ACORDA THERAPEUTICS INC, 10-Q filed on 11/7/2011
Quarterly Report
Document And Entity Information (USD $)
9 Months Ended
Sep. 30, 2011
Oct. 31, 2011
Jun. 30, 2011
Entity Registrant Name
ACORDA THERAPEUTICS INC 
 
 
Entity Central Index Key
0001008848 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Public Float
 
 
$ 859,576,238 
Entity Common Stock, Shares Outstanding
 
39,667,483 
 
Document Fiscal Year Focus
2011 
 
 
Document Fiscal Period Focus
Q3 
 
 
Document Type
10-Q 
 
 
Amendment Flag
FALSE 
 
 
Document Period End Date
Sep. 30, 2011 
 
 
Consolidated Balance Sheets (unaudited) (USD $)
In Thousands
Sep. 30, 2011
Dec. 31, 2010
Current assets:
 
 
Cash and cash equivalents
$ 44,385 
$ 34,641 
Restricted cash
303 
302 
Short-term investments
224,428 
205,389 
Trade accounts receivable, net
20,608 
22,272 
Prepaid expenses
7,099 
6,413 
Finished goods inventory held by the Company
28,617 
36,232 
Finished goods inventory held by others
1,152 
2,186 
Other current assets
7,781 
3,734 
Total current assets
334,373 
311,169 
Property and equipment, net of accumulated depreciation
3,595 
3,203 
Intangible assets, net of accumulated amortization
7,053 
21,336 
Non-current portion of deferred cost of license revenue
5,600 
6,050 
Other assets
477 
343 
Total assets
351,098 
342,101 
Current liabilities:
 
 
Accounts payable
13,943 
16,961 
Accrued expenses and other current liabilities
19,239 
33,769 
Deferred product revenue-Zanaflex tablets
9,918 
9,526 
Deferred product revenue-Zanaflex Capsules
19,401 
21,770 
Current portion of deferred license revenue
9,057 
9,429 
Current portion of revenue interest liability
1,735 
1,297 
Current portion of convertible notes payable
1,144 
1,144 
Total current liabilities
74,437 
93,896 
Non-current portion of deferred license revenue
80,007 
86,429 
Put/call liability
1,457 
391 
Non-current portion of revenue interest liability
2,618 
3,586 
Non-current portion of convertible notes payable
5,183 
6,185 
Other non-current liabilities
480 
353 
Commitments and contingencies
 
 
Common stock, $0.001 par value. Authorized 80,000,000 shares at September 30, 2011 and December 31, 2010; issued and outstanding 39,121,293 and 38,779,370 shares as of September 30, 2011 and December 31, 2010, respectively
39 
39 
Treasury stock at cost (12,420 shares at September 30, 2011 and December 31, 2010)
(329)
(329)
Additional paid-in capital
609,312 
591,650 
Accumulated deficit
(422,175)
(440,086)
Accumulated other comprehensive income
69 
(13)
Total stockholders' equity
186,916 
151,261 
Total liabilities and stockholders' equity
$ 351,098 
$ 342,101 
Consolidated Balance Sheets (unaudited) (Parenthetical) (USD $)
Sep. 30, 2011
Dec. 31, 2010
Liabilities and Stockholders' Equity
 
 
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)
39,121,293 
38,779,370 
Common stock, outstanding (shares)
39,121,293 
38,779,370 
Treasury stock at cost (shares)
12,420 
12,420 
Consolidated Statements Of Operations (unaudited) (USD $)
In Thousands, except Share data
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2011
2010
2011
2010
Revenues:
 
 
 
 
Net sales
$ 65,420 
$ 61,265 
$ 187,222 
$ 117,134 
Milestone revenue
25,000 
25,000 
License revenue
2,264 
2,357 
6,793 
7,071 
Royalty revenue
347 
578 
Total net revenues
93,031 
63,622 
219,593 
124,205 
Costs and expenses:
 
 
 
 
Cost of sales
26,651 
11,666 
50,749 
22,574 
Cost of milestone and license revenue
1,908 
165 
2,225 
495 
Research and development
9,088 
7,970 
31,804 
22,628 
Selling, general and administrative
34,718 
30,558 
112,788 
91,054 
Total operating expenses
72,365 
50,359 
197,566 
136,751 
Operating income (loss)
20,666 
13,263 
22,027 
(12,546)
Other expense (net):
 
 
 
 
Interest and amortization of debt discount expense
(947)
(944)
(3,359)
(3,352)
Interest income
134 
111 
408 
450 
Other income
Total other expense (net)
(813)
(825)
(2,951)
(2,894)
Income (loss) before taxes
19,853 
12,438 
19,076 
(15,440)
Provision for income taxes
(986)
(1,165)
Net income (loss)
$ 18,867 
$ 12,438 
$ 17,911 
$ (15,440)
Net income (loss) per share-basic (in dollars per share)
$ 0.48 
$ 0.32 
$ 0.46 
$ (0.40)
Net income (loss) per share-diluted (in dollars per share)
$ 0.47 
$ 0.31 
$ 0.45 
$ (0.40)
Weighted average common shares outstanding used in computing net loss per share-basic (in shares)
39,100 
38,450 
38,940 
38,261 
Weighted average common shares outstanding used in computing net loss per share-diluted (in shares)
40,174 
39,988 
40,035 
38,261 
Consolidated Statements Of Cash Flows (unaudited) (USD $)
In Thousands
9 Months Ended
Sep. 30,
2011
2010
Consolidated Statements Of Cash Flows (unaudited) [Abstract]
 
 
Net income (loss)
$ 17,911 
$ (15,440)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
Share-based compensation expense
13,847 
12,557 
Amortization of net premiums and discounts on short-term investments
5,033 
2,891 
Amortization of revenue interest issuance cost
88 
80 
Depreciation and amortization expense
3,208 
2,818 
Intangible asset impairment
13,038 
Loss (gain) on put/call liability
1,066 
(319)
Changes in assets and liabilities:
 
 
Decrease (increase) in accounts receivable
1,664 
(12,490)
Increase in prepaid expenses and other current assets
(4,734)
(728)
Decrease (increase) in inventory held by the Company
7,615 
(19,582)
Decrease in inventory held by others
1,034 
293 
Decrease in non-current portion of deferred cost of license revenue
450 
495 
Increase in other assets
(222)
(Decrease) increase in accounts payable, accrued expenses, other current liabilities
(18,811)
16,303 
Increase in revenue interest liability interest payable
823 
337 
Decrease in current portion of deferred license revenue
(371)
Decrease in non-current portion of deferred license revenue
(6,422)
(7,071)
Increase in other non-current liabilities
127 
429 
Increase (decrease) in deferred product revenue-Zanaflex tablets
392 
(506)
Decrease in deferred product revenue-Zanaflex Capsules
(2,370)
(871)
Net cash provided by (used in) operating activities
33,366 
(20,803)
Cash flows from investing activities:
 
 
Purchases of property and equipment
(1,232)
(2,207)
Purchases of intangible assets
(863)
(6,894)
Purchases of short-term investments
(203,989)
(217,862)
Proceeds from maturities of short-term investments
180,000 
276,250 
Net cash (used in) provided by investing activities
(26,084)
49,287 
Cash flows from financing activities:
 
 
Proceeds from issuance of common stock and option exercises
3,816 
7,998 
Repayments of revenue interest liability
(1,354)
(1,391)
Net cash provided by financing activities
2,462 
6,607 
Net increase in cash and cash equivalents
9,744 
35,091 
Cash and cash equivalents at beginning of period
34,641 
47,314 
Cash and cash equivalents at end of period
44,385 
82,405 
Supplemental disclosure:
 
 
Cash paid for interest
$ 2,394 
$ 2,850 
Organization and Business Activities
Organization and Business Activities
(1) Organization and Business Activities
 
Acorda Therapeutics, Inc. (“Acorda” or the “Company”) is a commercial stage biopharmaceutical company dedicated to the identification, development and commercialization of novel therapies that improve neurological function in people with multiple sclerosis (MS), spinal cord injury (SCI) and other disorders of the central nervous system (CNS).
 
The management of the Company is responsible for the accompanying unaudited interim consolidated financial statements and the related information included in the notes to the consolidated financial statements. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, including normal recurring adjustments necessary for the fair presentation of the Company's financial position and results of operations and cash flows for the periods presented. Results of operations for interim periods are not necessarily indicative of the results to be expected for the entire year.
 
These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2010 included in the Company's Annual Report on Form 10-K for such year, as filed with the Securities and Exchange Commission (the “SEC”).
 
