Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2019	Feb. 20, 2020	Jun. 28, 2019
Cover [Abstract]
Entity Registrant Name	ACORDA THERAPEUTICS, INC.
Entity Central Index Key	0001008848
Document Type	10-K
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Public Float			$ 362,821,066
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Annual Report	true
Document Transition Report	false
Entity Common Stock, Shares Outstanding		47,997,023
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity File Number	001-31938
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-3831168
Entity Address, Address Line One	420 Saw Mill River Road
Entity Address, City or Town	Ardsley
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10502
City Area Code	914
Local Phone Number	347-4300
Title of each class	Common Stock $0.001 par value
Trading Symbol	ACOR
Name of each exchange on which registered	NASDAQ
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE The registrant intends to file a proxy statement for its 2020 Annual Meeting of Stockholders pursuant to Regulation 14A within 120 days of the end of the fiscal year ended December 31, 2019. Portions of the proxy statement are incorporated herein by reference into the following parts of the Form 10-K: Part III, Item 10, Directors, Executive Officers and Corporate Governance. Part III, Item 11, Executive Compensation. Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Part III, Item 13, Certain Relationships and Related Transactions, and Director Independence. Part III, Item 14, Principal Accounting Fees and Services.

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 62,085	$ 293,564
Restricted cash	12,836	532
Short term investments	63,754	151,989
Trade accounts receivable, net of allowances of $682 and $2,681, as of December 31, 2019 and 2018, respectively	22,083	23,430
Prepaid expenses	11,574	19,384
Inventory, net	25,221	29,014
Other current assets	3,560	10,194
Total current assets	201,113	528,107
Property and equipment, net of accumulated depreciation	142,527	60,519
Goodwill		282,059
Intangible assets, net of accumulated amortization	402,329	428,570
Right of use asset, net of accumulated amortization	23,450
Restricted cash	30,270	255
Other assets	29	156
Total assets	799,718	1,299,666
Current liabilities:
Accounts payable	26,257	48,859
Accrued expenses and other current liabilities	39,077	76,882
Current portion of loans payable	603	616
Current portion of liability related to sale of future royalties	10,836	8,985
Current portion of lease liability	7,746
Current portion of acquired contingent consideration	1,866	4,914
Total current liabilities	86,385	140,256
Convertible senior notes	192,774	318,670
Derivative liability	59,409
Non-current portion of acquired contingent consideration	78,434	163,086
Non-current portion of loans payable	25,495	24,470
Deferred tax liability	9,581	7,483
Non-current portion of liability related to sale of future royalties	13,565	21,731
Non-current portion of lease liability	22,996
Other non-current liabilities	259	11,987
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value. Authorized 1,000,000 shares at December 31, 2019 and December 31, 2018; no shares issued as of December 31, 2019 and December 31, 2018
Common stock, $0.001 par value. Authorized 80,000,000 shares at December 31, 2019 and 2018; issued 47,730,396 and 47,508,505 shares, including those held in treasury, as of December 31, 2019 and 2018, respectively	48	48
Treasury stock at cost (29,304 and 87,737 shares at December 31, 2019 and 2018, respectively)	(638)	(2,133)
Additional paid-in capital	979,388	1,005,105
Accumulated deficit	(666,809)	(393,843)
Accumulated other comprehensive (loss) income	(1,169)	2,806
Total stockholders’ equity	310,820	611,983
Total liabilities and stockholders’ equity	$ 799,718	$ 1,299,666

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Trade accounts receivable, allowances (in dollars)	$ 682	$ 2,681
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, Authorized shares	1,000,000	1,000,000
Preferred stock, issued shares	0	0
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	47,730,396	47,508,505
Treasury stock, shares	29,304	87,737

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenues:
Total net revenues	$ 192,408	$ 471,433	$ 588,287
Costs and expenses:
Cost of sales	34,849	97,640	111,322
Cost of milestone and license revenue			634
Research and development	60,083	106,383	166,105
Selling, general and administrative	192,846	172,254	181,619
Goodwill and intangible asset impairments	277,561		296,763
Amortization of intangible assets	25,636	1,670	23,758
Changes in fair value of acquired contingent consideration	(86,935)	55,000	40,900
Total operating expenses	504,040	432,947	821,101
Operating (loss) income	(311,632)	38,486	(232,814)
Other (income) expense, net:
Interest and amortization of debt discount expense	(21,872)	(21,597)	(18,664)
Interest income	4,170	3,518	136
Other income (expense)	13	16	(543)
Gain on debt extinguishment	55,073
Total other (income) expense, net	37,384	(18,063)	(19,071)
(Loss) income before taxes	(274,248)	20,423	(251,885)
Benefit from income taxes	1,282	13,259	28,526
Net (loss) income	$ (272,966)	$ 33,682	$ (223,359)
Net (loss) income per share—basic	$ (5.75)	$ 0.72	$ (4.86)
Net (loss) income per share—diluted	$ (5.75)	$ 0.71	$ (4.86)
Weighted average common shares outstanding used in computing net (loss) income per share—basic	47,512	47,010	45,999
Weighted average common shares outstanding used in computing net (loss) income per share—diluted	47,512	47,341	45,999
Net Product Revenues
Revenues:
Total net revenues	$ 180,736	$ 459,739	$ 549,749
Royalty Revenues
Revenues:
Total net revenues	$ 11,672	$ 11,694	29,481
License Revenue
Revenues:
Total net revenues			$ 9,057

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net (loss) income	$ (272,966)	$ 33,682	$ (223,359)
Other comprehensive (loss) income:
Foreign currency translation adjustment	(4,118)	(3,927)	19,759
Unrealized gains (losses) on available-for-sale securities, net of tax	143	(125)
Other comprehensive (loss) income, net of tax	(3,975)	(4,052)	19,759
Comprehensive (loss) income	$ (276,941)	$ 29,630	$ (203,600)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common stock	Treasury stock	Additional paid-in capital	Accumulated deficit	Accumulated other comprehensive income (loss)
Balance at Dec. 31, 2016	$ 664,211	$ 46	$ (329)	$ 921,365	$ (243,970)	$ (12,901)
Balance (in shares) at Dec. 31, 2016		45,680
Increase (Decrease) in Stockholders' Equity
Adjustment to accumulated deficit (pursuant to adoption of ASU) \| ASU 2014-09	12,221				12,221
Compensation expense for issuance of stock options to employees	24,910			24,910
Compensation expense for issuance of restricted stock to employees	7,904			7,904
Compensation expense for issuance of restricted stock to employees (in shares)		263
Exercise of stock options	10,479			10,479
Exercise of stock options (in shares)		498
Restructuring Cost pursuant to equity modification	967			967
Purchase of Treasury Stock	(60)		(60)
Purchase of noncontrolling interest	2,955			2,955
Other comprehensive (loss) income, net of tax	19,759					19,759
Net (loss) income	(223,359)				(223,359)
Balance at Dec. 31, 2017	519,987	$ 46	(389)	968,580	(455,108)	6,858
Balance (in shares) at Dec. 31, 2017		46,441
Increase (Decrease) in Stockholders' Equity
Adjustment to accumulated deficit (pursuant to adoption of ASU) \| ASU 2016-09	27,583				27,583
Compensation expense for issuance of stock options to employees	15,182			15,182
Compensation expense for issuance of restricted stock to employees	6,147			6,147
Compensation expense for issuance of restricted stock to employees (in shares)		306
Exercise of stock options	15,198	$ 2		15,196
Exercise of stock options (in shares)		689
Purchase of Treasury Stock	(1,744)		(1,744)
Purchase of Treasury Stock ,Shares		72
Other comprehensive (loss) income, net of tax	(4,052)					(4,052)
Net (loss) income	33,682				33,682
Balance at Dec. 31, 2018	611,984	$ 48	(2,133)	1,005,105	(393,843)	2,806
Balance (in shares) at Dec. 31, 2018		47,508
Increase (Decrease) in Stockholders' Equity
Compensation expense for issuance of stock options to employees	9,923			9,923
Compensation expense for issuance of restricted stock to employees	4,327			4,327
Compensation expense for issuance of restricted stock to employees (in shares)		278
Exercise of stock options	$ 24			24
Exercise of stock options (in shares)	2	2
Purchase of Treasury Stock	$ (93)		1,495	(1,587)
Purchase of Treasury Stock ,Shares		(58)
Equity component of convertible notes exchange	(38,404)			(38,404)
Other comprehensive (loss) income, net of tax	(3,975)					(3,975)
Net (loss) income	(272,966)				(272,966)
Balance at Dec. 31, 2019	$ 310,820	$ 48	$ (638)	$ 979,388	$ (666,809)	$ (1,169)
Balance (in shares) at Dec. 31, 2019		47,730

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net (loss) income	$ (272,966)	$ 33,682	$ (223,359)
Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities:
Share-based compensation expense	14,250	21,252	32,814
Amortization of net premiums and discounts on investments	(1,647)	(1,417)
Amortization of debt discount and debt issuance costs	15,724	15,822	12,153
Depreciation and amortization expense	34,573	11,479	23,234
Gain on debt extinguishment	(55,073)
Goodwill and intangible asset impairments	277,561		296,763
Change in contingent consideration obligation	(86,935)	55,000	40,622
Realized gain on foreign currency transaction			247
Non-cash royalty revenue	(10,271)	(10,291)	(2,705)
Deferred tax benefit	(1,978)	(14,505)	(54,044)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable	1,347	57,972	(29,112)
Decrease (increase) in prepaid expenses and other current assets	14,439	(15,402)	3,445
Decrease in inventory	3,793	8,440	5,505
Decrease in non-current portion of deferred cost of license revenue			634
Decrease in other assets	11	34	4,138
Decrease in accounts payable, accrued expenses and other current liabilities	(60,564)	(3,488)	(2,099)
Decrease in non-current portion of deferred license revenue			(9,057)
(Decrease) increase in other non-current liabilities	(431)	52	1,491
Net cash (used) provided by operating activities	(128,167)	150,793	97,136
Cash flows from investing activities:
Purchases of property and equipment	(90,426)	(33,328)	(13,688)
Purchases of intangible assets		(587)	(688)
Purchases of investments	(226,587)	(249,107)
Proceeds from maturities of investments	316,508	98,273
Net cash used in investing activities	(505)	(176,865)	(10,713)
Cash flows from financing activities:
Payments on convertible senior notes exchange	(55,199)
Debt issuance costs	(4,670)	0	0
Proceeds from issuance of common stock and option exercises	24	15,198	10,479
Repayment of non-controlling interest			2,722
Purchase of treasury stock	(91)	(1,744)	(60)
Net proceeds from royalty monetizations			50,787
Repayment of loans payable	(614)	(657)	(2,409)
Net cash (used) provided by financing activities	(60,550)	12,797	61,519
Effect of exchange rate changes on cash and cash equivalents and restricted cash	62	(412)	1,225
Net (decrease) increase in cash and cash equivalents and restricted cash	(189,160)	(13,687)	149,167
Cash, cash equivalents and restricted cash at beginning of period	294,351	308,038	158,871
Cash, cash equivalents and restricted cash at end of period	105,191	294,351	308,038
Supplemental disclosure:
Non-cash debt issuance cost	490
Cash paid for interest	6,056	6,064	6,066
Cash paid for taxes	$ 2,791	20,709	14,929
Zanaflex
Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities:
Gain on sale of assets			(3,534)
Cash flows from investing activities:
Net proceeds from sale of assets			$ 3,663
Qutenza
Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities:
Gain on sale of assets		(7,837)
Cash flows from investing activities:
Net proceeds from sale of assets		$ 7,884

Organization and Business Activities

12 Months Ended

Dec. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Business Activities

(1) Organization and Business Activities

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

The management of the Company is responsible for the accompanying audited consolidated financial statements and the related information included in the notes to the consolidated financial statements.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

(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 (U.S.) 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 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 share‑based compensation accounting, which are largely dependent on the fair value of the Company’s equity securities, measurement of changes in the fair value of acquired contingent consideration which is based on a probability weighted discounted cash flow valuation methodology, estimated deductions to determine net revenue such as allowances for customer credits, including estimated discounts, rebates, and chargebacks, which are estimated based on available information that will be adjusted to reflect known changes in the factors that impact such allowances, estimates of derivative liability associated with the exchange of the new convertible senior secured notes due 2024, which is marked to market each quarter based on a Monte Carlo model approach, estimates of reserves for obsolete and excess inventory, and estimates of unrecognized tax benefits and valuation allowances on deferred tax assets which are based on an assessment of recoverability of the deferred tax assets against future taxable income. Actual results could differ from those estimates.

Risks and Uncertainties

The Company is subject to risks common to companies in the pharmaceutical industry including, but not limited to, uncertainties related to commercialization of products, regulatory approvals, dependence on key products, dependence on key customers and suppliers, and protection of intellectual property rights.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less from date of purchase to be cash equivalents. All cash and cash equivalents are held in highly rated securities including a Treasury money market fund which is unrestricted as to withdrawal or use. To date, the Company has not experienced any losses on its cash and cash equivalents. The carrying amount of cash and cash equivalents approximates its fair value due to its short-term and liquid nature. We maintain cash balances in excess of insured limits. We do not anticipate any losses with respect to such cash balances.

Restricted Cash

Restricted cash represents an escrow account with funds to maintain the interest payments for an amount equal to all remaining scheduled interest payments on the outstanding new convertible senior secured notes due 2024 through the interest

payment date of June 1, 2023; and a bank account with funds to cover the Company’s self-funded employee health insurance. At December 31, 2019, the Company also held $0.3 million of restricted cash related to cash collateralized standby letters of credit in connection with obligations under facility leases and $30.0 million related to the escrow account for interest payments included in restricted cash – non current in the consolidated balance sheet due to the long-term nature of the letters of credit and interest payments. (see Note 10).

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same amounts shown in the statement of cash flows:

	December 31, 2019				December 31, 2018				December 31, 2017
(In thousands)	Beginning of period		End of period		Beginning of period		End of period		Beginning of period		End of period
Cash and cash equivalents	$	293,564	$	62,085	$	307,068	$	293,564	$	158,537	$	307,068
Restricted cash		532		12,836		410		532		79		410
Restricted cash-non current		255		30,270		560		255		255		560
Total Cash, cash equivalents and restricted cash per statement of cash flows	$	294,351	$	105,191	$	308,038	$	294,351	$	158,871	$	308,038

Investments

Short-term investments consist primarily of high-grade commercial paper and corporate bonds. The Company classifies marketable securities available to fund current operations as short-term investments in current assets on its consolidated balance sheets. Marketable securities are classified as long-term investments in long-term assets on the consolidated balance sheets if the Company has the ability and intent to hold them and such holding period is longer than one year. The Company classifies all its investments as available-for-sale. Available-for-sale securities are recorded at the fair value of the investments based on quoted market prices.

Unrealized holding gains and losses on available-for-sale securities, which are determined to be temporary, are excluded from earnings and are reported as a separate component of accumulated other comprehensive loss.

Premiums and discounts on investments are amortized over the life of the related available-for-sale security as an adjustment to yield using the effective‑interest method. Dividend and interest income are recognized when earned. Amortized premiums and discounts, dividend and interest income are included in interest income. Realized gains and losses are included in other income.

Other Comprehensive Income (Loss)

The Company’s other comprehensive income (loss) consisted of unrealized gains and losses on available-for-sale securities and adjustments for foreign currency translation and is recorded and presented net of income tax. There was no income tax allocated to the foreign currency translation adjustment in Other Comprehensive Income (Loss) for the period ended December 31, 2019 and 2018. The cumulative foreign currency translation adjustment reported in Other Comprehensive Income (Loss) was $(4.1) million and $(3.9) million for the period ended December 31, 2019 and 2018, respectively.

Inventory

Inventory is stated at the lower of cost or net realizable value. The Company capitalizes inventory costs associated with the Company's products prior to regulatory approval when, based on management's judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Cost is determined using the first-in, first-out method (FIFO) for all inventories. The Company establishes reserves as necessary for obsolescence and excess inventory. The Company records a reserve for excess and obsolete inventory based on the expected future product sales volumes and the projected expiration of inventory and specifically identified obsolete inventory. The Company recorded a charge for excess and obsolete inventory of $0.0 million and $8.4 million for the years ended December 31, 2019 and 2018, respectively. Production costs related to idle capacity are not included in the cost of inventory but are charged directly to cost of sales in the period incurred. We recorded an idle

capacity charge to cost of goods sold of $0.7 million and $0.0 million for the years ended December 31, 2019 and 2018, respectively.

The following table provides the major classes of inventory:

(In thousands)	December 31, 2019		December 31, 2018
Raw materials	$	1,753	$	—
Work-in-progress		13,509		—
Finished goods		9,959		29,014
Total	$	25,221	$	29,014

Ampyra

The cost of Ampyra inventory manufactured by Alkermes plc (Alkermes) is based on agreed upon pricing with Alkermes. In the event Alkermes does not manufacture the products, Alkermes is entitled to a compensating payment for the quantities of product provided by Patheon, the Company’s alternative manufacturer. This compensating payment is included in the Company’s inventory balances.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation, except for assets acquired in a business combination, which are recorded at fair value as of the acquisition date. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which ranges from one to seven years. Leasehold improvements are recorded at cost, less accumulated amortization, which is computed on a straight-line basis over the shorter of the useful lives of the assets or the remaining lease term. Expenditures for maintenance and repairs are charged to expense as incurred. The Company capitalizes interest costs for assets under construction.

Goodwill

Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired in a business combination accounted for using the acquisition method of accounting. Goodwill is not amortized and is subject to impairment testing on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired. We perform our impairment testing at the reporting level where we have determined that we have a single reporting unit and operating segment. The impairment test for goodwill uses an approach which compares the estimated fair value of the reporting unit including goodwill to its carrying value. If the carrying value of the reporting unit exceeds the estimated fair value of the reporting unit, an impairment loss is recognized in an amount equal to the excess of the carrying value over the estimated fair value. The Company recorded an impairment charge of $277.6 million for the year ended December 31, 2019 in the statement of operations. See note 4 for a discussion of goodwill.

