,411

 

$
31.27

 

6.7

 

$
6,766

 

 

 

 

 

 

 

 

 

 

 

Vested and expected to vest at June 30, 2016

 

9,295

 

$
31.24

 

6.7

 

$
6,765

 

 

 

 

 

 

 

 

 

 

 

Vested and exercisable at June 30, 2016

 

5,724

 

$
29.40

 

5.3

 

$
6,755

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)
Restricted Stock

 

Number of Shares

 

Nonvested at January 1, 2016

 

441

 

Granted

 

609

 

Vested

 

(18)

 

Forfeited

 

(179)

 

 

 

 

 

Nonvested at June 30, 2016

 

853

 

 

 

 

 

 

Earnings Per Share (Tables)

 

(In thousands, except per share data)

 

Three-month
period ended
June 30, 2016

 

Three-month
period ended
June 30, 2015

 

Six-month
period ended
June 30, 2016

 

Six-month
period ended
June 30, 2015

 

Basic and diluted

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$
(18,279)

 

$
997

 

$
(18,800)

 

$
(2,088)

 

Weighted average common shares outstanding used in computing net (loss) income per share—basic

 

45,338

 

42,085

 

45,077

 

42,058

 

Plus: net effect of dilutive stock options and restricted common shares

 

 

1,197

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding used in computing net (loss) income per share—diluted

 

45,338

 

43,282

 

45,077

 

42,058

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share—basic

 

$
(0.40)

 

$
0.02

 

$
(0.42)

 

$
(0.05)

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share—diluted

 

$
(0.40)

 

$
0.02

 

$
(0.42)

 

$
(0.05)

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Three-month
period ended
June 30, 2016

 

Three-month
period ended
June 30, 2015

 

Six-month
period ended
June 30, 2016

 

Six-month
period ended
June 30, 2015

 

Denominator

 

 

 

 

 

 

 

 

 

Stock options and restricted common shares

 

7,502

 

5,406

 

7,536

 

3,974

 

Convertible note – Saints Capital

 

10

 

19

 

10

 

19

 

 

Fair Value Measurements (Tables)

 

(In thousands)

 

Level 1

 

Level 2

 

Level 3

 

June 30, 2016

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

Cash equivalents

 

$
28,976

 

$—

 

$—

 

 

 

 

 

 

 

 

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

 

71,700

 

 

 

 

 

 

 

 

 

December 31, 2015

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

Cash equivalents

 

$
70,504

 

$
13,009

 

$—

 

Short-term investments

 

 

200,101

 

 

 

 

 

 

 

 

 

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

 

63,500

 

 

 

(In thousands)

 

Three-month
period ended
June 30, 2016

 

Three-month
period ended
June 30, 2015

 

Six-month
period ended
June 30, 2016

 

Six-month
period ended
June 30, 2015

 

Acquired contingent consideration:

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$
69,700

 

$
55,700

 

$
63,500

 

$
52,600

 

Fair value change to contingent consideration (unrealized) included in the statement of operations

 

2,000

 

1,100

 

8,200

 

4,200

 

 

 

 

 

 

 

 

 

 

 

Balance, end of period

 

$
71,700

 

$
56,800

 

$
71,700

 

$
56,800

 

 

 

 

 

 

 

 

 

 

 

 

Investments (Tables)

 

(In thousands)

 

Amortized
Cost

 

Gross
unrealized
gains

 

Gross
unrealized
losses

 

Estimated
fair
value

 

June 30, 2016

 

 

 

 

 

 

 

 

 

U.S. Treasury bonds

 

$—

 

$—

 

$(—)

 

$—

 

December 31, 2015

 

 

 

 

 

 

 

 

 

U.S. Treasury bonds

 

200,244

 

 

(143)

 

200,101

 

 

(In thousands)

 

Net Unrealized
Gains (Losses) on
Marketable
Securities

 

Balance at December 31, 2015

 

$
(119)

 

Other comprehensive loss before reclassifications:

 

 

Amounts reclassified from accumulated other comprehensive loss

 

119

 

 

 

 

 

Net current period other comprehensive income

 

119

 

 

 

 

 

Balance at June 30, 2016

 

$—

 

 

 

 

 

 

Commitments and Contingencies (Tables)

 

 

 

Payments due by period (1)(9)

 

(In thousands)

 

Total

 

Less
than
1 year

 

1-3 years

 

4-5 years

 

Convertible Senior Notes (2)

 

$
374,575

 

$
6,038

 

$
12,075

 

$
356,462

 

Convertible note payable (3)

 

1,144

 

1,144

 

 

 

Capital loans (4) (6)

 

19,987

 

 

 

 

Research and development loans (5) (6)

 

2,987

 

597

 

1,195

 

1,195

 

Operating leases (7)

 

30,434

 

6,192

 

12,330

 

11,912

 

Inventory purchase commitments (8)

 

30,484

 

30,484

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
459,611

 

$
44,455

 

$
25,600

 

$
369,569

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Excludes a liability for uncertain tax positions totaling $6.5 million.  This liability has been excluded because the Company cannot currently make a reliable estimate of the period in which the liability will be payable, if ever.

 

(2)

Represents the future payments of principal and interest to be made on the Convertible Senior Notes issued in June 2014 and due in 2021.