The Company finances its operations through a combination of issuance of equity securities, revenues from Ampyra and Zanaflex Capsules and Zanaflex tablets (collectively “Zanaflex”), loans, collaborations, and, to a lesser extent, grants. There are no assurances that the Company will be successful in obtaining an adequate level of financing needed to fund its development and commercialization efforts. To the extent the Company's capital resources are insufficient to meet future operating requirements, the Company will need to raise additional capital, reduce planned expenditures, or incur indebtedness to fund its operations. The Company may be unable to obtain additional debt or equity financing on acceptable terms, if at all. If adequate funds are not available, the Company may be required to curtail its sales and marketing efforts, delay, reduce the scope of or eliminate some of its research and development programs or obtain funds through arrangements with collaborative partners or others that may require us to relinquish rights to certain product candidates that it might otherwise seek to develop or commercialize independently.
Accounting Policy
Accounting Policy
(2) Summary of Significant Accounting Policies
 
Principles of Consolidation
 
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and include the results of operations of the Company and its majority owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
 
Use of Estimates
 
The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include research and development and share-based compensation accounting, which are largely dependent on the fair value of the Company's equity securities. In addition, the Company recognizes Zanaflex revenue based on estimated prescriptions filled. The Company adjusts its Zanaflex inventory value based on an estimate of inventory that may be returned. Actual results could differ from those estimates.
 
Revenue Recognition
 
Ampyra

Ampyra is available only through a network of specialty pharmacy providers that provide the medication to patients by mail, Kaiser Permanente (Kaiser), and the U.S. Department of Veterans Affairs (VA). Ampyra is not available in retail pharmacies. The Company applies the revenue recognition guidance in Staff Accounting Bulletin (SAB) 104 and does not recognize revenue from product sales until there is persuasive evidence of an arrangement, delivery has occurred, the price is fixed and determinable, the buyer is obligated to pay the Company, the obligation to pay is not contingent on resale of the product, the buyer has economic substance apart from the Company, the Company has no obligation to bring about the sale of the product, the amount of returns can be reasonably estimated and collectability is reasonably assured. The Company recognizes product sales of Ampyra following shipment of product to a network of specialty pharmacy providers, Kaiser and the specialty distributor to the VA. As of September 30, 2011, inventory levels at specialty pharmacy providers that distribute Ampyra (excluding Kaiser and the specialty distributor to the VA) were approximately two weeks of their anticipated usage. The specialty pharmacy providers, Kaiser and the specialty distributor to the VA are contractually obligated to hold no more than 30 days of inventory.

The Company's net revenues represent total revenues less allowances for customer credits, including estimated rebates, discounts and returns. These allowances are recorded for cash consideration given by a vendor to a customer that is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, are characterized as a reduction of revenue. At the time product is shipped to specialty pharmacies, Kaiser and the specialty distributor to the VA, an adjustment is recorded for estimated rebates, discounts and returns. These allowances are established by management as its best estimate based on available information and will be adjusted to reflect known changes in the factors that impact such allowances. Allowances for rebates, discounts and returns are established based on the contractual terms with customers, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products.  Product shipping and handling costs are included in cost of sales.

Based on the Company's specialty distribution model where it sells to only 12 specialty pharmacies, Kaiser and the VA (through a specialty distributor), the inventory and prescription data it receives from these distributors, and returns experience of other specialty products with similar selling models, the Company has been able to make a reasonable estimate for product returns. At September 30, 2011, inventory levels at the specialty pharmacies (excluding Kaiser and the specialty distributor to the VA) represented approximately two weeks of their anticipated usage. The Company will accept returns of Ampyra for two months prior to and six months after the product expiration date. The Company will provide a credit for such returns to customers with whom we have a direct relationship. Once product is prescribed, it cannot be returned. The Company does not exchange product from inventory for the returned product.

Zanaflex
 
The Company applies the revenue recognition guidance in Accounting Standards Codification (ASC) 605-15-25, which among other criteria requires that future returns can be reasonably estimated in order to recognize revenue. The amount of future tablet returns is uncertain due to generic competition and customer conversion to Zanaflex Capsules. The Company has accumulated some sales history with Zanaflex Capsules; however, due to existing and potential generic competition and customer conversion from Zanaflex tablets to Zanaflex Capsules, we do not believe we can reasonably determine a return rate at this time. As a result, the Company accounts for these product shipments using a deferred revenue recognition model. Under the deferred revenue model, the Company does not recognize revenue upon product shipment. For these product shipments, the Company invoices the wholesaler, records deferred revenue at gross invoice sales price, and classifies the cost basis of the product held by the wholesaler as a component of inventory. The Company recognizes revenue when prescribed to the end-user, on a first-in first-out (FIFO) basis. The Company's revenue to be recognized is based on (1) the estimated prescription demand, based on pharmacy sales for its products; and (2) the Company's analysis of third-party information, including third-party market research data. The Company's estimates are subject to the inherent limitations of estimates that rely on third-party data, as certain third-party information is itself in the form of estimates, and reflect other limitations. The Company's sales and revenue recognition reflects the Company's estimates of actual product prescribed to the end-user. The Company expects to be able to apply a more traditional revenue recognition policy such that revenue is recognized following shipment to the customer when it believes it has sufficient data to develop reasonable estimates of expected returns based upon historical returns and greater certainty regarding generic competition.
 
The Company's net revenues represent total revenues less allowances for customer credits, including estimated discounts, rebates, and chargebacks. These allowances are recorded for cash consideration given by a vendor to a customer that is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be characterized as a reduction of revenue when recognized in the vendor's statement of operations. Adjustments are recorded for estimated chargebacks, rebates, and discounts. These allowances are established by management as its best estimate based on available information and are adjusted to reflect known changes in the factors that impact such allowances. Allowances for chargebacks, rebates and discounts are established based on the contractual terms with customers, analysis of historical levels of discounts, chargebacks and rebates, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for each product and anticipated introduction of competitive products. In addition, the Company records a charge to cost of goods sold for the cost basis of the estimated product returns the Company believes may ultimately be realized at the time of product shipment to wholesalers. The Company has recognized this charge at the date of shipment since it is probable that it will receive a level of returned products; upon the return of such product it will be unable to resell the product considering its expiration dating; and it can reasonably estimate a range of returns. This charge represents the cost basis for the low end of the range of the Company's estimated returns. Product shipping and handling costs are included in cost of sales.
 
Milestones and royalties

In order to determine the revenue recognition for contingent milestones, the Company evaluates the contingent milestones using the criteria as provided by the Financial Accounting Standards Boards (FASB) guidance on the milestone method of revenue recognition. At the inception of a collaboration agreement the Company evaluates if payments are substantive.  The criteria requires that (i) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from the Company's activities to achieve the milestone, (ii) the milestone be related to past performance, and (iii) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement.  If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. Royalties are recognized as earned in accordance with the terms of various research and collaboration agreements.

Collaborations
 
The Company recognizes collaboration revenues and expenses by analyzing each element of the agreement to determine if it shall be accounted for as a separate element or single unit of accounting. If an element shall be treated separately for revenue recognition purposes, the revenue recognition principles most appropriate for that element are applied to determine when revenue shall be recognized. If an element shall not be treated separately for revenue recognition purposes, the revenue recognition principles most appropriate for the bundled group of elements are applied to determine when revenue shall be recognized. Payments received in excess of revenues recognized are recorded as deferred revenue until such time as the revenue recognition criteria have been met.
 
Ampyra Inventory
 
Prior to regulatory approval of Ampyra in the three-month period ended March 31, 2010, the Company incurred expenses for the manufacture of bulk, unpackaged product of Ampyra that ultimately became available to support the commercial launch of this drug candidate. Until the necessary initial regulatory approval was received, we charged all such amounts to research and development expenses as there was no alternative future use prior to regulatory approval. As a result, our initial sales of Ampyra resulted in higher gross margins than if the inventory costs had not previously been expensed. Upon regulatory approval of Ampyra, the Company began capitalizing the commercial inventory costs associated with manufacturing with Alkermes plc (Alkermes), formerly Elan Corporation, plc (Elan), and its second manufacturer, Patheon. During the third quarter of 2011, Alkermes acquired the Elan business that supplies our Ampyra inventory.
 
Concentration of Risk
 
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments in cash and cash equivalents, restricted cash and accounts receivable. The Company maintains cash and cash equivalents and restricted cash with approved financial institutions. The Company is exposed to credit risks and liquidity risks in the event of default by the financial institutions or issuers of investments in excess of FDIC insured limits. The Company performs periodic evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any institution.
 
Segment Information
 
The Company is managed and operated as one business. 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. Accordingly, the Company does not prepare discrete financial information with respect to separate products or product candidates or by location and does not have separately reportable segments.
 
Reclassification
 
Certain prior period amounts have been reclassified to conform to current year presentation.
 