Intangible Assets

In Process Research and Development

The Company has indefinite lived intangible assets for the value of acquired in-process research and development. The cost of in-process research and development (IPR&D) acquired directly in a transaction other than a business combination is capitalized if the project will be further developed or have an alternative future use; otherwise it is expensed. The estimated fair value of IPR&D projects acquired in a business combination is capitalized. Several methods may be used to determine the estimated fair value of the IPR&D assets acquired in a business combination. The Company utilizes the "income method” which applies a probability weighting that considers the risk of development and commercialization to the estimated future net cash flows that are derived from projected sales revenues and estimated costs. These projections are based on factors such as relevant market size, patent protection, estimated pricing and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. These assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or impaired, as appropriate. These assets are tested at least annually or when a triggering event occurs that could indicate a potential impairment. Events that could result in an impairment, or trigger an interim impairment assessment, may include

actions by regulatory authorities with respect to us or our competitors, the receipt of additional clinical or nonclinical data regarding our drug candidate or a potentially competitive drug candidate, changes in the clinical development program for a drug candidate or new information regarding potential sales for the drug which could have a negative effect on cash flows and which could result in an impairment. If impairment indicators are present or changes in circumstance suggest that an impairment may exist, we perform an impairment analysis by comparing the sum of the estimated discounted future cash flows, or fair value, of each intangible asset to its carrying value on the consolidated balance sheet. We will recognize an impairment loss if the carrying value of the intangible asset exceeds its fair value.

Finite-Lived Intangible Assets

The Company has finite lived intangible assets that are amortized on a straight line basis over the period in which the Company expects to receive economic benefit and are reviewed for impairment when facts and circumstances indicate that the carrying value of the asset may not be recoverable. The determination of the expected life will be dependent upon the use and underlying characteristics of the intangible asset. In the Company’s evaluation of the intangible assets, it considers the term of the underlying asset life and the expected life of the related product line. If impairment indicators are present or changes in circumstance suggest that impairment may exist, the Company performs a recoverability test by comparing the sum of the estimated undiscounted cash flows of each intangible asset to its carrying value on the consolidated balance sheet. If the undiscounted cash flows used in the recoverability test are less than the carrying value, the Company would determine the fair value of the intangible asset and recognize an impairment loss in the statement of operations if the carrying value of the intangible asset exceeds its fair value. Fair value is generally estimated based on either appraised value or other valuation techniques. Events that could result in an impairment, or trigger an interim impairment assessment, may include actions by regulatory authorities with respect to us or our competitors, new or better products entering the market, changes in market share or market pricing, changes in the economic lives of the assets, changes in the legal framework covering patents, rights or licenses, and other market changes which could have a negative effect on cash flows and which could result in an impairment.

Contingent Consideration

The Company may record contingent consideration as part of the cost of business acquisitions. Contingent consideration is recognized at fair value as of the date of acquisition and recorded as a liability on the consolidated balance sheet. The contingent consideration is re-valued on a quarterly basis using a probability weighted discounted cash-flow approach until fulfillment or expiration of the contingency. Changes in the fair value of the contingent consideration are recognized in the statement of operations. See Note 16 for discussion on the Alkermes ARCUS agreement.

Impairment of Long-Lived Assets

The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful lives of its long-lived assets, including identifiable intangible assets subject to amortization and property plant and equipment, may warrant revision or that the carrying value of the assets may be impaired. The Company evaluates the realizability of its long-lived assets based on profitability and cash flow expectations for the related assets. Factors the Company considers important that could trigger an impairment review include significant changes in the use of any assets, changes in historical trends in operating performance, changes in projected operating performance, stock price, loss of a major customer and significant negative economic trends. The decline in the trading price of the Company's common stock during the quarter ended September 30, 2019, and related decrease in the Company's market capitalization, was determined to be a triggering event in connection with the Company's review of the recoverability of its long-lived assets for the year ended December 31, 2019. The Company performed a recoverability test during the third quarter of fiscal 2019 using the undiscounted cash flows, which are the sum of the future undiscounted cash flows expected to be derived from the direct use of the long-lived assets to the carrying value of the long-lived assets. Estimates of future cash flows were based on the Company’s own assumptions about its own use of the long-lived assets. The cash flow estimation period was based on the long-lived assets’ estimated remaining useful life to the Company. After performing the recoverability test, the Company determined that the undiscounted cash flows exceeded the carrying value and the long-lived assets were not impaired. Changes in these assumptions and resulting valuations could result in future long-lived asset impairment charges. Management will continue to monitor any changes in circumstances for indicators of impairment. Any write‑downs are treated as permanent reductions in the carrying amount of the assets.

Non-Cash Interest Expense on Liability Related to Sale of Future Royalties

As of October 1, 2017, the Company completed a royalty purchase agreement with HealthCare Royalty Partners, or HCRP (“Royalty Agreement”). In exchange for the payment of $40 million to the Company, HCRP obtained the right to receive Fampyra royalties payable by Biogen under the Collaboration and Licensing Agreement between the Company and Biogen, up to an agreed upon threshold of royalties. When this threshold is met, if ever, the Fampyra royalty revenue will revert back to the Company and the Company will continue to receive the Fampyra royalty revenue from Biogen until the revenue stream ends. The transaction does not include potential future milestones to be paid by Biogen to Acorda.

The Company maintained the rights under the license and collaboration agreement with Biogen, therefore, the Royalty Agreement has been accounted for as a liability that will be amortized using the effective interest method over the life of the arrangement, in accordance with the relevant accounting guidance. In order to determine the amortization of the liability, the Company is required to estimate the total amount of future net royalty payments to be made to HCRP over the term of the agreement up to the agreed upon threshold of royalties. The total threshold of net royalties to be paid, less the net proceeds received will be recorded as interest expense over the life of the liability. The Company imputes interest on the unamortized portion of the liability using the effective interest method and records interest expense based on the timing of the payments received over the term of the royalty agreement. The Company’s estimate of the interest rate under the arrangement is based on forecasted net royalty payments expected to be made to HCRP over the life of the royalty agreement. The Company estimated an effective annual interest rate of approximately 15%. Over the course of the Royalty Agreement, the actual interest rate will be affected by the amount and timing of net royalty revenue recognized and changes in forecasted revenue. On a quarterly basis, the Company will reassess the effective interest rate and adjust the rate prospectively as required. Non-cash royalty revenue is reflected as royalty revenue and non-cash interest expense is reflected as interest and amortization of debt discount expense in the Statement of Operations.

Patent Costs

Patent application and maintenance costs are expensed as incurred.

Research and Development

Research and development expenses include the costs associated with the Company’s internal research and development activities, including salaries and benefits, occupancy costs, and research and development conducted for it by third parties, such as contract research organizations (CROs), sponsored university-based research, clinical trials, contract manufacturing for its research and development programs, and regulatory expenses. In addition, research and development expenses include the cost of clinical trial drug supply shipped to the Company’s clinical study vendors. For those studies that the Company administers itself, the Company accounts for its clinical study costs by estimating the patient cost per visit in each clinical trial and recognizes this cost as visits occur, beginning when the patient enrolls in the trial. This estimated cost includes payments to the trial site and patient-related costs, including laboratory costs related to the conduct of the trial. Cost per patient varies based on the type of clinical trial, the site of the clinical trial, and the length of the treatment period for each patient. For those studies for which the Company uses a CRO, the Company accounts for its clinical study costs according to the terms of the CRO contract. These costs include upfront, milestone and monthly expenses as well as reimbursement for pass through costs. As actual costs become known to the Company, it adjusts the accrual; such changes in estimate may be a material change in its clinical study accrual, which could also materially affect its results of operations. All research and development costs are expensed as incurred except when accounting for nonrefundable advance payments for goods or services to be used in future research and development activities. These payments are capitalized at the time of payment and expensed ratably over the period the research and development activity is performed.

Accounting for Income Taxes

The Company provides for income taxes in accordance with ASC Topic 740 (ASC 740). Income taxes are accounted for under the asset and liability method with deferred tax assets and liabilities recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance for the amounts of any tax benefits which, more likely than not, will not be realized.

In determining whether a tax position is recognized for financial statement purposes, a two-step process is utilized whereby the threshold for recognition is a more likely-than-not test that the tax position will be sustained upon examination and the tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Revenue Recognition

On January 1, 2018, the Company adopted the new accounting standard ASC 606, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and the related amendments to all contracts with customers that were not completed as of the date of adoption using the modified retrospective method. ASC 606 supersedes prior revenue guidance under ASC 605 “Revenue Recognition” (“ASC 605”) and requires entities to recognize revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company completed its assessment of the new guidance and evaluated the new requirements as applied to its existing revenue contracts not completed as of the date of initial application. As a result of the assessment, with the exception of the changes to our recognition of license revenue as further described below, the Company determined that adoption of the new standard did not have a significant impact on its revenue recognition methodology. In accordance with ASC 606, the Company recognizes revenue when the customer obtains control of a promised good or service, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the good or service.

The Company determined that the revenue recognition methodology for the deferred license revenue changed as a result of the adoption of ASC 606. License revenue recorded by the Company prior to January 1, 2018 related exclusively to the recognition of the upfront payment received from Biogen upon the execution of the License and Collaboration agreement that granted Biogen an exclusive non sub-licensable license to sell Fampyra outside of the U.S. License revenue recorded prior to January 1, 2018 was recognized under ASC 605 on a pro rata basis as the Company’s obligations were satisfied throughout the duration of the license and collaboration agreement. As of January 1, 2018, the Company adopted ASC 606 which changed the Company’s determination of its distinct performance obligations resulting in an acceleration of the recognition of the revenue in the arrangement. The material performance obligations were completed prior to January 1, 2018, and as a result, the Company recognized its previously deferred license revenue and the associated deferred costs as a cumulative effect adjustment of $27.6 million within the accumulated deficit on the consolidated balance sheet as of January 1, 2018.

The cumulative effect of applying ASC 606 to the company’s consolidated balance sheet was as follows:

(In thousands)	Balance as of December 31, 2017			Net Adjustments			Balance as of January 1, 2018
Assets
Other current assets	$	1,983		$	(634	)	$	1,349
Non-current portion of deferred cost of license revenue		1,638			(1,638	)		—
Total Assets	$	1,197,969		$	(2,272	)	$	1,195,697

Liabilities and Stockholders’ Equity
Current portion of deferred license revenue	$	9,057		$	(9,057	)	$	—
Non-current portion of deferred license revenue		23,398			(23,398	)		—
Deferred tax liability		22,459			2,600			25,059
Accumulated deficit		(455,108	)		27,583			(427,525	)
Total liabilities and stockholders' equity	$	1,197,969		$	(2,272	)	$	1,195,697

The impact of the adoption of ASC 606 on the Company’s consolidated balance sheet as of December 31, 2018 was as follows:

(In thousands)	Balance as of December 31, 2018 Prior to Adoption of ASC 606			Net Adjustments			Balance as of December 31, 2018 as Reported Under ASC 606
Assets
Other current assets	$	10,828		$	(634	)	$	10,194
Non-current portion of deferred cost of license revenue		1,004			(1,004	)		—
Total Assets	$	1,301,304		$	(1,638	)	$	1,299,666

Liabilities and Stockholders’ Equity
Current portion of deferred license revenue	$	9,057		$	(9,057	)	$	—
Non-current portion of deferred license revenue		14,341			(14,341	)		—
Deferred tax liability		6,988			495			7,483
Accumulated deficit		(415,108	)		21,265			(393,843	)
Total liabilities and stockholders' equity	$	1,301,304		$	(1,638	)	$	1,299,666

The impact of the adoption of ASC 606 on the Company’s consolidated statement of operations for the year ended December 31, 2018 was as follows:

(In thousands)	Year Ended December 31, 2018 Balance Prior to Adoption of ASC 606			Effect of Change			Year Ended December 31, 2018 Balance as Reported Under ASC 606
License revenue	$	9,057		$	(9,057	)	$	—
Cost of license revenue		634			(634	)		—
Operating income (loss)	$	46,909		$	(8,423	)	$	38,486
(Benefit from) provision for income taxes		(15,364	)		2,105			(13,259	)
Net income (loss)	$	40,000		$	(6,318	)	$	33,682
Net income (loss) per share—basic	$	0.85		$	(0.13	)	$	0.72
Net income (loss) per share—diluted	$	0.84		$	(0.13	)	$	0.71

ASC 606 did not have an aggregate impact on the Company’s net cash provided by operating activities.

ASC 606 outlines a five-step process for recognizing revenue from contracts with customers: i) identify the contract with the customer, ii) identify the performance obligations in the contract, (iii) determine the transaction price, iv) allocate the transaction price to the separate performance obligations in the contract, and (v) recognize revenue associated with the performance obligations as they are satisfied.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606, the Company determines the performance obligations that are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to each respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon receipt of the product by the customer.

ASC 606 requires entities to record a contract asset when a performance obligation has been satisfied or partially satisfied, but the amount of consideration has not yet been received because the receipt of the consideration is conditioned on something other than the passage of time. ASC 606 also requires an entity to present a revenue contract as a contract liability

in instances when a customer pays consideration, or an entity has a right to an amount of consideration that is unconditional (e.g. receivable), before the entity transfers a good or service to the customer. We did not have any contract assets or liabilities as of December 31, 2019 and December 31, 2018.

Product Revenue, Net

Inbrija

Inbrija is available primarily through a network of specialty pharmacies, which deliver the medication to patients by mail, and ASD Specialty Healthcare, Inc. (an AmerisourceBergen affiliate).

Ampyra

Ampyra is distributed primarily through a network of specialty pharmacies, which deliver the medication to patients by mail.

Net revenue from product sales is recognized at the transaction price when the customer obtains control of the Company’s products, which occurs at a point in time, typically upon receipt of the product by the customer. The Company’s products are sold primarily to a network of specialty providers which are contractually obligated to hold no more than an agreed upon number of days of inventory. The Company’s payment terms are between 30 to 35 days.

The Company’s net revenues represent total revenues adjusted for discounts and allowances, including estimated cash discounts, chargebacks, rebates, returns, copay assistance, data fees and wholesaler fees for services. These adjustments represent variable consideration under ASC 606 and are recorded for the Company’s estimate of cash consideration expected to be given by the Company to a customer that is presumed to be a reduction of the transaction price of the Company’s products and, therefore, are characterized as a reduction of revenue. These adjustments 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. Adjustments for variable consideration are determined based on the contractual terms with customers, historical trends, 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.

Discounts and Allowances

Revenue from product sales are recorded at the transaction price, which includes estimates for discounts and allowances for which reserves are established and includes cash discounts, chargebacks, rebates, returns, copay assistance, data fees and wholesaler fees for services. Actual discounts and allowances are recorded following shipment of product and the appropriate reserves are credited. These reserves are classified as reductions of accounts receivable (if the amount is payable to the Customer and right of offset exists) or a current liability (if the amount is payable to a party other than a Customer). These allowances are established by management as its best estimate based on historical experience and data points available and are adjusted to reflect known changes in the factors that impact such reserves. Allowances for customer credits, chargebacks, rebates, data fees and wholesaler fees for services, returns, and discounts are established based on contractual terms with customers and analyses of historical usage of these items. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The nature of our allowances and accruals requiring critical estimates, and the specific considerations it uses in estimating their amounts are as follows:

Government Chargebacks and Rebates: We contract for Medicaid and other U.S. federal government programs to allow for our products to remain eligible for reimbursement under these programs. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program. Based upon our contracts and the most recent experience with respect to sales through each of these channels, we provide an allowance for chargebacks and rebates. We monitor the sales trends and adjust the chargeback and rebate percentages on a regular basis to reflect the most recent chargebacks and rebate experience. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current

quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period.

Managed Care Contract Rebates: We contract with various managed care organizations including health insurance companies and pharmacy benefit managers. These contracts stipulate that rebates and, in some cases, administrative fees, are paid to these organizations provided our product is placed on a specific tier on the organization’s drug formulary. Based upon our contracts and the most recent experience with respect to sales through managed care channels, we provide an allowance for managed care contract rebates. We monitor the sales trends and adjust the allowance on a regular basis to reflect the most recent rebate experience. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period.

Copay Mitigation Rebates: We offer copay mitigation to commercially insured patients who have coverage for our products (in accordance with applicable law) and are responsible for a cost share. Based upon our contracts and the most recent experience with respect to actual copay assistance provided, we provide an allowance for copay mitigation rebates. We monitor the sales trends and adjust the rebate percentages on a regular basis to reflect the most recent rebate experience.

Cash Discounts: We sell directly to companies in our distribution network, which primarily includes specialty pharmacies, which deliver the medication to patients by mail, and ASD Specialty Healthcare, Inc. (an AmeriSourceBergen affiliate). We generally provide invoice discounts for prompt payment for our products. We estimate our cash discounts based on the terms offered to our customers. Discounts are estimated based on rates that are explicitly stated in the Company’s contracts as it is expected they will take the discount and are recorded as a reduction of revenue at the time of product shipment when product revenue is recognized. We adjust estimates based on actual activity as necessary.

Product Returns: We offer no right of return except for products damaged upon receipt to Ampyra and Inbrija customers or a limited right of return based on the product’s expiration date to previous Zanaflex and Qutenza customers. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The company currently estimates product return liabilities using historical sales information and inventory remaining in the distribution channel.

Data Fees and Fees for Services Payable to Specialty Pharmacies: We have contracted with certain specialty pharmacies to obtain transactional data related to our products in order to develop a better understanding of our selling channel as well as patient activity and utilization by the Medicaid program and other government agencies and managed care organizations. We pay a variable fee to the specialty pharmacies to provide us the data. We also pay the specialty pharmacies a fee in exchange for providing distribution and inventory management services, including the provision of inventory management data to the Company. We estimate our fee for service accruals and allowances based on sales to each specialty pharmacy and the applicable contracted rate.

Royalty Revenue

Royalty revenue recorded by the Company relates exclusively to the Company’s License and Collaboration agreement with Biogen which provides for ongoing royalties based on sales of Fampyra outside of the U.S. The Company recognizes revenue for royalties under ASC 606, which provides revenue recognition constraints by requiring the recognition of revenue at the later of the following: 1) sale or usage of the products or 2) satisfaction of the performance obligations. The Company has satisfied its performance obligations and therefore recognizes royalty revenue when the sales to which the royalties relate are completed.