 

(3)

Represents the remaining annual payment of principal and interest to be made on the convertible note payable to Saints Capital.

 

(4)

Represents payments for the convertible and non-convertible capital loans.  The convertible capital loan and the non-convertible capital loans have a stated maturity of less than one year.  However, the repayment of these loans and payment of accrued interest thereon are governed by a restrictive condition, according to which the loan principal must only be repaid if Biotie’s consolidated restricted equity is fully covered.  Accrued interest must only be paid if Biotie, including its subsidiaries, has sufficient funds for profit distribution as of the most recently ended fiscal year.  Interest accrues in the interim.

 

(5)

Represents the future principal payments on the R&D loans acquired from Biotie.

 

(6)

The amounts do not include interest costs at the loans’ applicable interest rates.

 

(7)

Represents payments for the operating leases of the Company’s Ardsley, NY headquarters, the Company’s manufacturing facility in Chelsea, MA, Biotie’s headquarters at Turku, Finland, and Biotie’s clinical operations in South San Francisco, CA.

 

(8)

Represents Ampyra, Zanaflex, and Qutenza inventory commitments.  The Ampyra inventory commitment is an estimate as the price paid for Ampyra inventory is based on a percentage of the net product sales during the quarter Alkermes ships inventory to us.  Under our supply agreement with Alkermes, we provide Alkermes with monthly written 18-month forecasts, and with annual written five-year forecasts for our supply requirements of Ampyra and two-year forecasts for our supply requirements of Zanaflex Capsules.  In each of the five months for Zanaflex and three months for Ampyra following the submission of our written 18-month forecast we are obligated to purchase the quantity specified in the forecast, even if our actual requirements are greater or less.  We have agreed to purchase at least 75% of our annual requirements of Ampyra from Alkermes, unless Alkermes is unable or unwilling to meet its requirements, for a percentage of net product sales and the quantity of product shipped by Alkermes to us.

 

(9)

Pursuant to the UCB Termination and Transition Agreement, Biotie is required to pay up to $4.3 million (€ 3.9 million) to UCB.  The amount that will be paid will be determined based on a percentage of future consideration Biotie will receive from tozadenant.  The liability is excluded as the Company cannot currently estimate the period in which the liability will be payable, if ever.

 

 

Future minimum commitments under all non-cancelable operating leases subsequent to June 30, 2016 are as follows:

 

(In thousands)

 

 

 

2016

 

$
3,130 

 

2017

 

6,180 

 

2018

 

6,337 

 

2019

 

5,811 

 

2020

 

5,956 

 

Later years

 

18,176 

 

 

 

 

 

 

 

$
45,590 

 

 

 

 

 

 

Summary of Significant Accounting Policies - Exchange Rates (Details)
6 Months Ended
Jun. 30, 2016
Summary of Significant Accounting Policies
 
Period end EUR: USD exchange rate
1.11 
Average period EUR: USD exchange rate
1.13 
Summary of Significant Accounting Policies - Recently Issued / Adopted Accounting Pronouncements (Details) (USD $)
6 Months Ended
Jun. 30, 2016
segment
Dec. 31, 2015
Recently Issued / Adopted Accounting Pronouncements
 
 
Other assets
$ 5,876,000 
$ 247,000 
Convertible senior notes (due 2021)
(294,854,000)
(290,420,000)
Segment and Geographic Information
 
 
Number of operating segments
 
Number of reportable operating segments
 
Accounting Standards Update 2015-03 |
Other Noncurrent Assets
 
 
Recently Issued / Adopted Accounting Pronouncements
 
 
Unamortized debt issuance cost
 
(5,000,000)
Accounting Standards Update 2015-03 |
Convertible senior notes (due 2021)
 
 
Recently Issued / Adopted Accounting Pronouncements
 
 
Unamortized debt issuance cost
 
5,000,000 
As Previously Reported
 
 
Recently Issued / Adopted Accounting Pronouncements
 
 
Other assets
 
5,296,000 
Convertible senior notes (due 2021)
 
$ (295,469,000)
Acquisitions - Biotie Therapies Corp (Details) (USD $)
3 Months Ended 6 Months Ended 0 Months Ended 3 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Dec. 31, 2015
May 4, 2016
Biotie Therapies Corp.
Apr. 18, 2016
Biotie Therapies Corp.
Jun. 30, 2016
Biotie Therapies Corp.
Jun. 30, 2016
Biotie Therapies Corp.
May 4, 2016
Biotie Therapies Corp.
Apr. 18, 2016
Biotie Therapies Corp.
Apr. 18, 2016
Biotie Therapies Corp.
IPR&D
Jun. 30, 2016
Biotie Therapies Corp.
Selling, general, and administrative
Jun. 30, 2016
Biotie Therapies Corp.
Selling, general, and administrative
Acquisitions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate equity purchase price
 
 
 
 
 
 
$ 350,000,000 
 
 
 
 
 
 
 
Voting interest acquired (as a percent)
 
 
 
 
 
 
 
97.00% 
97.00% 
4.00% 
93.00% 
 
 
 
Purchase consideration for subsequent acquisition
 
 
 
 
 
14,500,000 
 
 
 
 
 
 
 
 
Preliminary allocation of purchase price to estimated fair values of assets acquired and liabilities assumed