Recent Accounting Pronouncements
 
In June 2011, the FASB issued an accounting standards update regarding the presentation of comprehensive income in financial statements. The provisions of this standard provide an option to present the components of net income and other comprehensive income either as one continuous statement of comprehensive income or as two separate but consecutive statements. The provisions of this new disclosure standard are effective January 1, 2012.  The Company does not believe this accounting standard update will have a material effect on its financial statements.
Share-based Compensation
Share-based Compensation
(3) Share-based Compensation
 
During the three-month periods ended September 30, 2011 and 2010, the Company recognized share-based compensation expense of $5.1 million and $4.8 million, respectively. During the nine-month periods ended September 30, 2011 and 2010, the Company recognized share-based compensation expense of $13.8 million and $12.5 million, respectively. Activity in options and restricted stock during the nine-month period ended September 30, 2011 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 September 30, 2011 and 2010 were approximately $13.61 and $19.75, respectively.  The weighted average fair value per share of options granted to employees for the nine-month periods ended September 30, 2011 and 2010 were approximately $13.11 and $19.37, respectively.
 
The following table summarizes share-based compensation expense included within the consolidated statements of operations:
 
   
For the three-month
 
For the nine-month
   
period ended September 30,
 
period ended September 30,
(In millions)
 
2011
 
2010
 
2011
 
2010
                         
Research and development
 
$
            1.5
 
$
            1.4
 
$
            4.1
 
$
           3.6
Selling, general and administrative
   
            3.5
   
            3.4
   
            9.7
   
           8.9
 Total
 
$
           5.0
 
$
           4.8
 
$
 13.8
 
$
12.5
 
A summary of share-based compensation activity for the nine-month period ended September 30, 2011 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, 2011
  4,084  $20.13       
Granted
  1,132   23.72       
Cancelled
  (127)  25.95       
Exercised
  (320)  11.94       
Balance at September 30, 2011
  4,769  $21.38   6.9  $13,589 
Vested and expected to vest at September 30, 2011
  4,677  $21.29   6.9  $13,589 
Vested and exercisable at September 30, 2011
  2,795  $17.94   5.7  $13,570 
 
Restricted Stock Activity
 
(In thousands)
Restricted Stock
Number of Shares
Nonvested at January 1, 2011
324
Granted
276
Vested
(22)
Forfeited
(19)
Nonvested at September 30, 2011
559
 
As of September 30, 2011, there was $36.7 million of total unrecognized compensation costs related to unvested options and restricted stock awards that the Company expects to recognize over a weighted average period of approximately 2.5 years.
Earnings Per Share
Earnings Per Share
(4) Earnings Per Share
 
The following table sets forth the computation of basic and diluted earnings per share for the three and nine-month periods ended September 30, 2011 and 2010:
 
(In thousands, except per share data)
 
Three-month
period ended
September 30,
2011
  
Three-month
period ended
September 30,
2010
  
Nine-month
period ended
September 30,
2011
  
Nine-month
period ended
September 30,
2010
 
Basic and diluted
            
Net income (loss)
 $18,867  $12,438  $17,911  $(15,440)
Weighted average common shares outstanding used in computing net loss per share-basic
  39,100   38,450   38,940   38,261 
Plus: net effect of dilutive stock options and restricted common shares
  1,074   1,538   1,095   - 
Weighted average common shares outstanding used in computing net loss per share-diluted
  40,174   39,988   40,035   38,261 
Net loss per share-basic
 $0.48  $0.32  $0.46  $(0.40)
Net loss per share-diluted
 $0.47  $0.31  $0.45  $(0.40)
 
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.
 
For the nine months ended September 30, 2010, options to purchase 4,098,364 shares of common stock that could potentially dilute basic earnings per share in the future were excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive.  
 
For the nine months ended September 30, 2010, 515,769 shares, respectively, of unvested restricted stock that could potentially dilute basic earnings per share in the future were excluded from the calculation of diluted earnings per common share as their effect would have been anti-dilutive.
Income Taxes
Income Taxes
(5) Income Taxes
 
The Company had available federal net operating loss (NOL) carry-forwards of approximately $234.0 million and $266.9 million and state NOL carry-forwards of approximately $223.1 million and $261.0 million as of September 30, 2011 and December 31, 2010 respectively which may be available to offset future taxable income, if any. The federal losses are expected to expire between 2021 and 2030 while the state losses are expected to expire between 2012 and 2030. The Company also has research and development tax credit carry-forwards of approximately $3.9 million as of September 30, 2011, for federal income tax reporting purposes that may be available to reduce federal income taxes, if any, and expire in future years beginning in 2019.  The Company is no longer subject to federal or state income tax audits for tax years prior to 2006; however, such taxing authorities can review any net operating losses utilized by the Company in years subsequent to 1999. The Company also has Alternative Minimum Tax credit carry-forwards of $1.0 million as of September 30, 2011, respectively.  Such credits can be carried forward indefinitely and have no expiration date.
 
At September 30, 2011 and December 31, 2010, the Company had a deferred tax asset of $148.7 million and $153.8 million, respectively, offset by a full valuation allowance. Since inception, the Company has incurred substantial losses and expects to incur substantial losses in future periods. The Tax Reform Act of 1986 (the “Act”) provides for a limitation of the annual use of NOL and research and development tax credit carryforwards (following certain ownership changes, as defined by the Act) that could significantly limit the Company's ability to utilize these carryforwards.  The Company has experienced various ownership changes as a result of past financings. Accordingly, the Company's ability to utilize the aforementioned carryforwards may be limited. Additionally, because U.S. tax laws limit the time during which these carryforwards may be applied against future taxes, the Company may not be able to take full advantage of these attributes for federal income tax purposes. Because of the above-mentioned factors, the Company has not recognized its gross deferred tax assets as of and for all periods presented. As of September 30, 2011, management believes that it is more likely than not that the gross deferred tax assets will not be realized based on future operations and reversal of deferred tax liabilities. Accordingly, the Company has provided a full valuation allowance against its gross deferred tax assets and no tax benefit has been recognized relative to its pretax losses.
Fair Value Measurements
Fair Value Measurements
(6) 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 September 30, 2011 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 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 and investments in a Treasury money market fund and high-quality government bonds. The Company's Level 3 liability represents our put/call liability related to the Paul Royalty Fund (PRF) transaction. No changes in valuation techniques or inputs occurred during the three months ended September 30, 2011. No transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy occurred during the nine-month period ended September 30, 2011.
 
(In thousands)
 
Level 1
  
Level 2
  
Level 3
 
Assets Carried at Fair Value:
         
Cash equivalents
 $44,385  $-  $- 
Short-term investments
  224,428   -   - 
Liabilities Carried at Fair Value:
            
Put/call liability
  -   -   1,457 
 
The following table presents additional information about assets and/or liabilities measured at fair value on a recurring basis and for which the Company utilizes Level 3 inputs to determine fair value.
 
(In thousands)
 
Balance as of
December 31, 2010
  
Realized (gains)
losses included
in net loss
  
Unrealized
(gains) losses included
in other
comprehensive
loss
  
Balance as of
September 30, 2011
 
Liabilities Carried at Fair Value:
            
Put/call liability
 $391  $1,066  $-  $1,457 
 
The Company estimates the fair value of our put/call liability using a discounted cash flow valuation technique. Using this approach, expected future cash flows are calculated over the expected life of the PRF agreement, are discounted to a single present value and then exercise scenario probabilities are applied. Some of the more significant assumptions made in the present value calculations include (i) the estimated Zanaflex revenue forecast and (ii) the likelihood of put/call exercise trigger events. Realized gains and losses are included in sales, general and administrative expenses.
 
The put/call liability has been classified as a Level 3 asset as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market due to the lack of trading in the security. If different assumptions were used for the various inputs to the valuation approach including, but not limited to, assumptions involving the estimated Zanaflex revenue forecast and the likelihood of trigger events, the estimated fair value of these investments could be significantly higher or lower than the fair value we determined. The Company may be required to record losses in future periods, which may be significant.
Short-Term Investments
Short-Term Investments
(7) Short-Term Investments

The Company has determined that all of its short-term investments are classified as available-for-sale. Available-for-sale securities are carried at fair value with interest on these securities included in interest income and are recorded based primarily on quoted market prices. Available-for-sale securities consisted of the following:
 
(In thousands)
 
Amortized
Cost
  
Gross
unrealized
gains
  
Gross
unrealized
losses
  
Estimated
fair
value
 
September 30, 2011
            
US Treasury bonds
 $224,358  $88  $(18) $224,428 
December 31, 2010
                
US Treasury bonds
  205,402   5   (18)  205,389 
 
The contractual maturities of available-for-sale debt securities at September 30, 2011 and December 31, 2010 are within one year. The Company has determined that there were no other-than-temporary declines in the fair values of its short term investments as of September 30, 2011. Short-term investments with maturity of three months or less from date of purchase have been classified as cash equivalents, and amounted to $34.8 million and $23.5 million as of September 30, 2011 and December 31, 2010, respectively.
Biogen Collaboration Agreement
Biogen Collaboration Agreement
(8) Biogen Collaboration Agreement
 
On June 30, 2009, the Company entered into an exclusive collaboration and license agreement with Biogen Idec International GmbH (Biogen Idec) to develop and commercialize Ampyra (known as Fampyra outside the U.S.) in markets outside the United States (the “Collaboration Agreement”). Under the Collaboration Agreement, Biogen Idec was granted the exclusive right to commercialize Ampyra and other products containing aminopyridines developed under that agreement in all countries outside of the United States, which grant includes a sublicense of the Company's rights under an existing license agreement between the Company and Alkermes (formerly Elan). Biogen Idec has responsibility for regulatory activities and future clinical development of Fampyra in ex-U.S. markets worldwide. The Company also entered into a related supply agreement with Biogen Idec (the “Supply Agreement”), pursuant to which the Company will supply Biogen Idec with its requirements for the licensed products through the Company's existing supply agreement with Alkermes. During the third quarter of 2011, Alkermes acquired the Elan business that granted the license described above and supplies the Company's Ampyra inventory.
 