License Revenue

License revenue relates to the License and Collaboration agreement with Biogen which provides for milestone payments for the achievement of certain regulatory and sales milestones during the term of the agreement. Regulatory milestones are contingent upon the approval of Fampyra for new indications outside of the U.S. Sales milestones are contingent upon the achievement of certain net sales targets for Fampyra sales outside of the U.S. The Company recognizes license revenue under ASC 606, which provides constraints for entities to recognize license revenue which is deemed to be

variable by requiring the Company to estimate the amount of consideration to which it is entitled in exchange for transferring the promised goods or services to a customer. The Company recognizes an estimate of revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the milestone is achieved. For regulatory milestones, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. For sales-based milestones, the Company recognizes revenue upon the achievement of the specific sale milestones. The Company did not recognize any license revenue related to milestones for the years ended December 31, 2019, 2018 or 2017.

The following table disaggregates our revenue by major source (in thousands):

	Year ended December 31,		Year ended December 31,		Year ended December 31,
(In thousands)	2019		2018		2017
Revenues:
Net product revenues:
Ampyra	$	163,162	$	455,096	$	543,343
Inbrija		15,303		—		—
Other		2,271		4,643		6,406
Total net product revenues		180,736		459,739		549,749
Royalty revenues		11,672		11,694		29,481
License revenue		—		—		9,057
Total net revenues	$	192,408	$	471,433	$	588,287

Concentration of Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments in cash, cash equivalents, restricted cash, short-term investments and accounts receivable. The Company does not require any collateral for its accounts receivable. The Company maintains cash, cash equivalents and restricted cash with approved financial institutions. The Company is exposed to credit risks and liquidity 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.

The Company does not own or operate, and currently does not plan to own or operate, facilities for production and packaging of its product Ampyra. It relies and expects to continue to rely on third parties for the production and packaging of its commercial products and clinical trial materials for all of its products except Inbrija. The Company leases a manufacturing facility in Chelsea, Massachusetts which produces Inbrija for clinical trials and commercial supply.

The Company relies primarily on Alkermes for its supply of Ampyra. Under its supply agreement with Alkermes, the Company is obligated to purchase at least 75% of its yearly supply of Ampyra from Alkermes, and it is required to make compensatory payments if it does not purchase 100% of its requirements from Alkermes, subject to certain specified exceptions. The Company and Alkermes have agreed that the Company may purchase up to 25% of its annual requirements from Patheon, a mutually agreed-upon second manufacturing source, with compensatory payment. The Company and Alkermes also rely on a single third-party manufacturer, Regis, to supply dalfampridine, the active pharmaceutical ingredient, or API, in Ampyra. If Regis experiences any disruption in their operations, a delay or interruption in the supply of Ampyra product could result until Regis cures the problem or it locates an alternate source of supply.

The Company’s principal direct customers as of December 31, 2019 were a network of specialty pharmacies and ASD Specialty Healthcare, Inc. (an AmeriSource Bergen affiliate) for Inbrija and a network of specialty pharmacies for Ampyra. The Company periodically assesses the financial strength of these customers and establishes allowances for anticipated losses, if necessary. Four customers individually accounted for more than 10% of the Company’s revenue or approximately 83% of total revenue in 2019. Four customers individually accounted for more than 10% of the Company’s revenue in 2018 and 2017. Four customers individually accounted for more than 10% of the Company’s accounts receivable or approximately 91% of total accounts receivable as of December 31, 2019. Five customers individually accounted for more than 10% of the

Company’s accounts receivable or approximately 88% of total accounts receivable as of December 31, 2018. The Company’s net product revenues are generated in the U.S.

Allowance for Cash Discounts

An allowance for cash discounts is accrued based on historical usage rates at the time of product shipment. The Company adjusts accruals based on actual activity as necessary. Cash discounts are typically settled with customers within 34 days after the end of each calendar month. The Company provided cash discount allowances of $2.7 million and $6.4 million for the years ended December 31, 2019 and 2018, respectively. The Company’s reserve for cash discount allowances was $0.4 million as of December 31, 2019 and 2018,

(in thousands)	Cash discounts
Balance at December 31, 2017	$	844
Allowances for sales		6,371
Actual credits		(6,820	)
Balance at December 31, 2018	$	395
Allowances for sales		2,722
Actual credits		(2,705	)
Balance at December 31, 2019	$	412

Allowance for Doubtful Accounts

A portion of the Company’s accounts receivable may not be collected. The Company provides reserves based on an evaluation of the aging of its trade receivable portfolio and an analysis of high-risk customers. The Company has not historically experienced material losses related to credit risk. The Company had no recognized allowance for doubtful accounts as of December 31, 2019 or December 31, 2018. There were no provisions and write-offs for the years ended December 31, 2019 and 2018.

Allowance for Chargebacks

Based upon the Company’s contracts and the most recent experience with respect to sales with the U.S. government, the Company provides an allowance for chargebacks. The Company monitors the sales trends and adjusts the chargebacks on a regular basis to reflect the most recent chargebacks experience. The Company recorded a charge of $6.5 million and $18.9 million for the years ended December 31, 2019 and December 31, 2018, respectively. The Company made a payment of $8.5 million and $16.7 million related to the chargebacks allowances for the years ended December 31, 2019 and December 31, 2018, respectively. The Company’s reserve for chargebacks allowance was $0.2 million and $2.2 million as of December 31, 2019 and December 31, 2018, respectively.

Contingencies

The Company accrues for amounts related to legal matters if it is probable that a liability has been incurred and the amount is reasonably estimable. Litigation expenses are expensed as incurred.

Fair Value of Financial Instruments

The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. Significant differences can arise between the fair value and carrying amounts of financial instruments that are recognized at historical cost amounts. The Company considers that fair value should be based on the assumptions market participants would use when pricing the asset or liability.

The following methods are used to estimate the fair value of the Company’s financial instruments:

(a)

Cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these instruments;

(b)

Short-term investments are recorded based primarily on quoted market prices;

(c)

Acquired contingent consideration related to the Civitas acquisition is measured at fair value using a probability weighted, discounted cash flow approach;

(d)

Convertible Senior Notes were measured at fair value based on market quoted prices of the debt securities;

(e)

Capital and R&D loans were measured at fair value based on a discounted cash flow approach;

(f)

New convertible senior secured notes due 2024 were measured at fair value based on market quoted prices of the debt securities; and

(g)

Derivate liability related to conversion option of the new convertible senior secured notes due 2024 is measured at fair value using a Monte Carlo simulation approach.

Earnings per Share

Basic net income (loss) per share and diluted net income per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted average number of common shares outstanding during the period plus the effect of additional weighted average common equivalent shares outstanding during the period when the effect of adding such shares is dilutive. Common equivalent shares result from the assumed exercise of outstanding stock options (the proceeds of which are then assumed to have been used to repurchase outstanding stock using the treasury stock method), the vesting of restricted stock and the potential dilutive effects of the conversion option on the Company’s convertible debt. In addition, the assumed proceeds under the treasury stock method include the average unrecognized compensation expense of stock options that are in-the-money. This results in the “assumed” buyback of additional shares, thereby reducing the dilutive impact of stock options. See Note 18 for discussion on earnings (loss) per share.

Share‑based Compensation

The Company has various share‑based employee and non-employee compensation plans, which are described more fully in Note 10.

The Company accounts for stock options and restricted stock granted to employees and non-employees by recognizing the costs resulting from all share-based payment transactions in the consolidated financial statements at their fair values. The Company estimates the fair value of each option on the date of grant using the Black‑Scholes closed-form option‑pricing model based on assumptions of expected volatility of its common stock, prevailing interest rates, an estimated forfeiture rate, and the expected term of the stock options, and the Company recognizes that cost as an expense ratably over the associated service period.

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; 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 operation and reported in other income (expense) in consolidated statements of operations.

Segment and Geographic Information

The Company is managed and operated as one business which is focused on developing therapies that restore function and 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 to allocate resources 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 and Inbrija in the U.S. for the year ended December 31, 2019 and Ampyra and Qutenza in the U.S. for the year ended December 31, 2018 and Ampyra, Zanaflex and Qutenza in the U.S. for the year ended December 31, 2017.

Accumulated Other Comprehensive Income

Unrealized gains (losses) from the Company’s investment securities and adjustments for foreign currency translation are included in accumulated other comprehensive income within the consolidated balance sheet.

Recent Accounting Pronouncements - Adopted

In February 2016, the FASB issued ASU 2016-02, “Leases” Topic 842, which amends the guidance in former ASC Topic 840, Leases. The new standard increases transparency and comparability most significantly by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases longer than 12 months. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For lessees, leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The Company adopted the new lease guidance effective January 1, 2019 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. See Note 3 for further information.

In August 2018, the Securities Exchange Commission (“SEC”) adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. The Company adopted the rule in the three-month period ended March 31, 2019 and included its first presentation of changes in stockholders’ equity in its Form 10-Q for the three-month period ended March 31, 2019.

In February 2018, the FASB issued ASU 2018-02, “Income Statement—Reporting Comprehensive Income” (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02). This new standard provides entities with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. The reclassification is the difference between the amount previously recorded in other comprehensive income at the historical U.S. federal tax rate that remains in accumulated other comprehensive loss at the time the Act was effective and the amount that would have been recorded using the newly enacted rate. This guidance became effective in Q1 2019; however, the Company did not elect to make the optional reclassification.

In July 2018, the FASB issued ASU 2018-09, “Codification Improvements.” The ASU’s amendments clarify, correct errors in, or make minor improvements to a variety of ASC topics. The changes in ASU 2018-09 are not expected to have a significant effect on current accounting practices. Some of the amendments in this update do not require transition guidance and are effective upon issuance of this update. However, many of the amendments in this update do have transition guidance with effective dates for annual periods beginning after December 15, 2018, for public business entities. The ASU became effective in Q1 2019. The ASU did not have a significant impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other” (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). This new standard simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 allows for prospective application and is effective for fiscal years beginning after December 15, 2019, and interim periods therein with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted this guidance on April 1, 2019. The ASU did not have an impact upon adoption on its consolidated financial statements.

Recent Accounting Pronouncements – Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This ASU provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model. This new standard amends the current guidance on the impairment of financial instruments and adds an impairment model known as current expected credit loss (CECL) model that is based on expected losses rather than incurred losses. Under the new guidance, an entity will recognize as an allowance its estimate of expected credit losses. The FASB subsequently issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses to clarify and address certain items related to the amendments in ASU 2016-13. ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief, was issued to provide entities that have certain instruments within the scope of ASC 326 with an option to irrevocably elect the fair value option under ASC 825-10, Financial Instruments - Overall, applied on an instrument-by-instrument basis for eligible instruments. ASC 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim reporting periods within those fiscal years with early adoption permitted. The Company does not anticipate a significant impact on its consolidated financial statements based on the available for sale debt instruments currently held and its historical trend of bad debt expense relating to trade accounts receivable.

In August 2018, the FASB issued ASU 2018-13 “Fair Value Measurement (Topic 820): “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The amendment in this ASU eliminate, add and modify certain disclosure requirements for fair value measurements as part of its disclosure framework project. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public business entities will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The ASU is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its disclosure requirements in consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The ASU clarifies certain aspects of ASU 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” which was issued in April 2015. Specifically, the ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license).” The ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.

In November 2018, the FASB issued ASU 2018-18, Collaborative arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606. ASU 2018-18 clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer and precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from contracts with customers if the counterparty is not a customer for that transaction. The ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes. The ASU enhances and simplifies various aspects of the income tax accounting guidance in ASC 740 and removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. This ASU is effective for fiscal years beginning after December 15,

2020, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements

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 there were no subsequent events that required disclosure in our financial statements.

Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

(3) Leases

In February 2016, the FASB issued ASU 2016-02, “Leases” Topic 842, which amends the guidance in former ASC Topic 840, Leases. The new standard increases transparency and comparability most significantly by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases longer than 12 months. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. For lessees, leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

The Company adopted the new lease guidance effective January 1, 2019 using the modified retrospective transition approach, applying the new standard to all of its leases existing at the date of initial application which is the effective date of adoption. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We elected the package of practical expedients which permits us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) any initial direct costs for any existing leases as of the effective date. We did not elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term and assessing impairment. The adoption of the lease standard did not change our previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity. The adoption of the new guidance resulted in the recognition of ROU assets of $28.0 million and lease liabilities of $35.1 million at January 1, 2019. The difference between the ROU assets and the lease liabilities is primarily due to unamortized initial direct costs, lease incentives and deferred rent related to the Company’s operating leases at December 31, 2018.

The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In calculating the present value of the lease payments, the Company elected to utilize its incremental borrowing rate based on the remaining lease terms as of the January 1, 2019 adoption date.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred, if any. Our leases have remaining lease terms of 2.5 years to 7 years, some of which include options to extend the lease term for up to 15 years, and some of which include options to terminate the lease within 2.5 years.

The Company has elected the practical expedient to combine lease and non-lease components as a single component. The lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the balance sheet as right-of-use assets, current operating lease liabilities and non-current operating lease liabilities.

The new standard also provides practical expedients and certain exemptions for an entity’s ongoing accounting. We have elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases where the initial lease term is one year or less or for which the ROU asset at inception is deemed immaterial, we will not recognize ROU assets or lease liabilities. Those leases are expensed on a straight line basis over the term of the lease.

Operating Leases

We lease certain office space, manufacturing and warehouse space under arrangements classified as leases under ASC 842. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Most leases include one or more options to renew, with renewal options ranging from 5 to 15 years. The exercise of lease renewal options is at our sole discretion. One of our leases also includes an option to early terminate the lease within 2.5 years.

Ardsley, New York

In June 2011, the Company entered into a 15-year lease for an aggregate of approximately 138,000 square feet of office and laboratory space in Ardsley, New York. In 2014, the Company exercised its option to expand into an additional 25,405 square feet of office space, which the Company occupied in January 2015. 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. The Company’s extension and early termination 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 Ardsley lease provides for monthly payments of rent during the lease term. These payments consist of base rent, which takes into account the costs of the facility improvements 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 is currently $4.8 million per year, which reflects an annual 2.5% escalation factor.

Chelsea, Massachusetts

Through our Civitas subsidiary, we lease a manufacturing facility in Chelsea, Massachusetts which we use to manufacture Inbrija. The approximately 90,000 square foot facility also includes office and laboratory space. Civitas leases this facility from North River Everett Ave, LLC pursuant to a lease with a term that expires on December 31, 2025, and Civitas has two additional extension options of five years each. The base rent under the lease is currently $1.7 million per year, which reflects an annual escalation factor of 2.5% as well as an amendment to the lease to add additional property at the Chelsea, Massachusetts site as further described below.

In 2017, the Company’s Civitas subsidiary amended its existing Chelsea, Massachusetts lease. The amendment added expansion property located in Chelsea, Massachusetts next to the existing facility. The additional property includes land being used for parking and a free-standing warehouse building on the same site. The base rent for the additional property under the lease included in the rent number above, is currently $0.4 million per year with an annual escalation factor of 3.0%.

In 2018, the Company initiated a renovation and expansion of a building within the Chelsea manufacturing facility that increased the size of the facility to approximately 95,000 square feet. The project has added a new manufacturing production line for Inbrija and other ARCUS products that has greater capacity than the existing manufacturing line, and has created additional warehousing space for manufactured product. Pursuant to a 2018 lease amendment that enabled the renovation and expansion, upon completion of the project, annual rent under the lease increased to $1.7 million. Although the project was substantially completed in late 2019, it will take additional time after completion of construction to obtain the approvals needed for use of the new production line for commercial manufacture, such as approvals from the FDA, Massachusetts state environmental permits, and approvals from other regulatory authorities. All costs to renovate and expand the facility are borne by the Company, and will be accounted for as leasehold improvements when the renovation and expansion is approved to be used for production.

Additional Facilities

In October 2016, we entered into a 10-year lease agreement with a term commencing January 1, 2017, for approximately 26,000 square feet of lab and office space in Waltham, MA. The lease provides for monthly rental payments over the lease term. The base rent under the lease is currently $1.1 million per year.

Our leases have remaining lease terms of 2.5 years to 7 years, which assumes exercise of the early termination of our Ardsley, NY lease. We do not include any renewal options in our lease terms when calculating our lease liabilities as we are

not reasonably certain that we will exercise these options. When calculating the lease liability, we assume exercise of the Ardsley early termination option. The weighted-average remaining lease term for our operating leases was 5 years at December 31, 2019. The weighted-average discount rate was 7.13% at December 31, 2019.

ROU assets and lease liabilities related to our operating leases are as follows:

(In thousands)	Balance Sheet Classification	December 31, 2019
Right-of-use assets	Right of use assets	$	23,450
Current lease liabilities	Current portion of lease liabilities		7,746
Non-current lease liabilities	Non-current portion of lease liabilities		22,996

We have lease agreements that contain both lease and non-lease components. We account for lease components together with non-lease components (e.g., common-area maintenance). The components of lease costs were as follows:

	Year ended December 31,
(In thousands)	2019
Operating lease cost	$	7,070
Variable lease cost		4,585
Short-term lease cost		1,417
Total lease cost	$	13,072

Future minimum commitments under all non-cancelable operating leases are as follows:

(In thousands)
2020	$	7,746
2021		7,935
2022		9,971
2023		3,043
2024		3,128
Later years		4,537
Total lease payments		36,360
Less: Imputed interest		(5,619	)
Present value of lease liabilities	$	30,741

Supplemental cash flow information and non-cash activity related to our operating leases are as follows:

(In thousands)	December 31, 2019
Operating cash flow information:
Cash paid for amounts included in the measurement of lease liabilities	$	7,507
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	770

Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

(4) Intangible Assets and Goodwill

Intangible Assets

Inbrija (levodopa inhalation powder) and ARCUS Technology

In connection with the acquisition of Civitas in October 2014, the Company acquired global rights to Inbrija, a Phase 3 treatment candidate for Parkinson’s disease OFF periods, also known as OFF episodes. The acquisition of Civitas also included rights to Civitas’ proprietary ARCUS drug delivery technology, which the Company believes has potential to be

used in the development of a variety of inhaled medicines. In December 2018, the FDA approved Inbrija for intermittent treatment of OFF episodes in people with Parkinson’s disease treated with carbidopa/levodopa.

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 by the Company, based upon the estimated fair values of those assets and liabilities at the date of acquisition and classified the fair value of the acquired IPR&D as an indefinite-lived intangible asset until the successful completion of the associated research and development efforts. The value allocated to the indefinite lived intangible asset was $423 million. In December 2018, the Company received FDA approval for Inbrija and accordingly reclassified the indefinite lived intangible asset to a definite lived intangible asset with amortization commencing upon launch in February 2019.