Under the Collaboration Agreement, the Company was entitled to an upfront payment of $110.0 million as of June 30, 2009, which was received in July 2009, and a $25 million milestone payment upon approval of the product in the European Union, which was received in August 2011. The Company is also entitled to receive additional payments of up to $10 million based on the successful achievement of future regulatory milestones and up to $365 million based on the successful achievement of future sales milestones. Due to the uncertainty surrounding the achievement of the future regulatory and sales milestones, these payments will not be recognized as revenue unless and until they are earned. The Company is not able to reasonably predict if and when the milestones will be achieved. Under the Collaboration Agreement, Biogen Idec will be required to make double-digit tiered royalty payments to the Company on ex-U.S. sales. In addition, the consideration that Biogen Idec will pay for licensed products under the Supply Agreement will reflect the price owed to the Company's suppliers under its supply arrangements with Alkermes or other suppliers for ex-U.S. sales, including manufacturing costs and royalties owed. The Company and Biogen Idec may also carry out future joint development activities regarding licensed product under a cost-sharing arrangement. Under the terms of the Collaboration Agreement, the Company, in part through its participation in joint committees with Biogen Idec, will participate in overseeing the development and commercialization of Ampyra and other licensed products in markets outside the United States pursuant to that agreement. Acorda will continue to develop and commercialize Ampyra independently in the United States.
 
As of June 30, 2009, the Company recorded a license receivable and deferred revenue of $110.0 million for the upfront payment due to the Company from Biogen Idec under the Collaboration Agreement. Also, as a result of such payment to Acorda, a payment of $7.7 million became payable by Acorda to Elan and was recorded as a cost of license payable and deferred expense. The payment of $110.0 million was received from Biogen Idec on July 1, 2009 and the payment of $7.7 million was made to Elan on July 7, 2009.
 
The Company considered the following deliverables with respect to the revenue recognition of the $110.0 million upfront payment:  (1) the license to use the Company's technology, (2) the Collaboration Agreement to develop and commercialize licensed product in all countries outside the U.S., and (3) the Supply Agreement. Due to the inherent uncertainty in obtaining regulatory approval, the applicability of the Supply Agreement is outside the control of the Company and Biogen Idec. Accordingly, we have determined the Supply Agreement is a contingent deliverable at the onset of the agreement.  As a result, the Company has determined the Supply Agreement does not meet the definition of a deliverable that needs to be accounted for at the inception of the arrangement. The Company has also determined that there is no significant and incremental discount related to the supply agreement since Biogen Idec will pay the same amount for inventory that the Company would pay and the Company effectively acts as a middle man in the arrangement for which it adds no significant value due to various factors such as the Company does not have any manufacturing capabilities or other knowhow with respect to the manufacturing process.
 
The Company has determined that the identified non-contingent deliverables (deliverables 1 and 2 immediately preceding) would have no value on a standalone basis if they were sold separately by a vendor and the customer could not resell the delivered items on a standalone basis, nor does the Company have objective and reliable evidence of fair value for the deliverables. Accordingly, the non-contingent deliverables are treated as one unit of accounting.  As a result, the Company will recognize the non-refundable upfront payment from Biogen Idec as revenue and the associated payment to Elan as expense ratably over the estimated term of regulatory exclusivity for the licensed products under the Collaboration Agreement as we had determined this was the most probable expected benefit period. The Company recognized $2.3 million and $6.8 million in license revenue, a portion of the $110.0 million received from Biogen Idec, and $159,000 and $476,000 in cost of license revenue, a portion of the $7.7 million paid to Alkermes, during the three and nine-month periods ended September 30, 2011, respectively.
 
On January 21, 2011 Biogen Idec announced that the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) decided against approval of Fampyra to improve walking ability in adult patients with multiple sclerosis.  Biogen Idec, working closely with the Company, filed a formal appeal of the decision.  In May 2011, the CHMP recommended conditional marketing authorization, and in July 2011 Biogen Idec received conditional approval from the European Commission for, Fampyra (prolonged-release fampridine tablets) for the improvement of walking in adult patients with MS with walking disability (Expanded Disability Status Scale of 4-7). The Company changed the amortization period on a prospective basis during the three-month period ended March 31, 2011 by five months and currently estimates the recognition period to be approximately 12 years from the date of the Collaboration Agreement.
 
As part of its ex-U.S. license agreement, Biogen Idec owes Acorda royalties based on ex-U.S. net sales, and milestones based on ex-U.S. regulatory approval, new indications, and ex-U.S. net sales.  These milestones included a $25 million payment for approval of the product in the European Union which was recorded and paid in the three month period ended September 30. 2011. Based on Acorda's worldwide license and supply agreement with Elan, Elan received 7% of this milestone payment from Acorda during the same period.  For revenue recognition purposes, the Company has determined this milestone to be substantive in accordance with applicable accounting guidance related to milestone revenue.  Therefore, the payment was recognized in its entirety as revenue and the cost of the milestone revenue was recognized in its entirety as an expense during the three-month period ended September 30, 2011.
 
Cost of milestone and license revenue includes $159,000 and $476,000 in cost of license revenue, which represents the amortized portion of the $7.7 million paid to Alkermes in 2009, for the three and nine-month periods ended September 30, 2011, respectively.  It also includes $1.8 million in cost of milestone revenue, which represents the 7% Elan portion of the $25 million milestone paid during the three-month period ended September 30, 2011.
Commitments and Contingencies
Commitments and Contingencies
(9) Commitments and Contingencies
 
A summary of the Company's commitments and contingencies was included in the Company's Annual Report on Form 10-K for the twelve-month period ended December 31, 2010. The Company's long-term contractual obligations include commitments and estimated purchase obligations entered into in the normal course of business.   
 
In June 2011, the Company entered into a 15 year lease for an aggregate of approximately 138,000 square feet of laboratory and office space in Ardsley, New York.  The Company plans to relocate its corporate headquarters, and all employees based at its Hawthorne, New York location, to the Ardsley facility.  The company anticipates taking possession of the new space in June 2012, subject to completion of certain improvements to the facility prior to the Company's occupancy.  The commencement of the term would be deferred in the case of certain delays in the completion of those improvements.  The Company has options to extend the term of the lease for three additional five-year periods, and the Company has an option to terminate the lease after 10 years subject to payment of an early termination fee.  Also, the Company has rights to lease up to approximately 120,000 additional square feet of space in additional buildings at the same location.  The Company's extension, early termination, and expansion rights are subject to specified terms and conditions, including specified time periods when they must be exercised, and are also subject to limitations including that the Company not be in default under the lease.  The lease provides for monthly payments of rent during the term. These payments consist of base rent, which takes into account the costs of the facility improvements being funded by the facility owner prior to the Company's occupancy, and additional rent covering customary items such as charges for utilities, taxes, operating expenses, and other facility fees and charges.  The base rent will initially be $3.4 million per year, and will be subject to a 2.5% annual increase.
 
In June 2011, the Company licensed worldwide development and commercialization rights to a proprietary magnesium formulation from Medtronic, Inc., which the Company refers to as AC105. The Company made a $3 million upfront payment to Medtronic during the three-month period ended June 30, 2011 and recorded the expense as research and development expense.  The Company will make up to $32 million in regulatory and development milestone payments, if achieved. A single-digit sales royalty will also be paid by the Company to Medtronic if AC105 is commercialized by the Company.

The Company may be, from time to time, a party to various disputes and claims arising from normal business activities. The Company accrues for loss contingencies when information available indicates that it is probable that a liability has been incurred and the amount of such loss can be reasonably estimated. The Company believes that the ultimate resolution of these matters will not have a material adverse effect on the Company's financial condition or liquidity. However, adjustments, if any, to the Company's estimates could be material to operating results for the periods in which adjustments to the liability are recorded.
Intangible Assets
Intangible Assets
(10) Intangible Assets
 
The Company acquired all of Elan's U.S. sales, marketing and distribution rights to Zanaflex Capsules and Zanaflex tablets in July 2004 for $2.0 million plus $675,000 for finished goods inventory. The Company was also responsible for up to $19.5 million in future contingent milestone payments based on cumulative gross sales of Zanaflex tablets and Zanaflex Capsules. As of December 31, 2009, the Company made $19.5 million of these milestone payments, which were recorded as intangible assets in the consolidated financial statements.
 
In connection with this transaction, the Company acquired the rights to the trade name "Zanaflex®", one issued U.S. patent and two patent applications related to Zanaflex Capsules, and the remaining tablet inventory on hand with Elan. Additionally, the Company assumed Elan's existing contract with Novartis to manufacture Zanaflex tablets and entered into a separate contract with Elan to manufacture Zanaflex Capsules. The Company separately launched Zanaflex Capsules in April 2005. The Company did not acquire any receivables, employees, facilities or fixed assets. The Company allocated, on a relative fair value basis, the initial and milestone payments made to Elan to the assets acquired, principally the Zanaflex trade name and the capsulation patent. There is no expected residual value of these intangible assets. The Company amortizes the allocated fair value of the trade name and patent over their estimated future economic benefit to be achieved. The Zanaflex trade name was fully amortized as of December 31, 2008.
 
The Company had sued Apotex Corp. and Apotex Inc. (collectively, “Apotex”) for patent infringement related to Apotex Inc.'s submission of an ANDA to the FDA seeking marketing approval for generic versions of Zanaflex Capsules.  On September 7, 2011, the Company announced that the U.S. District Court for the District of New Jersey had ruled against it in that litigation. The Court held that the claims of U.S. Patent No. 6,455,557 covering use of multiparticulate tizanidine compositions are invalid and not infringed by Apotex.  The Company is appealing the decision.  However, Apotex will be able to receive FDA approval of its ANDA and launch generic hydrochloride capsules, if Apotex is able otherwise to satisfy the FDA's review requirements for ANDAs.  Other generic companies may also seek approval for their own generic tizanidine hydrochloride capsules.  If approved by the FDA, this would lead to additional generic tizanidine hydrochloride capsules entering the marketplace, which would likely cause the Company's sales of Zanaflex Capsules to decline significantly.  The Company believes that the intangible asset associated with Zanaflex Capsules were fully impaired based on estimated undiscounted cash flows and the associated fair value of this asset and therefore the Company recorded an asset impairment charge of approximately $13.0 million to write-off the remaining carrying value of this asset during the three-month period ended September 30, 2011.
 
On January 22, 2010, the Company received marketing approval from the FDA for Ampyra triggering two milestone payments of $2.5 million to Elan and $750,000 to Rush-Presbyterian St. Luke's Medical Center (Rush).  The Company made these milestone payments totaling $3.25 million and they were recorded as intangible assets in the consolidated financial statements during the three-month period ended March 31, 2010.
 
In 1990, Elan licensed from Rush know-how relating to dalfampridine (4-aminopyridine, 4-AP, the formulation used in Ampyra), for the treatment of MS. The Company subsequently licensed this know-how from Elan. In September 2003, the Company entered into an agreement with Rush and Elan terminating the Rush license to Elan and providing for mutual releases. The Company also entered into a license agreement with Rush in 2003 in which Rush granted the Company an exclusive worldwide license to its know-how relating to dalfampridine for the treatment of MS. Rush has also assigned to the Company its Orphan Drug Designation for dalfampridine for the relief of symptoms of MS.
 
The Company agreed to pay Rush a license fee, milestone payments of up to $850,000 and royalties based on net sales of the product for neurological indications. The FDA approval of Ampyra triggered the final milestone of $750,000 which was paid during the three-months ended March 31, 2010.  As of December 31, 2010, the Company had made an aggregate of $850,000 in milestone payments under this agreement.  As of September 30, 2011, the Company made or accrued royalty payments totaling $5.7 million.
 
In August 2003, the Company entered into an Amended and Restated License Agreement with the Canadian Spinal Research Organization (CSRO). Under this agreement, the Company was granted an exclusive and worldwide license under certain patent assets and know-how of CSRO relating to the use of dalfampridine in the reduction of chronic pain and spasticity in a spinal cord injured subject.  The agreement required the Company to pay to CSRO royalties based on a percentage of net sales of any product incorporating the licensed rights, including royalties on the sale of Ampyra and on the sale of dalfampridine for any other indication. During the three-month period ended March 31, 2010, the Company purchased CSRO's rights to all royalty payments under the agreement with CSRO for $3.0 million.  This payment was recorded as an intangible asset in the consolidated financial statements.
 
On April 19, 2011 the Company announced the United States Patent and Trademark Office (USPTO) allowed U.S. Patent Application No. 11/010,828 entitled “Sustained Release Aminopyridine Composition.”  The claims of the patent application relate to methods to improve walking in patients with multiple sclerosis (MS) by administering 10 mg of sustained release 4-aminopyridine (dalfampridine) twice daily. The patent that issued from this application, described below, was accorded an initial patent term adjustment by the USPTO of 298 days, initially extending its term to early October 2025.  The Company re-evaluated the useful life of the Ampyra milestones and Ampyra CSRO royalty buyout intangible assets during the three-month period ending June 30, 2011 and the revised estimated remaining useful lives of the assets are presented in the table below.
 
On August 30, 2011 the United States Patent and Trademark Office (USPTO) issued the Company's Patent Application No. 11/010,828 as U.S. Patent No. US 8,007,826  entitled “Sustained Release Aminopyridine Composition.”   The patent, which is eligible for listing in the FDA Orange Book, is now expected to expire in May 2027, including patent term adjustment. The final patent life issuance did not have a material impact on the amortization expense for the current or future periods.
 
Intangible assets also include certain website development costs which have been capitalized. The Company has developed several websites, each with its own purpose, including the general corporate website, product information websites and websites focused on the MS community.
 
The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its intangible assets may warrant revision or that the carrying value of these assets may be impaired. As noted above, the Company evaluated the value and remaining useful lives of the Zanaflex Capsule patents as of September 30, 2011 and recorded a charge of approximately $13.0 million to fully impair these assets. However, as of this date, the Company does not believe that there are any facts or circumstances that would indicate a need for changing the estimated remaining useful life of the Company's intangible assets related to Ampyra.
 
Intangible assets consisted of the following:
 
(In thousands)
 
September 30, 2011
  
December 31,
2010
 
Estimated
remaining
useful lives as of
September 30, 2011
Zanaflex Capsule patents
 $19,350  $19,350 
0 years
Zanaflex trade name
  2,150   2,150 
0 years
Ampyra milestones
  3,250   3,250 
15 years
CSRO royalty buyout
  3,000   3,000 
 9 years
Website development costs 
  3,058   2,975 
0-3 years
Website development costs-in process 
  781   - 
3 years
    31,589   30,725  
Less accumulated amortization
  24,536   9,389  
   $7,053  $21,336  
 
The Company recorded $15.1 million and $2.0 million in amortization expense related to these intangible assets in the nine-month periods ended September 30, 2011 and 2010, respectively, including the asset impairment charge of $13.0 million in 2011.
 
Estimated future amortization expense for intangible assets subsequent to December 31, 2010 for the next five years is as follows (in thousands):
 
2011 (Note 1)
 $15,661 
2012
  1,394 
2013
  1,155 
2014
  491 
2015
  473 
   $19,174 
 
Note 1: Includes $13.0 million for Zanaflex Capsule intangible asset impairment recorded during the three-month period ended September 30, 2011.
Accounting Policy (Policies)
Principles of Consolidation
 
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and include the results of operations of the Company and its majority owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
 
The preparation of the consolidated financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include research and development and share-based compensation accounting, which are largely dependent on the fair value of the Company's equity securities. In addition, the Company recognizes Zanaflex revenue based on estimated prescriptions filled. The Company adjusts its Zanaflex inventory value based on an estimate of inventory that may be returned. Actual results could differ from those estimates.
Revenue Recognition
 
Ampyra

Ampyra is available only through a network of specialty pharmacy providers that provide the medication to patients by mail, Kaiser Permanente (Kaiser), and the U.S. Department of Veterans Affairs (VA). Ampyra is not available in retail pharmacies. The Company applies the revenue recognition guidance in Staff Accounting Bulletin (SAB) 104 and does not recognize revenue from product sales until there is persuasive evidence of an arrangement, delivery has occurred, the price is fixed and determinable, the buyer is obligated to pay the Company, the obligation to pay is not contingent on resale of the product, the buyer has economic substance apart from the Company, the Company has no obligation to bring about the sale of the product, the amount of returns can be reasonably estimated and collectability is reasonably assured. The Company recognizes product sales of Ampyra following shipment of product to a network of specialty pharmacy providers, Kaiser and the specialty distributor to the VA. As of September 30, 2011, inventory levels at specialty pharmacy providers that distribute Ampyra (excluding Kaiser and the specialty distributor to the VA) were approximately two weeks of their anticipated usage. The specialty pharmacy providers, Kaiser and the specialty distributor to the VA are contractually obligated to hold no more than 30 days of inventory.