Ampyra

In January 2010, the Company received marketing approval from the FDA for Ampyra triggering two milestone payments of $2.5 million to Alkermes and $0.8 million to Rush-Presbyterian St. Luke’s Medical Center (Rush) and an additional $2.5 million payable to Alkermes two years from date of approval. The Company made the milestone payments totaling $5.75 million, which were recorded as intangible assets in the consolidated financial statements.

The Company had a License Agreement with the Canadian Spinal Research Organization (CSRO) that granted the Company an exclusive and worldwide license under certain patent assets and know-how of CSRO. The agreement required the Company to pay royalties to CSRO 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 2010, the Company purchased CSRO’s rights to all royalty payments under the agreement for $3.0 million. This payment was recorded as an intangible asset in the consolidated financial statements.

On March 31, 2017, the United States District Court for the District of Delaware (the “District Court”) upheld U.S. Patent No. 5,540,938 (the ‘938 patent), which was set to expire in July 2018. The claims of the ‘938 patent relate to methods for treating a neurological disease, such as MS, and cover the use of a sustained release dalfampridine formulation, such as AMPYRA (dalfampridine) Extended Release Tablets, 10 mg for improving walking in people with MS. The District Court invalidated U.S. Patent Nos. 8,663,685, 8,007,826, 8,440,703, and 8,354,437, which pertain to Ampyra. In May 2017, the Company appealed the ruling on these patents. As a result of the District Court’s ruling, the Company performed an interim impairment test for the intangible assets related to Ampyra in connection with the preparation of the unaudited interim condensed consolidated financial statements for the first quarter of 2017. Based on the impairment test performed, the Company determined that these intangible assets were not impaired.

As a result of the invalidation of the patents, the estimated remaining useful lives of the Ampyra intangible assets were reviewed in 2017 to determine if there was a change in the estimated useful lives of these assets. Based on the review, the Company determined that there was a change in the estimated useful lives of these assets that would require an acceleration of the amortization expense. The Company determined that the estimated useful lives of these intangible assets will coincide with the expiration of the ‘938 patent, unless the appeal is resolved favorably. The Company accounted for this change prospectively as a change in an accounting estimate beginning in the three-month period ended June 30, 2017. The acceleration of the amortization associated with the change in the estimated remaining useful lives of these intangible assets, did not have a material impact on the Company’s statement of operations for the year ended December 31, 2019 or December 31, 2018.

Tozadenant, SYN120, BTT1023 and Selincro IPR&D

In connection with the acquisition of Biotie, the Company acquired global rights to tozadenant, SYN120, and BTT1023 (timolumab). Tozadenant was a potential treatment for Parkinson’s disease patients to reduce off periods. SYN120 is a potential treatment for Parkinson’s-related dementia. BTT1023 is a product candidate for the orphan disease Primary Sclerosing Cholangitis, or PSC, a chronic and progressive liver disease. 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 marketed across Europe by 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 value allocated to Selincro was $65 million, which was being amortized over the estimated remaining useful life of approximately 6 years. The value allocated to the indefinite lived intangible assets was $260.5 million.

In November 2017, the Company announced that it was discontinuing its clinical development program for tozadenant, including immediately discontinuing dosing of all participants that were already enrolled in tozadenant studies. The Company made this decision based on additional data obtained from the Phase 3 clinical trial related to previously disclosed agranulocytosis and associated serious adverse events. Based on the analysis of the additional data, the Company determined that tozadenant was fully impaired. The Company recorded a non-cash impairment charge in the amount of approximately $233.5 million to write-off the asset for the year ended December 31, 2017.

In December 2017, the Company received and reviewed the data read-out from the Phase II proof-of-concept study for SYN120. The data from the Phase II study showed that neither the primary nor key secondary endpoints achieved statistical significance. Based on the data from the study indicating a lack of statistical significance for the key endpoints in the study, management determined that SYN120 was fully impaired. The Company recorded a non-cash impairment charge in the amount of approximately $23.8 million to write-off the asset for the year ended December 31, 2017.

In the three-month period ended September 30, 2017, the Company determined the carrying value of Selincro was greater than the estimated fair market value. The Company recorded a non-cash impairment charge of $39.4 million representing the amount by which the carrying value exceeded the fair market value for the year ended December 31, 2017.

In November 2017, the Company executed an Amendment to its existing License and Commercialization Agreement with Lundbeck for the Company to provide to Lundbeck, a fully paid up royalty free license under the licensed IP for sales of Selincro outside of the U.S. in exchange for a payment of approximately $13.0 million (or approximately €11.0 million). Selincro is not approved for use in the U.S. The Company recorded the receipt of the payment from Lundbeck as royalty income for the year ended December 31, 2017 and accelerated the amortization of the remaining carrying value to account for the asset monetization. The Company recorded amortization expense related to Selincro of approximately $14.7 million (or approximately €12.4 million) in the three-month period ended December 31, 2017. As of December 31, 2017, the net book value of Selincro was $0.

Websites

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 various other websites.

The Company continually evaluates whether events or circumstances have occurred that indicate that the carrying value of the intangible assets may be impaired or that the estimated remaining useful lives of these assets may warrant revision. As of December 31, 2019, the Company determined that the intangible assets were not impaired and that there are no facts or circumstances that would indicate a need for changing the estimated remaining useful lives of these assets.

Intangible assets consisted of the following:

			December 31, 2019										December 31, 2018
(Dollars In thousands)	Estimated Remaining Useful Lives (Years)		Cost		Accumulated Amortization			Foreign Currency Translation			Net Carrying Amount		Cost		Accumulated Amortization			Reclass to Definite-lived asset			Foreign Currency Translation			Net Carrying Amount
In-process research & development ⁽¹⁾	Indefinite-lived		$	4,300	$	—		$	(88	)	$	4,212	$	427,500	$	—		$	(423,000	)	$	(200	)	$	4,300
Inbrija ⁽²⁾	13			423,000		(25,636	)		—			397,364		—		—			423,000			—			423,000
Ampyra milestones	n/a			—		—			—			—		5,750		(5,750	)		—			—			—
Ampyra CSRO royalty buyout	n/a			—		—			—			—		3,000		(3,000	)		—			—			—
Website development costs		2		14,559		(13,806	)		—			753		13,857		(13,289	)		—			—			568
Website development costs–in process	n/a			—		—			—			—		702		—			—			—			702
			$	441,859	$	(39,442	)	$	(88	)	$	402,329	$	450,809	$	(22,039	)	$	—		$	(200	)	$	428,570

(1)

Includes the fair value of BTT1023.

(2)

In December 2018, the Company received FDA approval for Inbrija and accordingly reclassified the indefinite lived intangible assets to definite lived intangible assets and began amortizating the assets upon launch in February 2019.

The Company recorded amortization expense of $26.2 million of which $25.6 million pertained to the intangible asset related to Inbrija and $0.6 million related to the amortization of website development costs and $2.4 million of which $1.7 million pertained to the intangible asset related to Ampyra and $0.7 million related to the amortization of website development costs related to these intangible assets for the years ended December 31, 2019 and 2018, respectively.

Estimated future amortization expense for intangible assets subsequent to December 31, 2019 is as follows:

(In thousands)
2020	$	31,136
2021		31,023
2022		30,885
2023		30,764
2024		30,764
Thereafter		243,545
	$	398,117

The weighted-average remaining useful lives of all amortizable assets is approximately 13.0 years.

Goodwill

During the third quarter of 2019, we experienced a significant decline in our stock price that reduced the market capitalization below the carrying value of the Company. The Company performed a quantitative assessment of the goodwill and concluded that there was an impairment to the goodwill. The Company utilized the income approach in the goodwill assessment process. The determination of the fair value of the reporting unit requires us to make significant estimates and assumptions. This valuation approach considers a number of factors that include, but are not limited to, prospective financial information, growth rates, terminal value, and discount rates and require us to make certain assumptions and estimates. When performing our income approach, we incorporate the use of projected financial information and a discount rate that are developed based on certain assumptions. Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates. The Company then corroborates the reasonableness of the total fair value of the reporting unit by reconciling the aggregate fair value of the reporting unit to the Company’s total market capitalization adjusted to include an estimated control premium. The estimated control premium is derived from reviewing observable transactions involving the purchase of controlling interests in comparable companies. The market capitalization is calculated using the relevant shares outstanding and the closing stock price at the test date. After completing our impairment assessment during the third quarter of 2019, we concluded that the carrying value of the Company exceeded its estimated fair value and therefore, the goodwill was fully impaired. The Company recorded an impairment charge of $277.6 million for the year ended December 31, 2019 in the statement of operations.

The following table presents the goodwill balances at December 31, 2019 and 2018 and the associated changes in goodwill through December 31, 2019.

(In thousands)
Balance at December 31, 2018	$	282,059
Impairment		(277,561	)
Foreign currency translation adjustment		(4,498	)
Balance at December 31, 2019	$	—

Qutenza and Zanaflex Asset Sales

12 Months Ended

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Qutenza and Zanaflex Asset Sales

(5) Qutenza and Zanaflex Asset Sales

In May 2018, the Company entered into an Asset Purchase Agreement (the “Agreement”) to sell to its rights and interests related to Qutenza assets for a purchase price of $7.9 million. The Company recognized a gain on the sale of approximately $7.8 million for the year ended December 31, 2018 after reflecting the net book value of the inventory transferred to the buyer. The Company is entitled to receive up to an additional $35.0 million in cash based on achievement of specified U.S. sales milestones for Qutenza. The gain on the sale is recognized in the Statement of Operations as a reduction to the selling, general and administrative expenses.

In November 2017, the Company entered into an asset purchase agreement (“Agreement”) to sell its rights and interests related to its Zanaflex assets for a purchase price of $4.0 million. The Company recognized a gain on the sale of approximately $3.5 million for the year ended December 31, 2017 after reflecting the direct costs to complete the transaction and the net book value of the inventory transferred to the buyer. The gain on the sale is recognized in the Statement of Operations as a reduction to the selling, general and administrative expenses.

Investments

12 Months Ended

Dec. 31, 2019

Investments Debt And Equity Securities [Abstract]

Investments

(6) Investments

The Company has determined that all of its investments are classified as available-for-sale. Available-for-sale debt securities are carried at fair value with interest on these investments included in interest income and are recorded based on quoted market prices. Available-for-sale investments consisted of the following at December 31, 2019 and December 31, 2018, respectively:

(In thousands)	Amortized Cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
December 31, 2019
Commercial Paper	$	26,550	$	19	$	—		$	26,569
Corporate Bonds		37,177		20		(12	)		37,185
Total Short-term Investments	$	63,727	$	39	$	(12	)	$	63,754
December 31, 2018
Commercial Paper	$	47,149	$	—	$	(41	)	$	47,108
Corporate Bonds		104,965		6		(90	)		104,881
Total Short-term investments	$	152,114	$	6	$	(131	)	$	151,989

Short-term investments with maturities of three months or less from date of purchase have been classified as cash equivalents, and amounted to approximately $2.2 million and $9.6 million as of December 31, 2019 and December 31, 2018, respectively. Short-term investments have original maturities of greater than 3 months but less than 1 year and amounted to approximately $63.8 million and $152.0 million as of December 31, 2019 and December 31, 2018, respectively. The aggregate fair value of short-term investments in an unrealized loss position amounted to approximately $25.5 million and $139.6 million as of December 31, 2019 and December 31, 2018, respectively. Short-term investments at December 31, 2019 primarily consisted of high-grade commercial paper and corporate bonds. Long-term investments have original maturities of greater than 1 year. There were no investments classified as long-term at December 31, 2019 or December 31, 2018. The Company has determined that there were no other-than-temporary declines in the fair values of its investments as of December 31, 2019 as the Company does not intend to sell its investments and it is not more likely than not that the Company will be required to sell its investments prior to the recovery of its amortized cost basis.

Unrealized holding gains and losses, which relate to debt instruments, are reported within accumulated other comprehensive income (AOCI) in the statements of comprehensive income. The changes in AOCI associated with the unrealized holding gains on available-for-sale investments during the year ended December 31, 2019, were as follows (in thousands):

(In thousands)	Net Unrealized Gains (Losses) on Short-term Investments
Balance at December 31, 2018	$	(125	)
Other comprehensive loss before reclassifications:
Amounts reclassified from accumulated other comprehensive loss		—
Net current period other comprehensive gains		152
Balance at December 31, 2019	$	27

Property and Equipment

12 Months Ended

Dec. 31, 2019

Property Plant And Equipment [Abstract]

Property and Equipment

(7) Property and Equipment

Property and equipment consisted of the following:

(In thousands)	December 31, 2019			December 31, 2018			Estimated useful lives used
Machinery and equipment	$	27,106		$	24,798		2-7 years
Leasehold improvements		25,305			25,047		Lesser of useful life or remaining lease term
Computer equipment		22,604			21,472		1-3 years
Laboratory equipment		9,415			9,021		2-5 years
Furniture and fixtures		2,260			2,599		4-7 years
Construction in progress		120,313			34,489
		207,003			117,426
Less accumulated depreciation		(64,476	)		(56,907	)
	$	142,527		$	60,519

Depreciation and amortization expense on property and equipment was $8.4 million and $9.0 million for the years ended December 31, 2019 and 2018, respectively.

Preferred Stock

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Preferred Stock

(8) Preferred Stock

Stockholder Rights Plan

On August 31, 2017, the Board of Directors of the Company adopted a stockholder rights plan (Rights Plan) to preserve the ability of the Board to protect the interests of stockholders in transactions that might have resulted in an acquisition of control of the Company, including tender offers and open market purchases of the Company’s securities. The Rights expired at the close of business on August 31, 2018. There were no rights exercised prior to the expiration.

In general terms, the Rights Plan worked by significantly diluting the stock ownership of any person or group that acquired 15% or more of the outstanding common stock of the Company without the approval of the Board (such person, an Acquiring Person). The rights plan exempted any person or group owning 15% or more of the Company’s outstanding common stock when we announced the rights plan, however the exemption did not apply to additional shares acquired after the announcement.

Under the Rights Plan, on August 31, 2017, the Board authorized and declared a dividend of one preferred share purchase right (Right) for each outstanding share of common stock, par value $0.001 per share, of the Company. The dividend was payable to the stockholders of record on September 11, 2017 (Record Date). Each Right, when it became

exercisable, entitled the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company at a price of $110 per one one-thousandth of a Preferred Share, subject to adjustment. As of December 31, 2019 and 2018, there were 1,000,000 preferred shares authorized and no such shares issued and outstanding. In addition, one Right would have automatically attached to each Common Share that became outstanding between the Record Date and the earliest of the Distribution Date, the redemption of the Rights or the expiration of the Rights. The Distribution Date was the close of business on the tenth day after the first date of public announcement that any person had become an Acquiring Person or such earlier date as a majority of the Board became aware of the existence of an Acquiring Person. Until a Right was exercised, the holder thereof, had no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. The Rights were not exercisable until the Distribution Date.

Common Stock Options and Restricted Stock

12 Months Ended

Dec. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Common Stock Options and Restricted Stock

(9) Common Stock Options and Restricted Stock

On January 12, 2006, the Company’s board of directors approved the adoption of the Acorda Therapeutics, Inc. 2006 Employee Incentive Plan (the 2006 Plan). The 2006 Plan served as the successor to the Company’s 1999 Plan, as amended, and no further option grants or stock issuances were to be made under the 1999 Plan after the effective date, as determined under Section 14 of the 2006 Plan. All employees of the Company were eligible to participate in the 2006 Plan, including executive officers, as well as directors, independent contractors, and agents of the Company. The 2006 Plan also covered the issuance of restricted stock.

The 2006 Plan was administered by the Compensation Committee of the Board of Directors, which selected the individuals to be granted options and restricted stock, determined the time or times at which options and restricted stock were to be granted, determined the number of shares to be granted subject to any option or restricted stock and the duration of each option and restricted stock, and made any other determinations necessary, advisable, and/or appropriate to administer the 2006 Plan. Under the 2006 Plan, each option granted expires no later than the tenth anniversary of the date of its grant. The number of shares of common stock authorized for issuance under the 2006 Plan as of December 31, 2019 was 14,912,048 shares. The total number of shares of common stock available for issuance under the 2006 Plan, including shares of common stock subject to the then outstanding awards, automatically increased on January 1 of each year during the term of the 2006 Plan, beginning 2007, by a number of shares of common stock equal to 4% of the outstanding shares of common stock on that date, unless otherwise determined by the Board of Directors. As of December 31, 2019, the Company had granted an aggregate of 11,725,092 shares as restricted stock or subject to issuance upon exercise of stock options under the 2006 Plan, of which 4,710,174 shares remained subject to outstanding options.

On June 9, 2015, the Company’s stockholders approved the adoption of the Acorda Therapeutics, Inc. 2015 Omnibus Incentive Compensation Plan (the 2015 Plan). The 2015 Plan serves as the successor to the Company’s 2006 Plan, as amended, and no further option or stock grants will be made under the 2006 Plan after the effective date, as determined under Section 1 of the 2015 Plan. All employees of the Company are eligible to participate in the 2015 Plan, including executive officers, as well as directors, consultants, advisors and other service providers of the Company or any of its subsidiaries. The 2015 Plan also covers the issuance of restricted stock.

The 2015 Plan is administered by the Compensation Committee of the Board of Directors, which selects the individuals to be granted options, restricted stock, and restricted stock units, determines the time or times at which options, restricted stock, and restricted stock units are to be granted, determines the number of shares to be granted subject to any option, restricted stock or restricted stock unit and the duration of each option, restricted stock, and restricted stock unit, and makes any other determinations necessary, advisable, and/or appropriate to administer the 2015 Plan. Under the 2015 Plan, each option granted expires no later than the tenth anniversary of the date of its grant. Since inception, the number of shares of common stock authorized for issuance under the 2015 Plan as of December 31, 2019 is 8,100,000 shares. As of December 31, 2019, the Company had granted an aggregate of 8,069,994 shares either as restricted stock or shares subject to issuance upon the exercise of stock options under the 2015 Plan, of which 5,725,209 shares remained subject to outstanding options.