The Company's net revenues represent total revenues less allowances for customer credits, including estimated rebates, discounts and returns. These allowances are recorded for cash consideration given by a vendor to a customer that is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, are characterized as a reduction of revenue. At the time product is shipped to specialty pharmacies, Kaiser and the specialty distributor to the VA, an adjustment is recorded for estimated rebates, discounts and returns. These allowances are established by management as its best estimate based on available information and will be adjusted to reflect known changes in the factors that impact such allowances. Allowances for rebates, discounts and returns are established based on the contractual terms with customers, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products.  Product shipping and handling costs are included in cost of sales.

Based on the Company's specialty distribution model where it sells to only 12 specialty pharmacies, Kaiser and the VA (through a specialty distributor), the inventory and prescription data it receives from these distributors, and returns experience of other specialty products with similar selling models, the Company has been able to make a reasonable estimate for product returns. At September 30, 2011, inventory levels at the specialty pharmacies (excluding Kaiser and the specialty distributor to the VA) represented approximately two weeks of their anticipated usage. The Company will accept returns of Ampyra for two months prior to and six months after the product expiration date. The Company will provide a credit for such returns to customers with whom we have a direct relationship. Once product is prescribed, it cannot be returned. The Company does not exchange product from inventory for the returned product.

Zanaflex
 
The Company applies the revenue recognition guidance in Accounting Standards Codification (ASC) 605-15-25, which among other criteria requires that future returns can be reasonably estimated in order to recognize revenue. The amount of future tablet returns is uncertain due to generic competition and customer conversion to Zanaflex Capsules. The Company has accumulated some sales history with Zanaflex Capsules; however, due to existing and potential generic competition and customer conversion from Zanaflex tablets to Zanaflex Capsules, we do not believe we can reasonably determine a return rate at this time. As a result, the Company accounts for these product shipments using a deferred revenue recognition model. Under the deferred revenue model, the Company does not recognize revenue upon product shipment. For these product shipments, the Company invoices the wholesaler, records deferred revenue at gross invoice sales price, and classifies the cost basis of the product held by the wholesaler as a component of inventory. The Company recognizes revenue when prescribed to the end-user, on a first-in first-out (FIFO) basis. The Company's revenue to be recognized is based on (1) the estimated prescription demand, based on pharmacy sales for its products; and (2) the Company's analysis of third-party information, including third-party market research data. The Company's estimates are subject to the inherent limitations of estimates that rely on third-party data, as certain third-party information is itself in the form of estimates, and reflect other limitations. The Company's sales and revenue recognition reflects the Company's estimates of actual product prescribed to the end-user. The Company expects to be able to apply a more traditional revenue recognition policy such that revenue is recognized following shipment to the customer when it believes it has sufficient data to develop reasonable estimates of expected returns based upon historical returns and greater certainty regarding generic competition.
 
The Company's net revenues represent total revenues less allowances for customer credits, including estimated discounts, rebates, and chargebacks. These allowances are recorded for cash consideration given by a vendor to a customer that is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, should be characterized as a reduction of revenue when recognized in the vendor's statement of operations. Adjustments are recorded for estimated chargebacks, rebates, and discounts. These allowances are established by management as its best estimate based on available information and are adjusted to reflect known changes in the factors that impact such allowances. Allowances for chargebacks, rebates and discounts are established based on the contractual terms with customers, analysis of historical levels of discounts, chargebacks and rebates, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for each product and anticipated introduction of competitive products. In addition, the Company records a charge to cost of goods sold for the cost basis of the estimated product returns the Company believes may ultimately be realized at the time of product shipment to wholesalers. The Company has recognized this charge at the date of shipment since it is probable that it will receive a level of returned products; upon the return of such product it will be unable to resell the product considering its expiration dating; and it can reasonably estimate a range of returns. This charge represents the cost basis for the low end of the range of the Company's estimated returns. Product shipping and handling costs are included in cost of sales.
 
Milestones and royalties

In order to determine the revenue recognition for contingent milestones, the Company evaluates the contingent milestones using the criteria as provided by the Financial Accounting Standards Boards (FASB) guidance on the milestone method of revenue recognition. At the inception of a collaboration agreement the Company evaluates if payments are substantive.  The criteria requires that (i) the Company determines if the milestone is commensurate with either its performance to achieve the milestone or the enhancement of value resulting from the Company's activities to achieve the milestone, (ii) the milestone be related to past performance, and (iii) the milestone be reasonable relative to all deliverable and payment terms of the collaboration arrangement.  If these criteria are met then the contingent milestones can be considered as substantive milestones and will be recognized as revenue in the period that the milestone is achieved. Royalties are recognized as earned in accordance with the terms of various research and collaboration agreements.
Collaborations
 
The Company recognizes collaboration revenues and expenses by analyzing each element of the agreement to determine if it shall be accounted for as a separate element or single unit of accounting. If an element shall be treated separately for revenue recognition purposes, the revenue recognition principles most appropriate for that element are applied to determine when revenue shall be recognized. If an element shall not be treated separately for revenue recognition purposes, the revenue recognition principles most appropriate for the bundled group of elements are applied to determine when revenue shall be recognized. Payments received in excess of revenues recognized are recorded as deferred revenue until such time as the revenue recognition criteria have been met.
Ampyra Inventory
 
Prior to regulatory approval of Ampyra in the three-month period ended March 31, 2010, the Company incurred expenses for the manufacture of bulk, unpackaged product of Ampyra that ultimately became available to support the commercial launch of this drug candidate. Until the necessary initial regulatory approval was received, we charged all such amounts to research and development expenses as there was no alternative future use prior to regulatory approval. As a result, our initial sales of Ampyra resulted in higher gross margins than if the inventory costs had not previously been expensed. Upon regulatory approval of Ampyra, the Company began capitalizing the commercial inventory costs associated with manufacturing with Alkermes plc (Alkermes), formerly Elan Corporation, plc (Elan), and its second manufacturer, Patheon. During the third quarter of 2011, Alkermes acquired the Elan business that supplies our Ampyra inventory.
Concentration of Risk
 
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments in cash and cash equivalents, restricted cash and accounts receivable. The Company maintains cash and cash equivalents and restricted cash with approved financial institutions. The Company is exposed to credit risks and liquidity risks in the event of default by the financial institutions or issuers of investments in excess of FDIC insured limits. The Company performs periodic evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any institution.
Segment Information
 
The Company is managed and operated as one business. 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. Accordingly, the Company does not prepare discrete financial information with respect to separate products or product candidates or by location and does not have separately reportable segments.
Reclassification
 
Certain prior period amounts have been reclassified to conform to current year presentation.
Recent Accounting Pronouncements
 
In June 2011, the FASB issued an accounting standards update regarding the presentation of comprehensive income in financial statements. The provisions of this standard provide an option to present the components of net income and other comprehensive income either as one continuous statement of comprehensive income or as two separate but consecutive statements. The provisions of this new disclosure standard are effective January 1, 2012.  The Company does not believe this accounting standard update will have a material effect on its financial statements.
Share-based Compensation (Tables)
The following table summarizes share-based compensation expense included within the consolidated statements of operations:
 
   
For the three-month
 
For the nine-month
   
period ended September 30,
 
period ended September 30,
(In millions)
 
2011
 
2010
 
2011
 
2010
                         
Research and development
 
$
            1.5
 
$
            1.4
 
$
            4.1
 
$
           3.6
Selling, general and administrative
   
            3.5
   
            3.4
   
            9.7
   
           8.9
 Total
 
$
           5.0
 
$
           4.8
 
$
 13.8
 
$
12.5
A summary of share-based compensation activity for the nine-month period ended September 30, 2011 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, 2011
  4,084  $20.13       
Granted
  1,132   23.72       
Cancelled
  (127)  25.95       
Exercised
  (320)  11.94       
Balance at September 30, 2011
  4,769  $21.38   6.9  $13,589 
Vested and expected to vest at September 30, 2011
  4,677  $21.29   6.9  $13,589 
Vested and exercisable at September 30, 2011
  2,795  $17.94   5.7  $13,570 
Restricted Stock Activity
 
(In thousands)
Restricted Stock
Number of Shares
Nonvested at January 1, 2011
324
Granted
276
Vested
(22)
Forfeited
(19)
Nonvested at September 30, 2011
559
Earnings Per Share (Tables)
Computation of basic and diluted earnings per share
The following table sets forth the computation of basic and diluted earnings per share for the three and nine-month periods ended September 30, 2011 and 2010:
 
(In thousands, except per share data)
 
Three-month
period ended
September 30,
2011
  
Three-month
period ended
September 30,
2010
  
Nine-month
period ended
September 30,
2011
  
Nine-month
period ended
September 30,
2010
 
Basic and diluted
            
Net income (loss)
 $18,867  $12,438  $17,911  $(15,440)
Weighted average common shares outstanding used in computing net loss per share-basic
  39,100   38,450   38,940   38,261 
Plus: net effect of dilutive stock options and restricted common shares
  1,074   1,538   1,095   - 
Weighted average common shares outstanding used in computing net loss per share-diluted
  40,174   39,988   40,035   38,261 
Net loss per share-basic
 $0.48  $0.32  $0.46  $(0.40)
Net loss per share-diluted
 $0.47  $0.31  $0.45  $(0.40)
Fair Value Measurements (Tables)
The following table presents information about the Company's assets and liabilities measured at fair value on a recurring basis as of September 30, 2011 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 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 and investments in a Treasury money market fund and high-quality government bonds. The Company's Level 3 liability represents our put/call liability related to the Paul Royalty Fund (PRF) transaction. No changes in valuation techniques or inputs occurred during the three months ended September 30, 2011. No transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy occurred during the nine-month period ended September 30, 2011.
 
(In thousands)
 
Level 1
  
Level 2
  
Level 3
 
Assets Carried at Fair Value:
         
Cash equivalents
 $44,385  $-  $- 
Short-term investments
  224,428   -   - 
Liabilities Carried at Fair Value:
            
Put/call liability
  -   -   1,457 
The following table presents additional information about assets and/or liabilities measured at fair value on a recurring basis and for which the Company utilizes Level 3 inputs to determine fair value.
 
(In thousands)
 
Balance as of
December 31, 2010
  
Realized (gains)
losses included
in net loss
  
Unrealized
(gains) losses included
in other
comprehensive
loss
  
Balance as of
September 30, 2011
 
Liabilities Carried at Fair Value:
            
Put/call liability
 $391  $1,066  $-  $1,457 
Short-Term Investments (Tables)
Short-Term Investments
The Company has determined that all of its short-term investments are classified as available-for-sale. Available-for-sale securities are carried at fair value with interest on these securities included in interest income and are recorded based primarily on quoted market prices. Available-for-sale securities consisted of the following:
 
(In thousands)
 
Amortized
Cost
  
Gross
unrealized
gains
  
Gross
unrealized
losses
  
Estimated
fair
value
 
September 30, 2011
            
US Treasury bonds
 $224,358  $88  $(18) $224,428 
December 31, 2010
                
US Treasury bonds
  205,402   5   (18)  205,389 
Intangible Assets (Tables)
Intangible assets consisted of the following:
 
(In thousands)
 
September 30, 2011
  
December 31,
2010
 
Estimated
remaining
useful lives as of
September 30, 2011
Zanaflex Capsule patents
 $19,350  $19,350 
0 years
Zanaflex trade name
  2,150   2,150 
0 years
Ampyra milestones
  3,250   3,250 
15 years
CSRO royalty buyout
  3,000   3,000 
 9 years
Website development costs 
  3,058   2,975 
0-3 years
Website development costs-in process 
  781   - 
3 years
    31,589   30,725  
Less accumulated amortization
  24,536   9,389  
   $7,053  $21,336  
Estimated future amortization expense for intangible assets subsequent to December 31, 2010 for the next five years is as follows (in thousands):
 
2011 (Note 1)
 $15,661 
2012
  1,394 
2013
  1,155 
2014
  491 
2015
  473 
   $19,174 
 
Note 1: Includes $13.0 million for Zanaflex Capsule intangible asset impairment recorded during the three-month period ended September 30, 2011.
Share-based Compensation (Details) (USD $)
Share data in Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2011
2010
2011
2010
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
 
Share-based compensation expense
$ 5,100,000 
$ 4,800,000 
$ 13,847,000 
$ 12,557,000 
Weighted average fair value per share of options granted to employees (in dollars per share)
$ 13.61 
$ 19.75 
$ 13.11 
$ 19.37 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Share based compensation expense
5,000,000 
4,800,000 
13,800,000 
12,500,000 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Intrinsic value at end of period
13,589,000 
 
13,589,000 
 
Intrinsic value vested and expected to vest at end of period
13,589,000 
 
13,589,000 
 
Intrinsic value vested and exercisable at end of period
13,570,000 
 
13,570,000 
 
Research and development [Member]
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Share based compensation expense
1,500,000 
1,400,000 
4,100,000 
3,600,000 
Selling, general and administrative [Member]
 
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
 
Share based compensation expense
3,500,000 
3,400,000 
9,700,000 
8,900,000 
Stock Options [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Beginning balance (in shares)
 
 
4,084 
 
Granted (in shares)
 
 
1,132 
 
Cancelled (in shares)
 
 
(127)
 
Exercised (in shares)
 
 
(320)
 
Ending balance (in shares)
4,769 
 
4,769 
 
Vested and expected to vest at end of period (in shares)
4,677 
 
4,677 
 
Vested and exercisable at end of period (in shares)
2,795 
 
2,795 
 
Beginning balance (in dollars per share)
 
 
$ 20.13 
 
Granted (in dollars per share)
$ 23.72 
 
$ 23.72 
 
Cancelled (in dollars per share)
$ 25.95 
 
$ 25.95 
 
Exercised (in dollars per share)
$ 11.94 
 
$ 11.94 
 
Ending balance (in dollars per share)
$ 21.38 
 
$ 21.38 
 
Vested and expected to vest at end of period (in dollars per share)
$ 21.29 
 
$ 21.29 
 
Vested and exercisable at end of period (in dollars per share)
$ 17.94 
 
$ 17.94 
 
Weigted average remaing contractual terms (in years)
 
 
6.9 
 
Vested and expected to vest at end of period (in years)
 
 
6.9 
 
Vested and exercisable at end of period (in years)
 
 
5.7 
 
Restricted Stock [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Nonvested at beginning or period (in shares)
 
 
324 
 
Granted (in shares)
 
 
276 
 
Vested (in shares)
 
 
(22)
 
Forfeited (in shares)
 
 
(19)
 
Nonvested at end of period (in shares)
559 
 
559 
 
Restricted Stock and Stock Options [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Total unrecognized compensation costs related to unvested options and restricted stock awards that the Company expects to recognize
$ 36,700,000 
 
$ 36,700,000 
 
Weighted average period of recognition of unrecognized compensation costs related to unvested options and restricted stock awards (in years)
 
 
2.5 
 
Earnings Per Share (Details) (USD $)
In Thousands, except Share data
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2011
2010
2011
2010
Earnings Per Share [Abstract]
 
 
 
 
Net income (loss)
$ 18,867 
$ 12,438 
$ 17,911 
$ (15,440)
Weighted average common shares outstanding used in computing net loss per share-basic (in shares)
39,100 
38,450 
38,940 
38,261 
Plus: net effect of dilutive stock options and restricted common shares (in shares)
1,074 
1,538 
1,095 
Weighted average common shares outstanding used in computing net loss per share-diluted (in shares)
40,174 
39,988 
40,035 
38,261 
Net loss per share-basic (in dollars per share)
$ 0.48 
$ 0.32 
$ 0.46 
$ (0.40)
Net loss per share-diluted (in dollars per share)
$ 0.47 
$ 0.31 
$ 0.45 
$ (0.40)
Stock Options [Member]
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Securities excluded from the actual calculation of diluted earnings per share as their effect would have been anti-dilutive
 
 
 
4,098,364 
Restricted Stock [Member]
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Securities excluded from the actual calculation of diluted earnings per share as their effect would have been anti-dilutive
 
 
 
515,769 
Income Taxes (Details) (USD $)
In Millions
9 Months Ended
Sep. 30, 2011
Dec. 31, 2010
Tax Credit Carryforward [Line Items]
 
 
Deferred tax asset
$ 148.7 
$ 153.8 
Internal Revenue Service (IRS) [Member]
 
 
Operating Loss Carryforwards [Line Items]
 
 
Net operating loss (NOL) carry-forwards
234.0 
266.9 
Net operating loss (NOL) carry-forwards, expiration dates
between 2021 and 2030 
 
State and Local Jurisdiction [Member]
 
 
Operating Loss Carryforwards [Line Items]
 
 
Net operating loss (NOL) carry-forwards
223.1 
261.0 
Net operating loss (NOL) carry-forwards, expiration dates
between 2012 and 2030 
 