On April 14, 2016 the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approved the Acorda Therapeutics, Inc. 2016 Inducement Plan (the “2016 Plan”) to provide equity compensation to certain individuals of the Company (or its subsidiaries) in order to induce such individuals to enter into employment with the Company or its subsidiaries. The only equity awards issued under this plan were issued to individuals employed by Biotie Therapies Ltd., formerly Biotie Therapies Corp., and its subsidiary Biotie Therapies, Inc. (collectively, “Biotie”) in connection with our acquisition of Biotie. The number of shares of common stock authorized for issuance under the 2016 Plan for these awards is 366,950 shares. As of December 31, 2019, the Company had granted an aggregate of

140,975 shares either as restricted stock or shares subject to issuance upon the exercise of stock options under the 2016 Plan, of which 32,125 shares remained subject to outstanding options.

On June 19, 2019, the Company’s stockholders approved the Company’s 2019 Employee Stock Purchase Plan (the “2019 ESPP Plan”) at the annual meeting of stockholders pursuant to which up to 1,500,000 shares of the Company’s common stock, par value $0.001 per share may be issued thereunder (the “Plan Shares). As of December 31, 2019, there were 1,500,000 shares of common stock remaining authorized for issuance under the 2019 ESPP Plan.

The fair value of each option granted is estimated on the date of grant using the Black‑Scholes option‑pricing model with the following weighted average assumptions:

	Year ended December 31,
	2019			2018			2017
Employees and directors:
Estimated volatility%		67.52	%		52.29	%		48.02	%
Expected life in years		6.25			6.16			6.15
Risk free interest rate%		1.85	%		2.76	%		2.08	%
Dividend yield		—			—			—

The Company estimated volatility for purposes of computing compensation expense on its employee and director options using the historic volatility of the Company’s stock price. The expected life used to estimate the fair value of employee and director options is based on the historical life of the Company’s options based on exercise data.

The weighted average fair value per share of options granted to employees and directors for the years ended December 31, 2019, 2018 and 2017 amounted to approximately $2.56, $12.71, and $10.70, respectively. No options were granted to non-employees for the years ended December 31, 2019, 2018 and 2017.

During the year ended December 31, 2019, the Company granted 3,005,511 stock options to employees and directors under all plans. The stock options were issued with a weighted average exercise price of $4.48 per share. As a result of these grants, the total compensation charge to be recognized over the service period is $12.0 million, of which $3.3 million was recognized during the year ended December 31, 2019.

Compensation costs for options and restricted stock granted to employees and directors amounted to $14.3 million, $21.3 million, and $32.8 million, for the years ended December 31, 2019, 2018 and 2017, respectively. Of the total compensation cost, there was $0.7 million compensation cost capitalized in inventory balances for the year ended December 31, 2019. Compensation expense for options and restricted stock granted to employees and directors are classified in inventory, research and development, selling, general and administrative, and cost of sales expense based on employee job function. The following table summarizes share-based compensation expense included within the Company’s consolidated statements of operations:

	Year ended December 31,
(In thousands)	2019		2018		2017
Research and development	$	2,812	$	5,560	$	9,683
Selling, general and administrative		10,814		15,692		23,131
Cost of sales		624		—		—
Total	$	14,250	$	21,252	$	32,814

A summary of share‑based compensation activity for the year ended December 31, 2019 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 December 31, 2018		8,194		$	29.81
Granted		3,006			4.48
Forfeited and expired		(730	)		23.88
Exercised		(2	)		16.00
Balance at December 31, 2019		10,469		$	22.96		5.3	$	3
Vested and expected to vest at December 31, 2019		10,399		$	23.08		5.3	$	3
Vested and exercisable at December 31, 2019		7,264		$	30.08		3.6		—

	Options Outstanding						Options Exercisable
Range of exercise price	Outstanding as of December 31, 2019 (In thousands)		Weighted- average remaining contractual life		Weighted- average exercise price		Exercisable as of December 31, 2019 (In thousands)		Weighted- average exercise price
$1.61 - $1.61		3		9.9	$	1.61		—	$	—
$1.81 - $2.41		2,335		9.6		2.41		—		—
$2.55 - $24.35		2,105		5.8		18.14		1,438		19.26
$24.45 - $30.46		2,503		3.5		28.17		2,342		28.25
$30.49 - $44.50		3,522		3.4		35.76		3,484		35.77
		10,468		5.3	$	22.96		7,264	$	30.08

Restricted Stock Activity

Restricted Stock	Number of Shares (In thousands)
Nonvested at December 31, 2018		231
Granted		628
Vested		(286	)
Forfeited		(148	)
Nonvested at December 31, 2019		425

Unrecognized compensation cost for unvested stock options and restricted stock awards as of December 31, 2019 totaled $14.7 million and is expected to be recognized over a weighted average period of approximately 1.9 years.

Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Debt

(10) Debt

New Convertible Senior Secured Notes Due 2024

On December 24, 2019, the Company completed the private exchange of $276.0 million aggregate principal amount of its outstanding 1.75% Convertible Senior Notes due 2021 (the “2021 Notes”) for a combination of newly-issued 6.00% Convertible Senior Secured Notes due 2024 (the “New Notes”) and cash. For each $1,000 principal amount of exchanged 2021 Notes, the Company issued $750 principal amount of the New Notes and made a cash payment of $200 (the “Exchange”). In the aggregate, the Company issued approximately $207.0 million aggregate principal amount of the New Notes and paid approximate $55.2 million in cash to participating holders. The Exchange was conducted with a limited number of institutional holders of the 2021 Notes pursuant to Exchange Agreements dated as of December 20, 2019 (each, an “Exchange Agreement”).

The New Notes were issued pursuant to an Indenture, dated as of December 23, 2019, among the Company, its wholly owned subsidiary, Civitas Therapeutics, Inc. (along with any domestic subsidiaries acquired or formed after the date of issuance, the “Guarantors”), and Wilmington Trust, National Association, as trustee and collateral agent (the “Indenture”). The New Notes are senior obligations of the Company and the Guarantors, secured by a first priority security interest in substantially all of the assets of the Company and the Guarantors, subject to certain exceptions described in the Security Agreement, dated as of December 23, 2019, between the grantors party thereto and Wilmington Trust, National Association, as collateral agent (the “Security Agreement”).

The New Notes will mature on December 1, 2024 unless earlier converted in accordance with their terms prior to such date. Interest on the New Notes will be payable semi-annually in arrears at a rate of 6.00% per annum on each June 1 and December 1, beginning on June 1, 2020. The Company may elect to pay interest in cash or shares of the Company’s common stock, subject to the satisfaction of certain conditions. If the Company elects to pay interest in shares of common stock, such common stock will have a per share value equal to 95% of the daily volume-weighted average price for the 10 trading days ending on and including the trading day immediately preceding the relevant interest payment date.

The New Notes will be convertible at the option of the holder into shares of common stock of the Company at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. The initial conversion rate for the New Notes is 285.7142 shares of the Company’s common stock per $1,000 principal amount of New Notes, representing an initial conversion price of approximately $3.50 per share of common stock. The conversion rate is subject to adjustment in certain circumstances as described in the Indenture.

The Company may elect to settle conversions of the New Notes in cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock. Holders who convert their New Notes prior to June 1, 2023 (other than in connection with a make-whole fundamental change) will also be entitled to an interest make-whole payment equal to the sum of all regularly scheduled stated interest payments, if any, due on such New Notes on each interest payment date occurring after the conversion date for such conversion and on or before June 1, 2023. In addition, the Company will have the right to cause all New Notes then outstanding to be converted automatically if the volume-weighted average price per share of the Company’s common stock equals or exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied.

Holders of the New Notes will have the right, at their option, to require the Company to purchase their New Notes if a fundamental change (as defined in the Indenture) occurs, in each case, at a repurchase price equal to 100% of the principal amount of the New Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

Notwithstanding the foregoing, the Company’s ability to settle conversions and make interest payments using shares of its common stock is subject to certain limitations set forth in the Indenture until the time, if any, that the Company’s stockholders have approved (i) the issuance of more than 19.99% of the Company’s outstanding shares in accordance with Nasdaq listing standards and (ii) an amendment to the Company’s certificate of incorporation to increase the number of authorized shares. The Company intends to seek stockholder approval of these matters at its 2020 Annual Meeting of Stockholders.

Subject to a number of exceptions and qualifications, the Indenture restricts the ability of the Company and certain of its subsidiaries to, among other things, (i) pay dividends or make other payments or distributions on their capital stock, or purchase, redeem, defease or otherwise acquire or retire for value any capital stock, (ii) make certain investments, (iii) incur indebtedness or issue preferred stock, other than certain forms of permitted debt, which includes, among other items, indebtedness incurred to refinance the 2021 Notes, (iv) create liens on their assets, (v) sell their assets, (vi) enter into certain transactions with affiliates or (vii) merge, consolidate or sell of all or substantially all of their assets. The Indenture also requires the Company to make an offer to repurchase the New Notes upon the occurrence of certain asset sales.

The Indenture provides that a number of events will constitute an event of default, including, among other things, (i) a failure to pay interest for 30 days, (ii) failure to pay the New Notes when due at maturity, upon any required repurchase, upon declaration of acceleration or otherwise, (iii) failure to convert the New Notes in accordance with the Indenture and the failure continues for five business days, (iv) not issuing certain notices required by the Indenture within a timely manner, (v) failure to comply with the other covenants or agreements in the Indenture for 60 days following the receipt of a notice of non-compliance, (vi) a default or other failure by the Company to make required payments under other indebtedness of the Company or certain subsidiaries having an outstanding principal amount of $30.0 million or more, (vii) failure by the Company or certain subsidiaries to pay final judgments aggregating in excess of $30.0 million, (viii) certain events of

bankruptcy or insolvency and (ix) the commercial launch in the United States of a product determined by the U.S. FDA to be bioequivalent to Inbrija. In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company, all outstanding New Notes will become due and payable immediately without further action or notice. If any other event of default occurs and is continuing, the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding new convertible notes may declare all the notes to be due and payable immediately.

The 2021 Notes received by the Company in the Exchange have been cancelled in accordance with their terms. Accordingly, upon completion of the Exchange, $69.0 million of the 2021 Notes remained outstanding.

The Company determined that the exchange of the 2021 Notes for New Notes qualified for a debt extinguishment and recognized a gain on extinguishment of $55.1 million for the year ended December 31, 2019, representing the difference between the fair value of the liability component immediately before the exchange and the carrying value of the debt. The Company recorded an adjustment of $38.4 million to additional paid-in capital to adjust the equity component of 2021 Notes in connection with the extinguishment.

The Company assessed all terms and features of the New Notes in order to identify any potential embedded features that would require bifurcation. As part of this analysis, the Company assessed the economic characteristics and risks of the New Notes, including the conversion, put and call features. Per the terms of the Indenture, the Company’s ability to settle conversions and make interest payments using shares of its common stock is limited until such time as the Company’s stockholders have approved a waiver of a share limit imposed under Nasdaq rules and a necessary increase in the number of authorized shares of common stock. The Company has until July 31, 2020 to obtain the necessary stockholder approvals and, prior to the earlier of July 31, 2020 and the date such approvals are received, the Company is entitled to settle conversions and make interest whole payments using shares of common stock, and is not required to make cash payments with respect to shares of common stock that are not delivered due to the applicable share limits. In consideration of these provisions, the Company concluded the conversion feature required bifurcation as a derivative. The fair value of the conversion feature derivative was determined based on the difference between the fair value of the New Notes with the conversion option and the fair value of the New Notes without the conversion option. The Company employed a Monte Carlo simulation approach and determined that the fair value of the derivative upon issuance of the New Notes was $59.4 million and recorded this amount as a derivative liability with an offsetting amount as a debt discount as a reduction to the carrying value of the Notes on the closing date, or December 24, 2019. The conversion feature will be measured at fair value on a quarterly basis and the change in the fair value of the conversion feature for the period will be recorded on the consolidated statements of operations. The Company determined that the change in fair value from December 24, 2019 to December 31, 2019 was not material.

The outstanding New Note balance as of December 31, 2019 consisted of the following:

(In thousands)	December 31, 2019
Liability component:
Principal	$	207,000
Less: debt discount and debt issuance costs, net		(80,028	)
Net carrying amount		126,972
Derivative liability-conversion Option	$	59,409

The Company determined that the expected life of the New Notes was equal to the period through December 1, 2024 as this represents the point at which the New Notes will mature unless earlier converted in accordance with their terms prior to such date. Accordingly, the total debt discount of $75.1 million, inclusive of the fair value of the embedded conversion feature derivative at issuance, is being amortized using the effective interest method through December 1, 2024. For the year ended December 31, 2019, the Company recognized $0.5 million of interest expense related to the New Notes at the effective interest rate of 18.01%. The fair value of the Company’s New Notes was approximately $210.6 million as of December 31, 2019.

In connection with the issuance of the Notes, the Company incurred approximately $5.2 million of debt issuance costs, which primarily consisted of underwriting, legal and other professional fees, and allocated these costs to the liability component and recorded as a reduction in the carrying amount of the debt liability on the balance sheet. The portion allocated to the New Notes is amortized to interest expense over the expected life of the 2024 Notes using the effective interest method.

Convertible Senior Notes Due 2021

On June 17, 2014, the Company issued $345 million aggregate principal amount of 1.75% Convertible Senior Notes due 2021 (the 2021 Notes) in an underwritten public offering. The net proceeds from the offering were $337.5 million after deducting the Underwriter’s discount and offering expenses paid by the Company. On December 24, 2019, the Company completed the private exchange of $276.0 million aggregate principal amount of its outstanding 2021 Notes for a combination of newly-issued 6.00% Convertible Senior Secured Notes due 2024 (the “New Notes”) and cash. The 2021 Notes received by the Company in the exchange have been cancelled in accordance with their terms. Accordingly, upon completion of the exchange, $69.0 million of the 2021 Notes remained outstanding.

The 2021 Notes are convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, under certain circumstances as outlined in the indenture, based on an initial conversion rate, subject to adjustment, of 23.4968 shares per $1,000 principal amount of the 2021 Notes (representing an initial conversion price of approximately $42.56 per share).

The Company may redeem for cash all or part of the 2021 Notes, at the Company’s option, on or after June 20, 2017, under certain circumstances as outlined in the indenture.

The Company pays 1.75% interest per annum on the principal amount of the 2021 Notes, payable semiannually in arrears in cash on June 15 and December 15 of each year. The 2021 Notes will mature on June 15, 2021.

If the Company undergoes a “fundamental change” (as defined in the Indenture), subject to certain conditions, holders may require the Company to repurchase for cash all or part of their 2021 Notes in principal amounts of $1,000 or an integral multiple thereof. The Indenture contains customary terms and covenants and events of default. If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding 2021 Notes by notice to the Company and the Trustee, may declare 100% of the principal of and accrued and unpaid interest, if any, on all the 2021 Notes to be due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company, 100% of the principal and accrued and unpaid interest, if any, on all of the 2021 Notes will become due and payable automatically. Notwithstanding the foregoing, the Indenture provides that, to the extent the Company elects and for up to 270 days, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right to receive additional interest on the 2021 Notes.

The 2021 Notes will be senior unsecured obligations and will rank equally with all of the Company’s existing and future senior debt and senior to any of the Company’s subordinated debt. The 2021 Notes will be structurally subordinated to all existing or future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries and will be effectively subordinated to the Company’s existing or future secured indebtedness to the extent of the value of the collateral. The Indenture does not limit the amount of debt that the Company or its subsidiaries may incur.

In accounting for the issuance of the 2021 Notes, the Company separated the 2021 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the 2021 Notes as a whole. The equity component is not re-measured as long as it continues to meet the conditions for equity classification.

The outstanding note balance as of December 31, 2019 and 2018 consisted of the following:

(In thousands)	December 31, 2019			December 31, 2018
Liability component:
Principal	$	69,000		$	345,000
Less: debt discount and debt issuance costs , net		(3,198	)		(26,330	)
Net carrying amount		65,802		$	318,670
Equity component	$	22,791		$	61,195

In connection with the issuance of the 2021 Notes, the Company incurred approximately $7.5 million of debt issuance costs, which primarily consisted of underwriting, legal and other professional fees, and allocated these costs to the liability and equity components based on the allocation of the proceeds. Of the total $7.5 million of debt issuance costs, $1.3 million were allocated to the equity component and recorded as a reduction to additional paid-in capital and $6.2 million were allocated to the liability component and recorded as a reduction in the carrying amount of the debt liability on the balance sheet. The portion allocated to the liability component is amortized to interest expense over the expected life of the 2021 Notes using the effective interest method. The Company wrote off $1.2 million of issuance cost associated with the exchange of the 2021 Notes.

The Company determined the expected life of the debt was equal to the seven year term on the 2021 Notes. The fair value of the Company’s convertible senior notes was approximately $52.1 million as of December 31, 2019.

As of December 31, 2019, the remaining contractual life of the 2021 Notes is approximately 1.5 years. The effective interest rate on the liability component was approximately 4.8% for the period from the date of issuance through December 31, 2019.

The following table sets forth total interest expense recognized related to the 2021 Notes for the years ended December 31, 2019 and 2018:

(In thousands)	Year ended December 31, 2019		Year ended December 31, 2018
Contractual interest expense	$	5,957	$	6,038
Amortization of debt issuance costs		944		913
Amortization of debt discount		9,258		8,952
Total interest expense	$	16,159	$	15,903

Non-Convertible Capital Loan

Prior to and subsequent to the acquisition of Biotie on April 18, 2016, Biotie held non-convertible capital loans granted by Business Finland (formerly Tekes). The non-convertible capital loans had an adjusted acquisition-date fair value of $20.5 million (€18.2 million) and a carrying value of $24.9 million as of December 31, 2019. The loans comprised fourteen non-convertible loans. The loans bear interest based on the greater of 3% or the base rate set by Finland’s Ministry of Finance minus one (1) percentage point. The maturity dates of the loans range from eight to ten years from the date of issuance, however, according to certain terms and conditions of the loans, the Company may repay the principal and accrued and unpaid interest of the loans only when the consolidated retained earnings of Biotie is sufficient to fully repay the loans.

Research and Development Loans

Research and Development Loans (“R&D Loans”) were granted by Business Finland with an acquisition-date fair value of $2.9 million (€2.6 million) and a carrying value of $1.2 million as of December 31, 2019. 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 began in January 2017. The loan principal will be paid in equal annual installments over a 5 year period, ending January 2021.