Research [Member]
 
 
Tax Credit Carryforward [Line Items]
 
 
Research and development tax credit carry-forwards
3.9 
 
Tax credit carry-forwards, expiration dates
beginning in 2019 
 
Alternative Minimum Tax [Member]
 
 
Tax Credit Carryforward [Line Items]
 
 
Alternative Minimum Tax credit carry-forwards
$ 1.0 
 
Fair Value Measurements (Details) (USD $)
In Thousands
9 Months Ended
Sep. 30, 2011
Fair Value, Inputs, Level 1 [Member] |
Fair Value, Measurements, Recurring [Member]
 
Assets Carried at Fair Value:
 
Cash equivalents
$ 44,385 
Short-term investments
224,428 
Liabilities Carried at Fair Value:
 
Put/call liability
Fair Value, Inputs, Level 2 [Member] |
Fair Value, Measurements, Recurring [Member]
 
Assets Carried at Fair Value:
 
Cash equivalents
Short-term investments
Liabilities Carried at Fair Value:
 
Put/call liability
Fair Value, Inputs, Level 3 [Member] |
Fair Value, Measurements, Recurring [Member]
 
Assets Carried at Fair Value:
 
Cash equivalents
Short-term investments
Liabilities Carried at Fair Value:
 
Put/call liability
1,457 
Put/call liability [Member]
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
Beginning Balance
391 
Realized (gains) losses included in net loss
1,066 
Unrealized (gains) losses included in other comprehensive loss
Ending balance
$ 1,457 
Short-Term Investments (Details) (USD $)
9 Months Ended
Sep. 30, 2011
12 Months Ended
Dec. 31, 2010
Schedule of Available-for-sale Securities [Line Items]
 
 
Short-term investments with maturity of three months or less from date of purchase classified as cash equivalents
$ 34,800,000 
$ 23,500,000 
US Treasury Securities [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
224,358,000 
205,402,000 
Gross unrealized gains
88,000 
5,000 
Gross unrealized losses
(18,000)
(18,000)
Estimated fair value
$ 224,428,000 
$ 205,389,000 
Contractual maturities of available-for-sale debt securities, maximum (in years)
1Y 
1Y 
Biogen Collaboration Agreement (Details) (USD $)
3 Months Ended
Sep. 30, 2011
3 Months Ended
Mar. 31, 2011
3 Months Ended
Sep. 30, 2010
9 Months Ended
Sep. 30, 2011
Jul. 7, 2009
Jul. 1, 2009
Jun. 30, 2009
Biogen Collaboration Agreement [Abstract]
 
 
 
 
 
 
 
Deferred license revenue
 
 
 
 
 
 
$ 110,000,000 
Deferred cost of license revenue
 
 
 
 
 
 
7,700,000 
License revenue recognized during period
2,300,000 
 
 
6,800,000 
 
 
 
Cost of license revenue recognized during period
159,000 
 
 
476,000 
 
 
 
Prospective basis change in license amortization period (in months)
 
5M 
 
 
 
 
 
Current estimate of license revenue recognition period (in years)
 
 
12Y 
 
 
 
 
Milestone payment for successful license of product in the European Union
 
 
 
25,000,000 
 
 
 
Payment received on deferred license collaboration agreement
 
 
 
 
 
110,000,000 
 
Payment made to third party for cost of license
 
 
 
 
7,700,000 
 
 
Percentage of milestone payments to third party for successful licensing of product (in hundredths)
7.00% 
 
 
 
 
 
 
Milestone payments to third party for successful licensing of product
 
 
 
1,800,000 
 
 
 
Potential future regulatory milestone revenue
 
 
 
10,000,000 
 
 
 
Potential future sales milestone revenue
 
 
 
$ 365,000,000 
 
 
 
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 30, 2011
Sep. 30, 2011
Commitments and Contingencies [Abstract]
 
 
Life of lease (in years)
 
15Y 
Square footage of laboratory and office space leased (in square feet)
 
138,000 
Number of optional term extensions
 
Length of additional terms (in years)
 
5Y 
Option to terminate the lease with an early termination fee (in years)
 
10Y 
Rights to lease additional square footage (in square feet)
 
120,000 
Base rent per year
 
$ 3.4 
Annual increase in lease payments (in hundredths)
 
2.50% 
Payment to licensed worldwide development and commercialization rights to a proprietary magnesium formulation
 
Additional possible milestone payments for licensing.
 
$ 32 
Intangible Assets (Details) (USD $)
9 Months Ended
Sep. 30,
3 Months Ended
Sep. 30, 2011
3 Months Ended
Jun. 30, 2011
3 Months Ended
Mar. 31, 2010
2011
2010
12 Months Ended
Dec. 31, 2010
Dec. 31, 2009
Jul. 31, 2004
Intangible Assets [Abstract]
 
 
 
 
 
 
 
 
Zanaflex Capsules and Zanaflex tablets sales, marketing and distribution rights acquired
 
 
 
 
 
 
 
$ 2,000,000 
Zanaflex Capsules and Zanaflex tablets finished goods inventory acquired
 
 
 
 
 
 
 
675,000 
Zanaflex Capsules and Zanaflex tablets future contingent milestone payments
 
 
 
 
 
 
 
19,500,000 
Milestone payments made related to future contingent milestone payments related to revenues of Zanaflex Capsules and Zanaflex tablets
 
 
 
 
 
 
19,500,000 
 
Number of patents acquired relating to Zanaflex Capsules
 
 
 
 
 
 
 
Number of patent applications acquired relating to Zanaflex Capsules
 
 
 
 
 
 
 
Number of milestone payments for Ampyra
 
 
 
 
 
 
 
Ampyra milestone payment to Elan
 
 
2,500,000 
 
 
 
 
 
Ampyra milestone payment to Rush-Presbyterian St. Luke's Medical Center
 
 
750,000 
 
 
 
 
 
Total amount of Ampyra milestone payments made
 
 
3,250,000 
 
 
 
 
 
Milestone payments to be paid for Dalfampridine
 
 
 
 
 
850,000 
 
 
Aggregate milestone payments made to Rush under this agreement
 
 
 
 
 
850,000 
 
 
Total accrued Ampyra royalty payments
 
 
 
5,700,000 
 
 
 
 
Amount paid to purchase CRSO's rights to royalty payments
 
3,000,000 
 
 
 
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
Intangible asset amount
31,589,000 
 
 
31,589,000 
 
30,725,000 
 
 
Accumulated amortization
24,536,000 
 
 
24,536,000 
 
9,389,000 
 
 
Intangible assets, net of accumulated amotization
7,053,000 
 
 
7,053,000 
 
21,336,000 
 
 
Amortization expense
 
 
 
15,100,000 
2,000,000 
 
 
 
Estimated Future Amortization Expense [Abstract]
 
 
 
 
 
 
 
 
2011
 
 
 
 
 
15,661,000 1
 
 
2012
 
 
 
 
 
1,394,000 
 
 
2013
 
 
 
 
 
1,155,000 
 
 
2014
 
 
 
 
 
491,000 
 
 
2015
 
 
 
 
 
473,000 
 
 
Total
 
 
 
 
 
19,174,000 
 
 
Recorded impairment charge
13,038,000 
 
 
13,038,000 
 
 
 
Zanaflex Capsule patents [Member]
 
 
 
 
 
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
Intangible asset amount
19,350,000 
 
 
19,350,000 
 
19,350,000 
 
 
Estimated remaining useful lives (in years)
 
 
 
 
 
 
 
Zanaflex trade name [Member]
 
 
 
 
 
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
Intangible asset amount
2,150,000 
 
 
2,150,000 
 
2,150,000 
 
 
Estimated remaining useful lives (in years)
 
 
 
 
 
 
 
Ampyra milestones [Member]
 
 
 
 
 
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
Intangible asset amount
3,250,000 
 
 
3,250,000 
 
3,250,000 
 
 
Estimated remaining useful lives (in years)
 
 
 
15 
 
 
 
 
CSRO royalty buyout [Member]
 
 
 
 
 
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
Intangible asset amount
3,000,000 
 
 
3,000,000 
 
3,000,000 
 
 
Estimated remaining useful lives (in years)
 
 
 
 
 
 
 
Website development costs [Member]
 
 
 
 
 
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
Intangible asset amount
3,058,000 
 
 
3,058,000 
 
2,975,000 
 
 
Estimated remaining useful lives (in years) Minimum
 
 
 
 
 
 
 
Estimated remaining useful lives (in years) Maximum
 
 
 
 
 
 
 
Website development costs-in-process [Member]
 
 
 
 
 
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
 
 
 
Intangible asset amount
$ 781,000 
 
 
$ 781,000 
 
$ 0 
 
 
Estimated remaining useful lives (in years)