Letters of Credit

As of December 31, 2019, the Company has $0.3 million of cash collateralized standby letters of credit outstanding (see Note 2).

Liability Related to Sale of Future Royalties

12 Months Ended

Dec. 31, 2019

Deferred Revenue Disclosure [Abstract]

(11) Liability Related to Sale of Future Royalties

As of October 1, 2017, the Company completed a royalty purchase agreement with HealthCare Royalty Partners, or HCRP (“Royalty Agreement”). In exchange for the payment of $40 million to the Company, HCRP obtained the right to receive Fampyra royalties payable by Biogen under the License and Collaboration Agreement between the Company and Biogen, up to an agreed upon threshold of royalties. When this threshold is met, if ever, the Fampyra royalty revenue will

revert back to the Company and the Company will continue to receive the Fampyra royalty revenue from Biogen until the revenue stream ends. The transaction does not include potential future milestones to be paid.

The Company maintained the rights under the license and collaboration agreement with Biogen, therefore, the Royalty Agreement has been accounted for as a liability that will be amortized using the effective interest method over the life of the arrangement, in accordance with the relevant accounting guidance. The Company recorded the receipt of the $40 million payment from HCRP and established a corresponding liability in the amount of $40 million, net of transaction costs of approximately $2.2 million. The net liability is classified between the current and non-current portion of liability related to sale of future royalties in the consolidated balance sheets based on the recognition of the interest and principal payments to be received by HCRP in the next 12 months from the financial statement reporting date. The total net royalties to be paid, less the net proceeds received will be recorded to interest expense using the effective interest method over the life of the royalty agreement. The Company will estimate the payments to be made to HCRP over the term of the Agreement based on forecasted royalties and will calculate the interest rate required to discount such payments back to the liability balance. Over the course of the Royalty Agreement, the actual interest rate will be affected by the amount and timing of net royalty revenue recognized and changes in forecasted revenue. On a quarterly basis, the Company will reassess the effective interest rate and adjust the rate prospectively as necessary.

The following table shows the activity within the liability account for the years ended December 31, 2019 and December 2018.

(In thousands)	December 31, 2019			December 31, 2018
Liability related to sale of future royalties - beginning balance	$	30,716		$	35,788
Deferred transaction costs amortized		639			784
Non-cash royalty revenue payable to HCRP		(10,271	)		(10,291	)
Non-cash interest expense recognized		3,317			4,435
Liability related to sale of future royalties - ending balance	$	24,401		$	30,716

The interest and debt discount amortization expense is reflected as interest and amortization of debt discount expense in the Statement of Operations.

Corporate Restructuring

12 Months Ended

Dec. 31, 2019

Restructuring And Related Activities [Abstract]

Corporate Restructuring

(12) Corporate Restructuring

On October 23, 2019, the Company announced a corporate restructuring to reduce costs and focus our resources on the commercial launch of Inbrija. As part of the restructuring, the Company reduced headcount by approximately 25% through a reduction in force. The majority of the reduction took place in the fourth quarter of 2019 immediately after the announcement, and the remainder will be completed by the first quarter of 2020.

In April 2017, the Company announced a corporate restructuring to reduce its cost structure and focus its resources on its then late-stage program, Inbrija. The adoption of this restructuring plan followed the previously announced decision by the United States District Court for the District of Delaware invalidating certain patents pertaining to Ampyra. As part of this restructuring, the Company reduced headcount by approximately 20%.

For the years ended December 31, 2019, December 31, 2018 and December 2017, the Company incurred pre-tax severance and employee separation related expenses of approximately $4.4 million, $1.3 million and $7.6 million, respectively associated with the restructuring. Of the pre-tax severance and employee separation related expenses incurred, $1.4 million, $1.2 million and $5.5 million were recorded in research and development expenses and $3.0 million, $0.1 million and $2.1 million were recorded in selling, general and administrative expenses for the years ended December 31, 2019, December 31, 2018, and December 31, 2017, respectively.

A summary of the restructuring costs for the years ended December 31, 2019 and 2018 is as follows:

(In thousands)	Restructuring Costs
Restructuring Liability as of December 31, 2017	$	504
2018 Restructuring costs		1,316
2018 Payments		(1,820	)
Restructuring Liability as of December 31, 2018	$	—
2019 Restructuring costs		4,401
2019 Payments		(3,137	)
Restructuring Liability as of December 31, 2019	$	1,264

Accrued Expenses and Other Current Liabilities

12 Months Ended

Dec. 31, 2019

Accrued Expenses And Other Current Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

(13) Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

(In thousands)	December 31, 2019		December 31, 2018
Product allowances accruals	$	17,855	$	26,931
Bonus payable		3,211		18,381
Accrued inventory		—		14,254
Sales force commissions and incentive payments payable		1,123		3,453
Administrative expenses		1,582		2,651
Vacation accrual		2,146		2,395
Research and development expense accruals		1,364		2,374
Commercial and marketing expense accruals		3,202		1,933
Royalties payable		580		509
Other accrued expenses		8,014		4,001
Total	$	39,077	$	76,882

Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

(14) 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, operating leases and commitments to purchase inventory. The following table summarizes the contractual obligations at December 31, 2019 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) (3) (7)
(In thousands)	Total		Less than 1 year		1-3 years		4-5 years
Convertible Senior Notes (2)	$	320,198	$	13,628	$	94,394	$	212,176
Research and development loans (4)		1,206		603		603		—
Operating leases (5)		31,723		7,637		17,872		6,214
Inventory purchase commitments (6)		2,798		2,798		—		—
Total	$	355,925	$	24,666	$	112,869	$	218,390

(1)	Excludes a liability for uncertain tax positions totaling $7.1 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 new convertible senior secured notes due 2024 issued in December 2019. The notes will mature and will be payable on June 15, 2021 and December 31, 2024, respectively. See Note 10.

(3)	Excludes a liability for the non-convertible capital loans totaling $24.9 million. The non-convertible capital loans have a stated maturity of less than one year. However, the repayment of the non-convertible capital loans and payment of

accrued interest thereon are governed by a restrictive condition, according to which the loan principal may only be repaid if Biotie’s consolidated restricted equity is fully covered. Accrued interest may 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. 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.

(4)	Represents the future principal payments on the R&D loans acquired with Biotie. The repayment is made in equal annual installment with last payment due in January 2021. See Note 10.

(5)	Represents payments for the operating leases of the Company’s Ardsley, NY headquarters, the Company’s manufacturing facility in Chelsea, MA, and lab and office space in Waltham, MA, and excludes field auto leases which are for a one year term. See Note 3.

(6)

Represents Ampyra and Inbrija inventory purchase 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. In each of the 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.

(7)

Pursuant to the UCB Termination and Transition Agreement, Biotie is required to pay up to $4.1 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.

License Agreements

Under the Company’s Ampyra license agreement with Alkermes, the Company is obligated to make milestone payments to Alkermes of up to $15.0 million over the life of the contract and royalty payments as a percentage of net product sales and the quantity of product shipped by Alkermes to Acorda. Further milestone amounts are payable in connection with additional indications.

Under the Company’s Ampyra supply agreement with Alkermes, payments for product manufactured by Alkermes are calculated as a percentage of net product sales and the quantity of product shipped by Alkermes to Acorda. Under this agreement, Acorda also has the option to purchase up to an agreed upon quantity of product from a second source. However, if Acorda obtains supply from the second source, Acorda must make a compensating payment to Alkermes for the quantities of product provided by the second source.

Under the Company’s license agreement with Rush-Presbyterian-St. Luke’s Medical Center, it was obligated to make royalty payments as a low single digit percentage of net Ampyra and Fampyra sales in the United States and in countries other than the United States. The Company believes this license agreement and the royalty obligations expired in 2018.

Under the Company’s supply agreement with Alkermes, it provides Alkermes with monthly written 18-month forecasts, and annual written five-year forecasts for its supply requirements of Ampyra. In each of the three months for Ampyra following the submission of its written 18-month forecast, the Company is obligated to purchase the quantity specified in the forecast, even if its actual requirements are greater or less. Inventory purchase commitments were $2.8 million as of December 31, 2019.

In addition, under the Company’s various other research, license and collaboration agreements with other parties, it is obligated to make milestone payments of up to an aggregate of approximately $41.6 million over the life of the contracts.

Under certain agreements, we are required to pay royalties for the use of technologies and products in our R&D activities and in the commercialization of products. The amount and timing of any of the foregoing payments are not known due to the uncertainty surrounding the successful research, development and commercialization of the products.

Employment Agreements

The Company has employment agreements with all of its executive officers which provide for, among other benefits, certain severance, bonus and other payments and COBRA premium coverage, as well as certain rights relating to their equity compensation awards, if their employment is terminated for reasons other than cause or if they terminate their employment for good reason (as those terms are defined in the agreements). The agreements also provide for certain increased rights if their employment terminates following a change in control (as defined in the agreements). Our contractual commitments table does not include these severance payment obligations.

Other

The Company may be, from time to time, party to various disputes and claims arising from normal business activities. The Company accrues for amounts related to legal matters if it is probable that a liability has been incurred and the amount is reasonably estimable. While existing disputes and claims may lead to losses, the Company cannot estimate any ranges of potential losses as of December 31, 2019. As a result, the Company did not record any loss contingencies for any of these matters. While the outcome of existing disputes and claims is uncertain, the Company does not expect that the resolution of existing disputes and claims would have a material adverse effect on its consolidated financial position or liquidity or the Company’s consolidated results of operations. Litigation expenses are expensed as incurred.

Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

(15) Fair Value Measurements

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. The Company bases fair value on the assumptions market participants would use when pricing the asset or liability.

The Company utilizes a fair value hierarchy which requires it to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company primarily applies the market approach for recurring fair value measurements. There were no changes in valuation techniques during the year ended December 31, 2019. The standard describes three levels of inputs that may be used to measure fair value:

•

Level 1 Quoted prices in active markets for identical assets or liabilities.

•

Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Recurring

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and December 31, 2018, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

(In thousands)	Level 1		Level 2		Level 3
2019
Assets Carried at Fair Value:
Money market funds	$	2,219	$	—	$	—
Commercial paper		—		26,569		—
Corporate bonds		—		37,185		—
Liabilities Carried at Fair Value:
Acquired contingent consideration		—		—		80,300
Derivative liability - conversion option		—		—		59,409
2018
Assets Carried at Fair Value:
Money market funds	$	9,586	$	—	$	—
Commercial paper				47,108
Corporate bonds				104,881
Liabilities Carried at Fair Value:
Acquired contingent consideration		—		—		168,000

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.

Acquired contingent consideration

(In thousands)	Year ended December 31, 2019			Year ended December 31, 2018
Acquired contingent consideration:
Balance, beginning of period	$	168,000		$	113,000
Fair value change to contingent consideration (unrealized) included in the statement of operations		(86,935	)		55,000
Royalty payments		(765	)		—
Balance, end of period	$	80,300		$	168,000

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 Inbrija (levodopa inhalation powder), an FDA approved drug for the treatment of OFF periods of Parkinson’s disease. Using this approach, expected future cash flows are calculated over the expected life of the agreement and discounted to estimate the current value of the liability at the period end date. Some of the more significant assumptions made in the valuation include (i) the estimated revenue forecasts for Inbrija, and (ii) discount period and rate. The milestone payment outcomes ranged from $0 to $45 million for Inbrija. The valuation is performed quarterly and changes to the fair value of the contingent consideration are included in the statement of operations. For the year ended December 31, 2019, changes in the fair value of the acquired contingent consideration were primarily due to the updates to certain estimated assumptions and recalculation of cash flows for the passage of time. Refer to Note 16 for more information about the Alkermes ARCUS agreement.

The acquired contingent consideration has been 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 sales estimates for Inbrija and estimated discount rates, the estimated fair value could be significantly higher or lower than the fair value determined.

Derivative Liability-Conversion Option

The following table represents a reconciliation of the derivative liability recorded in connection with the issuance of the new convertible senior secured notes due 2024:

(In thousands)	Year ended December 31, 2019
Derivative Liability-Conversion Option
Balance, beginning of period	$	—
Fair value recognized upon issuance of Convertible Senior Notes		59,409
Fair value adjustment		—
Balance, end of period	$	59,409

During 2019, a derivative liability was initially recorded as a result of the issuance of the 6.00% Convertible Senior Secured Notes due 2024 (see Note 10). The fair value measurement of the derivative liability is classified as Level 3 under the fair value hierarchy as it has been valued using certain unobservable inputs. These inputs include: (1) share price as of the valuation date, (2) assumed timing of conversion of the Notes, (3) historical volatility of share price and (4) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Significant increases or decreases in any of those inputs in isolation could result in a significantly lower or higher fair value measurement. The fair value of the derivative liability was determined using a Monte Carlo simulation approach by calculating the fair value of the Notes with the conversion feature as compared to the fair value of the Notes without the conversion feature, with the difference representing the value of the conversion feature, or the derivative liability. The conversion feature will be measured at fair value on a quarterly basis and the change in the fair value of the conversion feature for the period will be recorded on the consolidated statements of operations. The Company determined that the change in the fair value of the conversion option from December 24, 2019 to December 31, 2019 was not material.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

License, Research and Collaboration Agreements

12 Months Ended

Dec. 31, 2019

Collaborative Arrangement Disclosure [Abstract]

License, Research and Collaboration Agreements

(16) License, Research and Collaboration Agreements

Alkermes plc

The Company is a party to a 2003 amended and restated license agreement and a 2003 supply agreement with Alkermes for Ampyra (“Agreement”). Under the license agreement, the Company has exclusive worldwide rights to Ampyra, as well as Alkermes’ formulation for any other mono or di-aminopyridines, for all indications, including multiple sclerosis and spinal cord injury. The Company is obligated to pay Alkermes milestone payments and royalties based on a percentage of net product sales and the quantity of product shipped by Alkermes to Acorda.

Subject to early termination provisions, the Alkermes license terminates on a country by country basis on the latter to occur of fifteen years from the date of the agreement, the expiration of the last Alkermes patent to expire or the existence of competition in that country.

Under the supply agreement, Alkermes has the right to manufacture for the Company, subject to certain exceptions, Ampyra and other products covered by these agreements at specified prices calculated as a percentage of net product sales of the product shipped by Alkermes to Acorda. In the event Alkermes does not manufacture 100% of the products, it is entitled to a compensating payment for the quantities of product provided by the alternative manufacturer.

Supply Agreement

The Company is a party to a 2003 supply agreement with Alkermes relating to the manufacture and supply of Ampyra by Alkermes. The Company is obligated to purchase at least 75% of its 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 Acorda. In those circumstances, where the Company elects to purchase less than 100% of its requirements from Alkermes, the Company is obligated to make certain compensatory payments to Alkermes. Alkermes is required to assist the Company in qualifying a second manufacturer to manufacture and supply the Company with Ampyra subject to its obligations to Alkermes.

As permitted by the agreement with Alkermes, the Company has designated Patheon, Inc. (Patheon) as a qualified second manufacturing source of Ampyra. In connection with that designation, the Company entered into a manufacturing agreement with Patheon, and Alkermes assisted the Company in transferring manufacturing technology to Patheon. The Company and Alkermes have agreed that a purchase of up to 25% of annual requirements from Patheon is allowed if compensatory payments are made to Alkermes. In addition, Patheon may supply the Company with Ampyra if Alkermes is unable or unwilling to meet the Company’s requirements. The Company did not make any compensatory payment in 2019 or 2018.

Rush-Presbyterian St. Luke’s Medical Center

The Company 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.

Under the Company’s license agreement with Rush-Presbyterian-St. Luke’s Medical Center, the Company was obligated to make royalty payments as a low single digit percentage of net Ampyra and Fampyra sales in the United States and in countries other than the United States. The Company believes the license and the royalty obligations expired in 2018.

As of December 31, 2019, 2018 and 2017, the Company made or accrued royalty payments totaling $0.0 million, $66.6 million and $59.9 million, respectively.

Biogen Inc.

The Company has an exclusive collaboration and license agreement with Biogen Inc., (Biogen) 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 was granted the exclusive right to commercialize Ampyra and other products containing aminopyridines developed under that agreement in all countries outside of the U.S., which grant includes a sublicense of the Company’s rights under an existing license agreement between the Company and Alkermes plc (Alkermes). Biogen 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 (the Supply Agreement), pursuant to which the Company will supply Biogen with its requirements for the licensed products through the Company’s existing supply agreement with Alkermes.

Under the Collaboration Agreement, the Company received an upfront payment of $110.0 million in July 2009, and a $25 million milestone payment in August 2011 upon approval of the product in the European Union. The Company is also entitled to receive additional payments based on the successful achievement of future regulatory and sales milestones. Biogen is also required to make double-digit tiered royalty payments to the Company on ex-U.S. sales. Also under the terms of the Collaboration Agreement, the Company will participate in overseeing the development and commercialization of Ampyra and other licensed products in markets outside the U.S. Acorda will continue to develop and commercialize Ampyra independently in the U.S.

As of June 30, 2009, the Company recorded deferred revenue of $110.0 million for the upfront payment from Biogen under the Collaboration Agreement. Also, as a result of such payment to Acorda, a payment of $7.7 million was made to Alkermes and recorded as a deferred expense.

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. Accordingly, the Company has 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 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 know-how 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 recognized the non-refundable upfront payment from Biogen as revenue and the associated payment to Alkermes as expense ratably over the estimated term of regulatory exclusivity for the licensed products under the Collaboration Agreement as the Company had determined this was the most probable expected benefit period. The Company recognized $9.1 million in amortized license revenue, a portion of the $110.0 million received from Biogen, and $0.6 million in cost of license revenue, a portion of the $7.7 million paid to Alkermes, during each of the years ended December 31, 2017 and 2016. On January 1, 2018, we adopted the new accounting standard ASC 606, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and the related amendments to all contracts with customers that were not completed as of the date of adoption using the modified retrospective method. As a result of the adoption of ASC 606, the Company determined that the revenue recognition methodology for the deferred license revenue changed under the new guidance. License revenue recorded by the Company prior to January 1, 2018 related exclusively to the recognition of the upfront payment received from Biogen upon the execution of the License and Collaboration agreement that granted Biogen an exclusive non sub-licensable license to sell Fampyra outside of the U.S. License revenue recorded prior to January 1, 2018 was recognized under ASC 605 on a pro rata basis as the Company’s obligations were satisfied throughout the duration of the license and collaboration agreement. As of January 1, 2018, the Company adopted ASC 606 which changed the Company’s determination of its distinct performance obligations resulting in an acceleration of the recognition of the revenue in the arrangement. The material performance obligations were completed prior to January 1, 2018, and as a result, the Company recognized its previously deferred revenue as a cumulative effect adjustment of $27.6 million within the beginning accumulated deficit balance on the consolidated balance sheet as of January 1, 2018 (See Note 2).

Actavis/Watson

Prior to the Company’s sale of its Zanaflex assets, the Company had an agreement with Actavis, a subsidiary of Teva Pharmaceuticals and formerly Watson Pharma, to market tizanidine hydrochloride capsules, an authorized generic version of Zanaflex Capsules, which was launched in February 2012. In accordance with the agreement, the Company received a royalty based on Actavis’ gross margin, as defined by the agreement, of the authorized generic product. During the year ended December 31, 2017, the Company recognized royalty revenue of $2.6 million related to the gross margin of the Zanaflex Capsule authorized generic. During the year ended December 31, 2017, the Company also recognized revenue and a corresponding cost of sales of $3.0 million , related to the purchase and sale of the related Zanaflex Capsule authorized generic product to Actavis, which is recorded in net product revenues and cost of sales.

Alkermes (ARCUS products)

In December 2010, Civitas, the Company’s wholly-owned subsidiary, entered into the Asset Purchase and License Agreement (“Alkermes Agreement”), in which Civitas licensed or acquired from Alkermes certain pulmonary development programs and INDs, underlying intellectual property and laboratory equipment associated with the pulmonary business of Alkermes. The assets acquired includes (i) patents, patent applications and related know-how and documentation; (ii) a formulation of inhaled L-dopa; (iii) several other pulmonary development programs and INDs, which are part of the platform device and formulation IP; (iv) instruments, laboratory equipment and apparatus; and (v) inhalers, inhaler molds, tools, and the associated assembled equipment. In addition, Civitas leased the facility where the Alkermes operations were previously housed in Chelsea, Massachusetts.

Under the terms of the Alkermes Agreement, Civitas will also pay to Alkermes royalties for each licensed product as follows: (i) for all licensed products sold by Civitas, Civitas will pay Alkermes a mid-single digit percentage of net sales of such licensed products and (ii) for all licensed products sold by a collaboration partner, Civitas will pay Alkermes the lower of a mid-single digit percentage of net sales of such licensed products in a given calendar year or a percentage in the low-to-mid-double digits of all collaboration partner revenue received in such calendar year. Notwithstanding the foregoing, in no event shall the royalty paid be less than a low-single digit percentage of net sales of a licensed product in any calendar year.

As consideration for the agreement with Alkermes, Civitas issued stock and also agreed to pay Alkermes royalties on future net product sales from products developed from licensed technology under the Alkermes Agreement. The fair value of the future royalties is classified as contingent consideration. The Company estimates the fair value of this contingent consideration based on future revenue projections and estimated probabilities of receiving regulatory approval and

commercializing such products. Refer to Note 15 – Fair Value Measurements for more information about the contingent consideration liability.

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

(17) Income Taxes

On December 22, 2017, the U.S. enacted Public Law No. 115-97 ("Act"), originally introduced as the Tax Cuts and Jobs Act, which significantly modified the Internal Revenue Code. The Act reduced the U.S. federal corporate tax rate from 35.0% to 21.0%, created a territorial-type tax system with an exemption for foreign dividends, and imposed a one-time deemed repatriation tax on a U.S. company's historical undistributed earnings and profits of foreign affiliates. Among other provisions, the Act also increased expensing for certain business assets, created new taxes on certain foreign sourced earnings, adopted limitations on business interest expense deductions, repealed deductions for income attributable to domestic production activities, and added other anti-base erosion rules. The effective dates for the provisions set forth in the Act vary as to when the provisions will apply to the Company.

In response to the Act, the U.S. Securities and Exchange Commission ("SEC") provided guidance by issuing Staff Accounting Bulletin No. 118 ("SAB 118"), which has since been codified by the release of ASU No. 2018- 05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. ASU 2018-05 allows companies to record provisional amounts during a measurement period with respect to the impacts of the Act for which the accounting requirements under ASC Topic 740 are not complete, but a reasonable estimate has been determined. The measurement period under ASU 2018-05 ends when a company has obtained, prepared, and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740, but cannot exceed one year.

As of December 31, 2018, the Company has completed the accounting for the effects of the Act. The Company has included the impact of the Act on its annual effective tax rate and has recorded a total tax benefit of $14.8 million for the remeasurement of deferred tax assets and liabilities, of which $1.6 million of the benefit was recorded in the fourth quarter of 2018.

The domestic and foreign components of (loss) income before income taxes were as follows:

(In thousands)	Year ended December 31, 2019			Year ended December 31, 2018		Year ended December 31, 2017
Domestic	$	(182,816	)	$	19,211	$	(172,560	)
Foreign		(91,432	)		1,212		(79,325	)
Total	$	(274,248	)	$	20,423	$	(251,885	)

The benefit from income taxes in 2019, 2018 and 2017 consists of current and deferred federal, state and foreign taxes as follows:

(In thousands)	Year ended December 31, 2019			Year ended December 31, 2018			Year ended December 31, 2017
Current:
Federal	$	—		$	2,991		$	(11,948	)
State		(621	)		(4,143	)		(12,653	)
Foreign		(75	)		(93	)		(91	)
		(696	)		(1,245	)		(24,692	)
Deferred:
Federal		888			13,790			42,322
State		1,090			714			5,377
Foreign		—			—			5,519
		1,978			14,504			53,218
Total benefit from income taxes	$	1,282		$	13,259		$	28,526

As of December 31, 2019, Acorda’s U.S. consolidated tax return has a federal NOL carryforward of approximately $94.1 million which can be carried forward indefinitely and, under the Act, limited to 80% of taxable income in any year in which it will be utilized. Biotie Therapies, Inc. (“Biotie US”), which files a separate company federal income tax return has

an NOL carryforward of approximately $120.0 million as of December 31, 2019. The Biotie US NOLs are offset entirely by a valuation allowance and are expected to begin to expire in 2026. The Company’s capital loss carryforward of approximately $428.6 million is fully offset with a valuation allowance. The Company had available state NOL carryforwards of approximately $220.3 million, $170.1 million and $167.9 million as of December 31, 2019, 2018 and 2017, respectively. The state losses are expected to begin to expire in 2027, although not all states conform to the federal carryforward period and occasionally limit the use of net operating losses for a period of time. The Company has $56.6 million of net operating loss carryforwards outside of the U.S. as of December 31, 2019, that begin to expire in 2029 all of which are fully reserved with a valuation allowance.

The Company’s research and development and orphan drug credit carry-forwards of $16.3 million and $17.1 million as of December 31, 2019 and 2018, respectively, begin to expire in 2031. The Company does not expect to pay cash taxes in various U.S. states as they are in a current year taxable loss. The Company generated a tax liability for its operations in Puerto Rico.

As of December 31, 2019, the Company is expecting a total refund from unused alternative minimum tax credits of $0.1 million, half of which was claimed in the prior year and the remainder which under the Act will become refundable by 2021.

The Internal Revenue Code of 1986 contains certain provisions that can limit a taxpayer's ability to utilize net operating loss and tax credit carryforwards in any given year resulting from cumulative changes in ownership interests in excess of 50 percent over a three-year period. These provisions were unchanged by the Act. As of December 31, 2019, based on a completed IRC Section 382 analysis, the Company was subject to limitation triggered by the acquisition of Biotie US. which resulted in an estimated $31.4 million of unused federal net operating loss carryforwards and $5.1 million of unused federal credit carryforwards expiring before they can be utilized. Future ownership changes may further limit the use of these carryforwards. Under the Act, U.S. net operating losses generated after December 31, 2017 can be carried forward indefinitely.

The temporary differences between the book and tax treatment of income and expenses results in deferred tax assets and liabilities, which are included within the consolidated balance sheet. The Company must assess the likelihood that any recorded deferred tax assets will be recovered against future taxable income. To the extent the Company believes it is more likely than not that any portion of the deferred tax asset will not be recoverable, a valuation allowance must be established. To the extent the Company establishes a valuation allowance or changes the allowance in a future period, income tax expense will be impacted. The Company continued to maintain a full valuation allowance against its net U.S. and net foreign deferred tax assets of Biotie at December 31, 2019. The Company had a net increase of $106.0 million of valuation allowance primarily related to a capital loss carryforward and net deferred tax assets in states where Acorda files a stand alone tax return.

The reconciliation of the statutory U.S. federal income tax rate to the Company’s effective income tax rate is as follows:

	Year ended December 31, 2019			Year ended December 31, 2018			Year ended December 31, 2017
U.S. federal statutory tax rate		21.0	%		21.0	%		35.0	%
State and local income taxes		0.1	%		8.7	%		(0.1	)%
Stock option compensation		—			0.7	%		(0.5	)%
Stock option shortfall		(0.8	)%		12.6	%		(1.5	)%
Research and development and orphan drug credits		—			5.6	%		1.2	%
Uncertain tax positions		0.0	%		(0.7	)%		(0.3	)%
Other nondeductible and permanent differences		(0.1	)%		(5.0	)%		(0.4	)%
Cancellation of debt Income		2.9	%		—			—
Goodwill impairment		(21.2	)%		0.0	%		0.0	%
Valuation allowance, net of foreign tax rate differential		(35.1	)%		(107.9	)%		(19.8	)%
NOL write-off		—			16.6	%		—
Federal return to provision differences		33.7	%		(16.6	)%		—
Tax reform		—			—			(2.3	)%
Effective income tax rate		0.5	%		(65.0	)%		11.3	%

The Company’s overall effective tax rate is affected primarily by the non-deductible goodwill impairment and the federal return to provision difference primarily related to a capital loss deduction which is fully offset by a valuation allowance.

Provisions have been made for deferred taxes based on the differences between the basis of the assets and liabilities for financial statement purposes and the basis of the assets and liabilities for tax purposes using currently enacted tax rates and regulations that will be in effect when the differences are expected to be recovered or settled. The components of the deferred tax assets and liabilities are as follows:

(In thousands)	December 31, 2019			December 31, 2018
Deferred tax assets:
Net operating loss carryforward	$	69,756		$	51,543
Capital loss carryforward		106,031			—
Tax credits		14,351			19,401
Stock based compensation		23,009			22,733
Contingent consideration		18,457			38,594
Employee compensation		1,329			3,677
Rebate and returns reserve		3,584			5,798
Capitalized R&D		10,576			10,791
Derivative liability		14,696			—
Other		15,827			13,881
Total deferred tax assets	$	277,616		$	166,418
Valuation allowance		(177,572	)		(71,570	)
Total deferred tax assets net of valuation allowance	$	100,044		$	94,848
Deferred tax liabilities:
Intangible assets		(89,629	)		(94,771	)
Convertible debt		(19,242	)		(5,971	)
Depreciation		(583	)		(1,256	)
Other		(171	)		(333	)
Total deferred tax liabilities	$	(109,625	)	$	(102,331	)
Net deferred tax liability	$	(9,581	)	$	(7,483	)

The Company follows authoritative guidance regarding accounting for uncertainty in income taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The beginning and ending amounts of unrecognized tax benefits reconciles as follows:

(In thousands)	Year ended December 31, 2019			Year ended December 31, 2018			Year ended December 31, 2017
Beginning of period balance	$	7,258		$	7,397		$	6,856
Increases for tax positions taken during a prior period		—			55			687
Decreases for tax positions taken during a prior period		(113	)		(194	)		(146	)
Increases for tax positions taken during the current period		—			—			—
	$	7,145		$	7,258		$	7,397

Due to the amount of the Company’s tax credit carryforwards, it has not accrued interest relating to these unrecognized tax benefits. Accrued interest and penalties, however, would be disclosed within the related liabilities lines in the consolidated balance sheet and recorded as a component of income tax expense. All of its unrecognized tax benefits, if recognized, would impact the effective tax rate.

The Company is no longer subject to federal income tax audits for tax years prior to 2016, however, such net operating losses utilized by the Company in years subsequent to 2002 are subject to review. The Internal Revenue Service commenced its examination of the Company’s wholly-owned subsidiary, Biotie US’ income tax return for the short period ended December 31, 2016 in the third quarter of 2018. The audit has been substantially completed, and the IRS has proposed an immaterial adjustment that we do not believe will have an impact to the tax provision. The New York State Department of Tax commenced an examination of the Company’s income tax returns for the years 2014 through 2016 in the third quarter of 2018. There have been no proposed adjustments at this stage of the examination. The Massachusetts Department of Revenue commenced an examination of the Company’s income tax returns for the years 2015 through 2017 in the fourth quarter of 2019. There have been no proposed adjustments at this stage of the examination. The New Jersey Department of Revenue commenced an examination of the Company’s income tax returns for the year 2016 through 2018 in the fourth quarter of 2019. There have been no proposed adjustments at this stage of the examination.

The Company is subject to taxation in the United States and various state and foreign jurisdictions. The Company has operations in the United States and Puerto Rico, as well as filing obligations in Finland, Switzerland and Germany. Typically, the period for the statute of limitations ranges from 3 to 5 years, however, this could be extended due to the Company’s NOL carryforward position in a number of its jurisdictions. The tax authorities generally have the ability to review income tax returns for periods where the statute of limitations has previously expired and can subsequently adjust the NOL carryforward or tax credit amounts. Accordingly, the Company does not expect to reverse any portion of the unrecognized tax benefits within the next year.

The beginning and ending amounts of valuation allowances reconcile as follows:

	Balance at							Balance at
(In thousands)	Beginning of Period		Additions		Deductions			End of Period
Valuation allowance for deferred tax assets:
Year ended December 31, 2017	$	63,225		39,007		(3,623	)	$	98,609
Year ended December 31, 2018	$	98,609		5,465		(32,504	)	$	71,570
Year ended December 31, 2019	$	71,570		110,962		(4,960	)	$	177,572

Earnings Per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

(18) Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017:

(In thousands, except per share data)	Year ended December 31, 2019			Year ended December 31, 2018		Year ended December 31, 2017
Basic and diluted
Net (loss) income	$	(272,966	)	$	33,682	$	(223,359	)
Weighted average common shares outstanding used in computing net (loss) income per share—basic		47,512			47,010		45,999
Plus: net effect of dilutive stock options and unvested restricted common shares		—			331		—
Weighted average common shares outstanding used in computing net (loss) income per share—diluted		47,512			47,341		45,999
Net (loss) income per share—basic	$	(5.75	)	$	0.72	$	(4.86	)
Net (loss) income per share—diluted	$	(5.75	)	$	0.71	$	(4.86	)

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)

Year ended December 31, 2019

Year ended December 31, 2018

Year ended December 31, 2017

Denominator

Stock options and restricted common shares

10,123

7,370

8,804

Additionally, the impact of the convertible debt was determined to be anti-dilutive and excluded from the calculation of net income per diluted share for the years ended December 31, 2019, 2018 and 2017.

Employee Benefit Plan

12 Months Ended

Dec. 31, 2019

Compensation And Retirement Disclosure [Abstract]

Employee Benefit Plan

(19) Employee Benefit Plan

Effective September 1, 1999, the Company adopted a defined contribution 401(k) savings plan (the 401(k) plan) covering all employees of the Company. Participants may elect to defer a percentage of their annual pretax compensation to the 401(k) plan, subject to defined limitations. The plan includes an employer match contribution to employee deferrals. For each dollar an employee invests up to 6% of his or her earnings, the Company will contribute an additional 50 cents into the funds. The Company’s expense related to the plan was $2.3 million, $2.4 million and $2.4 million for the years ended December 31, 2019, 2018, and 2017, respectively.

Quarterly Consolidated Financial Data (unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Quarterly Consolidated Financial Data (unaudited)

(20) Quarterly Consolidated Financial Data (unaudited)

(In thousands, except per share amounts)	2019
	March 31			June 30			September 30			December 31
Total net revenues	$	44,137		$	50,053		$	47,722		$	50,496
Gross profit		35,338			40,656			39,736			41,829
Net (loss) income (1)		(47,605	)		(27,486	)		(263,535	)		65,660
Net loss per share—basic	$	(1.00	)	$	(0.58	)	$	(5.55	)	$	1.38
Net loss per share—diluted	$	(1.00	)	$	(0.58	)	$	(5.55	)	$	1.38

	2018
	March 31			June 30		September 30			December 31
Total net revenues	$	106,165		$	153,302	$	142,814		$	69,152
Gross profit		84,815			122,208		117,423			47,678
Net (loss) income (2)		(8,199	)		46,197		(13,911	)		9,595
Net loss per share—basic	$	(0.18	)	$	0.99	$	(0.29	)	$	0.20
Net loss per share—diluted	$	(0.18	)	$	0.98	$	(0.29	)	$	0.20

(1) In the third quarter of 2019, the Company recognized a goodwill impairment charge of $277.6 million. See Note 4 for a discussion of the goodwill impairment charges. In the fourth quarter of 2019, the Company recognized a restructuring charge of $4.4 million. See Note 12 for a discussion of restructuring charges. In the fourth quarter of 2019, the Company recognized an income of $30.6 million resulting from the change in fair value of the contingent consideration liability. See Note 15 for a discussion of contingent consideration liability. In the fourth quarter of 2019, the Company recognized a gain on extinguishment of its debt of $55.1 million. See Note 10 for a discussion of the debt.

(2) In the fourth quarter of 2018, the Company recognized a gain of approximately $7.8 million on the sale of Qutenza assets. See Note 5 for a discussion of the gain on the sale. In the fourth quarter of 2018, the Company recognized a charge of approximately $8.4 million related to inventory obsolescence reserve. See Note 2 for a discussion of the inventory reserve charges.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S.) 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 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 share‑based compensation accounting, which are largely dependent on the fair value of the Company’s equity securities, measurement of changes in the fair value of acquired contingent consideration which is based on a probability weighted discounted cash flow valuation methodology, estimated deductions to determine net revenue such as allowances for customer credits, including estimated discounts, rebates, and chargebacks, which are estimated based on available information that will be adjusted to reflect known changes in the factors that impact such allowances, estimates of derivative liability associated with the exchange of the new convertible senior secured notes due 2024, which is marked to market each quarter based on a Monte Carlo model approach, estimates of reserves for obsolete and excess inventory, and estimates of unrecognized tax benefits and valuation allowances on deferred tax assets which are based on an assessment of recoverability of the deferred tax assets against future taxable income. Actual results could differ from those estimates.

Risks and Uncertainties

The Company is subject to risks common to companies in the pharmaceutical industry including, but not limited to, uncertainties related to commercialization of products, regulatory approvals, dependence on key products, dependence on key customers and suppliers, and protection of intellectual property rights.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less from date of purchase to be cash equivalents. All cash and cash equivalents are held in highly rated securities including a Treasury money market fund which is unrestricted as to withdrawal or use. To date, the Company has not experienced any losses on its cash and cash equivalents. The carrying amount of cash and cash equivalents approximates its fair value due to its short-term and liquid nature. We maintain cash balances in excess of insured limits. We do not anticipate any losses with respect to such cash balances.

Restricted Cash

Restricted cash represents an escrow account with funds to maintain the interest payments for an amount equal to all remaining scheduled interest payments on the outstanding new convertible senior secured notes due 2024 through the interest

payment date of June 1, 2023; and a bank account with funds to cover the Company’s self-funded employee health insurance. At December 31, 2019, the Company also held $0.3 million of restricted cash related to cash collateralized standby letters of credit in connection with obligations under facility leases and $30.0 million related to the escrow account for interest payments included in restricted cash – non current in the consolidated balance sheet due to the long-term nature of the letters of credit and interest payments. (see Note 10).

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same amounts shown in the statement of cash flows:

	December 31, 2019				December 31, 2018				December 31, 2017
(In thousands)	Beginning of period		End of period		Beginning of period		End of period		Beginning of period		End of period
Cash and cash equivalents	$	293,564	$	62,085	$	307,068	$	293,564	$	158,537	$	307,068
Restricted cash		532		12,836		410		532		79		410
Restricted cash-non current		255		30,270		560		255		255		560
Total Cash, cash equivalents and restricted cash per statement of cash flows	$	294,351	$	105,191	$	308,038	$	294,351	$	158,871	$	308,038

Investments

Short-term investments consist primarily of high-grade commercial paper and corporate bonds. The Company classifies marketable securities available to fund current operations as short-term investments in current assets on its consolidated balance sheets. Marketable securities are classified as long-term investments in long-term assets on the consolidated balance sheets if the Company has the ability and intent to hold them and such holding period is longer than one year. The Company classifies all its investments as available-for-sale. Available-for-sale securities are recorded at the fair value of the investments based on quoted market prices.

Unrealized holding gains and losses on available-for-sale securities, which are determined to be temporary, are excluded from earnings and are reported as a separate component of accumulated other comprehensive loss.

Premiums and discounts on investments are amortized over the life of the related available-for-sale security as an adjustment to yield using the effective‑interest method. Dividend and interest income are recognized when earned. Amortized premiums and discounts, dividend and interest income are included in interest income. Realized gains and losses are included in other income.

Other Comprehensive Income (Loss)

The Company’s other comprehensive income (loss) consisted of unrealized gains and losses on available-for-sale securities and adjustments for foreign currency translation and is recorded and presented net of income tax. There was no income tax allocated to the foreign currency translation adjustment in Other Comprehensive Income (Loss) for the period ended December 31, 2019 and 2018. The cumulative foreign currency translation adjustment reported in Other Comprehensive Income (Loss) was $(4.1) million and $(3.9) million for the period ended December 31, 2019 and 2018, respectively.

Inventory

Inventory is stated at the lower of cost or net realizable value. The Company capitalizes inventory costs associated with the Company's products prior to regulatory approval when, based on management's judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Cost is determined using the first-in, first-out method (FIFO) for all inventories. The Company establishes reserves as necessary for obsolescence and excess inventory. The Company records a reserve for excess and obsolete inventory based on the expected future product sales volumes and the projected expiration of inventory and specifically identified obsolete inventory. The Company recorded a charge for excess and obsolete inventory of $0.0 million and $8.4 million for the years ended December 31, 2019 and 2018, respectively. Production costs related to idle capacity are not included in the cost of inventory but are charged directly to cost of sales in the period incurred. We recorded an idle

capacity charge to cost of goods sold of $0.7 million and $0.0 million for the years ended December 31, 2019 and 2018, respectively.

The following table provides the major classes of inventory:

(In thousands)	December 31, 2019		December 31, 2018
Raw materials	$	1,753	$	—
Work-in-progress		13,509		—
Finished goods		9,959		29,014
Total	$	25,221	$	29,014

Ampyra

The cost of Ampyra inventory manufactured by Alkermes plc (Alkermes) is based on agreed upon pricing with Alkermes. In the event Alkermes does not manufacture the products, Alkermes is entitled to a compensating payment for the quantities of product provided by Patheon, the Company’s alternative manufacturer. This compensating payment is included in the Company’s inventory balances.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation, except for assets acquired in a business combination, which are recorded at fair value as of the acquisition date. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which ranges from one to seven years. Leasehold improvements are recorded at cost, less accumulated amortization, which is computed on a straight-line basis over the shorter of the useful lives of the assets or the remaining lease term. Expenditures for maintenance and repairs are charged to expense as incurred. The Company capitalizes interest costs for assets under construction.

Goodwill

Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired in a business combination accounted for using the acquisition method of accounting. Goodwill is not amortized and is subject to impairment testing on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired. We perform our impairment testing at the reporting level where we have determined that we have a single reporting unit and operating segment. The impairment test for goodwill uses an approach which compares the estimated fair value of the reporting unit including goodwill to its carrying value. If the carrying value of the reporting unit exceeds the estimated fair value of the reporting unit, an impairment loss is recognized in an amount equal to the excess of the carrying value over the estimated fair value. The Company recorded an impairment charge of $277.6 million for the year ended December 31, 2019 in the statement of operations. See note 4 for a discussion of goodwill.

Intangible Assets

In Process Research and Development

The Company has indefinite lived intangible assets for the value of acquired in-process research and development. The cost of in-process research and development (IPR&D) acquired directly in a transaction other than a business combination is capitalized if the project will be further developed or have an alternative future use; otherwise it is expensed. The estimated fair value of IPR&D projects acquired in a business combination is capitalized. Several methods may be used to determine the estimated fair value of the IPR&D assets acquired in a business combination. The Company utilizes the "income method” which applies a probability weighting that considers the risk of development and commercialization to the estimated future net cash flows that are derived from projected sales revenues and estimated costs. These projections are based on factors such as relevant market size, patent protection, estimated pricing and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. These assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or impaired, as appropriate. These assets are tested at least annually or when a triggering event occurs that could indicate a potential impairment. Events that could result in an impairment, or trigger an interim impairment assessment, may include

actions by regulatory authorities with respect to us or our competitors, the receipt of additional clinical or nonclinical data regarding our drug candidate or a potentially competitive drug candidate, changes in the clinical development program for a drug candidate or new information regarding potential sales for the drug which could have a negative effect on cash flows and which could result in an impairment. If impairment indicators are present or changes in circumstance suggest that an impairment may exist, we perform an impairment analysis by comparing the sum of the estimated discounted future cash flows, or fair value, of each intangible asset to its carrying value on the consolidated balance sheet. We will recognize an impairment loss if the carrying value of the intangible asset exceeds its fair value.

Finite-Lived Intangible Assets

The Company has finite lived intangible assets that are amortized on a straight line basis over the period in which the Company expects to receive economic benefit and are reviewed for impairment when facts and circumstances indicate that the carrying value of the asset may not be recoverable. The determination of the expected life will be dependent upon the use and underlying characteristics of the intangible asset. In the Company’s evaluation of the intangible assets, it considers the term of the underlying asset life and the expected life of the related product line. If impairment indicators are present or changes in circumstance suggest that impairment may exist, the Company performs a recoverability test by comparing the sum of the estimated undiscounted cash flows of each intangible asset to its carrying value on the consolidated balance sheet. If the undiscounted cash flows used in the recoverability test are less than the carrying value, the Company would determine the fair value of the intangible asset and recognize an impairment loss in the statement of operations if the carrying value of the intangible asset exceeds its fair value. Fair value is generally estimated based on either appraised value or other valuation techniques. Events that could result in an impairment, or trigger an interim impairment assessment, may include actions by regulatory authorities with respect to us or our competitors, new or better products entering the market, changes in market share or market pricing, changes in the economic lives of the assets, changes in the legal framework covering patents, rights or licenses, and other market changes which could have a negative effect on cash flows and which could result in an impairment.

Contingent Consideration

The Company may record contingent consideration as part of the cost of business acquisitions. Contingent consideration is recognized at fair value as of the date of acquisition and recorded as a liability on the consolidated balance sheet. The contingent consideration is re-valued on a quarterly basis using a probability weighted discounted cash-flow approach until fulfillment or expiration of the contingency. Changes in the fair value of the contingent consideration are recognized in the statement of operations. See Note 16 for discussion on the Alkermes ARCUS agreement.

Impairment of Long-Lived Assets

The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful lives of its long-lived assets, including identifiable intangible assets subject to amortization and property plant and equipment, may warrant revision or that the carrying value of the assets may be impaired. The Company evaluates the realizability of its long-lived assets based on profitability and cash flow expectations for the related assets. Factors the Company considers important that could trigger an impairment review include significant changes in the use of any assets, changes in historical trends in operating performance, changes in projected operating performance, stock price, loss of a major customer and significant negative economic trends. The decline in the trading price of the Company's common stock during the quarter ended September 30, 2019, and related decrease in the Company's market capitalization, was determined to be a triggering event in connection with the Company's review of the recoverability of its long-lived assets for the year ended December 31, 2019. The Company performed a recoverability test during the third quarter of fiscal 2019 using the undiscounted cash flows, which are the sum of the future undiscounted cash flows expected to be derived from the direct use of the long-lived assets to the carrying value of the long-lived assets. Estimates of future cash flows were based on the Company’s own assumptions about its own use of the long-lived assets. The cash flow estimation period was based on the long-lived assets’ estimated remaining useful life to the Company. After performing the recoverability test, the Company determined that the undiscounted cash flows exceeded the carrying value and the long-lived assets were not impaired. Changes in these assumptions and resulting valuations could result in future long-lived asset impairment charges. Management will continue to monitor any changes in circumstances for indicators of impairment. Any write‑downs are treated as permanent reductions in the carrying amount of the assets.

Non-Cash Interest Expense on Liability Related to Sale of Future Royalties

As of October 1, 2017, the Company completed a royalty purchase agreement with HealthCare Royalty Partners, or HCRP (“Royalty Agreement”). In exchange for the payment of $40 million to the Company, HCRP obtained the right to receive Fampyra royalties payable by Biogen under the Collaboration and Licensing Agreement between the Company and Biogen, up to an agreed upon threshold of royalties. When this threshold is met, if ever, the Fampyra royalty revenue will revert back to the Company and the Company will continue to receive the Fampyra royalty revenue from Biogen until the revenue stream ends. The transaction does not include potential future milestones to be paid by Biogen to Acorda.

The Company maintained the rights under the license and collaboration agreement with Biogen, therefore, the Royalty Agreement has been accounted for as a liability that will be amortized using the effective interest method over the life of the arrangement, in accordance with the relevant accounting guidance. In order to determine the amortization of the liability, the Company is required to estimate the total amount of future net royalty payments to be made to HCRP over the term of the agreement up to the agreed upon threshold of royalties. The total threshold of net royalties to be paid, less the net proceeds received will be recorded as interest expense over the life of the liability. The Company imputes interest on the unamortized portion of the liability using the effective interest method and records interest expense based on the timing of the payments received over the term of the royalty agreement. The Company’s estimate of the interest rate under the arrangement is based on forecasted net royalty payments expected to be made to HCRP over the life of the royalty agreement. The Company estimated an effective annual interest rate of approximately 15%. Over the course of the Royalty Agreement, the actual interest rate will be affected by the amount and timing of net royalty revenue recognized and changes in forecasted revenue. On a quarterly basis, the Company will reassess the effective interest rate and adjust the rate prospectively as required. Non-cash royalty revenue is reflected as royalty revenue and non-cash interest expense is reflected as interest and amortization of debt discount expense in the Statement of Operations.

Patent Costs

Patent application and maintenance costs are expensed as incurred.

Research and Development

Research and development expenses include the costs associated with the Company’s internal research and development activities, including salaries and benefits, occupancy costs, and research and development conducted for it by third parties, such as contract research organizations (CROs), sponsored university-based research, clinical trials, contract manufacturing for its research and development programs, and regulatory expenses. In addition, research and development expenses include the cost of clinical trial drug supply shipped to the Company’s clinical study vendors. For those studies that the Company administers itself, the Company accounts for its clinical study costs by estimating the patient cost per visit in each clinical trial and recognizes this cost as visits occur, beginning when the patient enrolls in the trial. This estimated cost includes payments to the trial site and patient-related costs, including laboratory costs related to the conduct of the trial. Cost per patient varies based on the type of clinical trial, the site of the clinical trial, and the length of the treatment period for each patient. For those studies for which the Company uses a CRO, the Company accounts for its clinical study costs according to the terms of the CRO contract. These costs include upfront, milestone and monthly expenses as well as reimbursement for pass through costs. As actual costs become known to the Company, it adjusts the accrual; such changes in estimate may be a material change in its clinical study accrual, which could also materially affect its results of operations. All research and development costs are expensed as incurred except when accounting for nonrefundable advance payments for goods or services to be used in future research and development activities. These payments are capitalized at the time of payment and expensed ratably over the period the research and development activity is performed.

Accounting for Income Taxes

The Company provides for income taxes in accordance with ASC Topic 740 (ASC 740). Income taxes are accounted for under the asset and liability method with deferred tax assets and liabilities recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance for the amounts of any tax benefits which, more likely than not, will not be realized.

In determining whether a tax position is recognized for financial statement purposes, a two-step process is utilized whereby the threshold for recognition is a more likely-than-not test that the tax position will be sustained upon examination and the tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Revenue Recognition

On January 1, 2018, the Company adopted the new accounting standard ASC 606, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and the related amendments to all contracts with customers that were not completed as of the date of adoption using the modified retrospective method. ASC 606 supersedes prior revenue guidance under ASC 605 “Revenue Recognition” (“ASC 605”) and requires entities to recognize revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company completed its assessment of the new guidance and evaluated the new requirements as applied to its existing revenue contracts not completed as of the date of initial application. As a result of the assessment, with the exception of the changes to our recognition of license revenue as further described below, the Company determined that adoption of the new standard did not have a significant impact on its revenue recognition methodology. In accordance with ASC 606, the Company recognizes revenue when the customer obtains control of a promised good or service, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the good or service.

The Company determined that the revenue recognition methodology for the deferred license revenue changed as a result of the adoption of ASC 606. License revenue recorded by the Company prior to January 1, 2018 related exclusively to the recognition of the upfront payment received from Biogen upon the execution of the License and Collaboration agreement that granted Biogen an exclusive non sub-licensable license to sell Fampyra outside of the U.S. License revenue recorded prior to January 1, 2018 was recognized under ASC 605 on a pro rata basis as the Company’s obligations were satisfied throughout the duration of the license and collaboration agreement. As of January 1, 2018, the Company adopted ASC 606 which changed the Company’s determination of its distinct performance obligations resulting in an acceleration of the recognition of the revenue in the arrangement. The material performance obligations were completed prior to January 1, 2018, and as a result, the Company recognized its previously deferred license revenue and the associated deferred costs as a cumulative effect adjustment of $27.6 million within the accumulated deficit on the consolidated balance sheet as of January 1, 2018.

The cumulative effect of applying ASC 606 to the company’s consolidated balance sheet was as follows:

(In thousands)	Balance as of December 31, 2017			Net Adjustments			Balance as of January 1, 2018
Assets
Other current assets	$	1,983		$	(634	)	$	1,349
Non-current portion of deferred cost of license revenue		1,638			(1,638	)		—
Total Assets	$	1,197,969		$	(2,272	)	$	1,195,697

Liabilities and Stockholders’ Equity
Current portion of deferred license revenue	$	9,057		$	(9,057	)	$	—
Non-current portion of deferred license revenue		23,398			(23,398	)		—
Deferred tax liability		22,459			2,600			25,059
Accumulated deficit		(455,108	)		27,583			(427,525	)
Total liabilities and stockholders' equity	$	1,197,969		$	(2,272	)	$	1,195,697

The impact of the adoption of ASC 606 on the Company’s consolidated balance sheet as of December 31, 2018 was as follows:

(In thousands)	Balance as of December 31, 2018 Prior to Adoption of ASC 606			Net Adjustments			Balance as of December 31, 2018 as Reported Under ASC 606
Assets
Other current assets	$	10,828		$	(634	)	$	10,194
Non-current portion of deferred cost of license revenue		1,004			(1,004	)		—
Total Assets	$	1,301,304		$	(1,638	)	$	1,299,666

Liabilities and Stockholders’ Equity
Current portion of deferred license revenue	$	9,057		$	(9,057	)	$	—
Non-current portion of deferred license revenue		14,341			(14,341	)		—
Deferred tax liability		6,988			495			7,483
Accumulated deficit		(415,108	)		21,265			(393,843	)
Total liabilities and stockholders' equity	$	1,301,304		$	(1,638	)	$	1,299,666

The impact of the adoption of ASC 606 on the Company’s consolidated statement of operations for the year ended December 31, 2018 was as follows:

(In thousands)	Year Ended December 31, 2018 Balance Prior to Adoption of ASC 606			Effect of Change			Year Ended December 31, 2018 Balance as Reported Under ASC 606
License revenue	$	9,057		$	(9,057	)	$	—
Cost of license revenue		634			(634	)		—
Operating income (loss)	$	46,909		$	(8,423	)	$	38,486
(Benefit from) provision for income taxes		(15,364	)		2,105			(13,259	)
Net income (loss)	$	40,000		$	(6,318	)	$	33,682
Net income (loss) per share—basic	$	0.85		$	(0.13	)	$	0.72
Net income (loss) per share—diluted	$	0.84		$	(0.13	)	$	0.71