ACORDA THERAPEUTICS INC, 10-Q filed on 11/12/2021
Quarterly Report
v3.21.2
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2021
Nov. 05, 2021
Cover [Abstract]    
Entity Registrant Name ACORDA THERAPEUTICS, INC.  
Entity Central Index Key 0001008848  
Document Type 10-Q  
Document Period End Date Sep. 30, 2021  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Document Quarterly Report true  
Document Transition Report false  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q3  
Trading Symbol ACOR  
Title of each class Common Stock $0.001 par value per share  
Name of each exchange on which registered NASDAQ  
Entity Common Stock, Shares Outstanding   11,202,242
Entity File Number 001-31938  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 13-3831168  
Entity Address, Address Line One 420 Saw Mill River Road  
Entity Address, City or Town Ardsley  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10502  
City Area Code 914  
Local Phone Number 347-4300  
v3.21.2
Consolidated Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Current assets:    
Cash and cash equivalents $ 36,168 $ 71,369
Restricted cash 13,353 12,917
Trade accounts receivable, net of allowances of $1,245 and $1,266, as of September 30, 2021 and December 31, 2020, respectively 13,587 20,193
Prepaid expenses 11,192 14,807
Inventory, net 20,595 28,677
Assets held for sale   71,795
Other current assets 2,174 1,577
Total current assets 97,069 221,335
Property and equipment, net of accumulated depreciation 5,016 7,263
Intangible assets, net of accumulated amortization 343,731 366,981
Right of use asset, net of accumulated amortization 7,861 18,481
Restricted cash 12,399 18,609
Other assets 11 11
Total assets 466,087 632,680
Current liabilities:    
Accounts payable 15,500 12,155
Accrued expenses and other current liabilities 34,158 38,167
Current portion of loans payable   68,631
Current portion of liability related to sale of future royalties 7,452 8,731
Current portion of lease liabilities 9,316 7,944
Current portion of acquired contingent consideration 1,845 1,624
Total current liabilities 68,271 137,252
Convertible senior notes 147,447 137,619
Derivative liability 325 1,193
Non-current portion of acquired contingent consideration 41,155 46,576
Non-current portion of lease liabilities 4,287 17,200
Non-current portion of loans payable 27,929 28,555
Deferred tax liability 11,912 19,116
Non-current portion of liability related to sale of future royalties   6,526
Other non-current liabilities 286 688
Commitments and contingencies
Stockholders’ equity:    
Preferred stock, $0.001 par value. Authorized 1,000,000 shares at September 30, 2021 and December 31, 2020; no shares issued as of September 30, 2021 and December 31, 2020, respectively
Common stock, $0.001 par value. Authorized 61,666,666 shares at September 30, 2021 and December 31, 2020; issued 11,193,741 and 9,475,631 shares, including those held in treasury, as of September 30, 2021 and December 31, 2020, respectively 11 9
Treasury stock at cost (5,543 shares at September 30, 2021 and December 31, 2020) (638) (638)
Additional paid-in capital 1,016,448 1,007,790
Accumulated deficit (849,789) (766,403)
Accumulated other comprehensive loss (1,557) (2,803)
Total stockholders’ equity 164,475 237,955
Total liabilities and stockholders’ equity $ 466,087 $ 632,680
v3.21.2
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Statement Of Financial Position [Abstract]    
Trade accounts receivable, allowances (in dollars) $ 1,245 $ 1,266
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 61,666,666 61,666,666
Common stock, issued shares 11,193,741 9,475,631
Treasury stock, shares 5,543 5,543
v3.21.2
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Revenues:        
Total net revenues $ 31,456 $ 53,090 $ 92,104 $ 114,807
Costs and expenses:        
Cost of sales 13,303 12,170 36,589 22,670
Research and development 1,931 5,729 9,054 18,689
Selling, general and administrative 29,623 39,935 95,959 119,700
Amortization of intangible assets 7,691 7,691 23,073 23,073
Asset impairment       4,131
Change in fair value of derivative liability (288) (4,864) (868) (40,320)
Changes in fair value of acquired contingent consideration 2,205 (23,608) (4,224) (33,455)
Total operating expenses 54,465 37,053 159,583 114,488
Operating loss (23,009) 16,037 (67,479) 319
Other income (expense), net:        
Interest and amortization of debt discount expense (7,167) (7,760) (22,697) (22,810)
Interest income 1 317 4 807
Other income (expense)   19 1 (16)
Gain on disposal of property and equipment   200   200
Realized loss on foreign currency transactions (1) (1) (4) (8)
Total other expense, net (7,167) (7,225) (22,696) (21,827)
Income (loss) before taxes (30,176) 8,812 (90,175) (21,508)
Benefit from (Provision for) income taxes 3,105 (1,465) 6,788 4,962
Net income (loss) $ (27,071) $ 7,347 $ (83,387) $ (16,546)
Net income (loss) per share—basic $ (2.43) $ 0.92 $ (8.17) $ (2.08)
Net income (loss) per share—diluted $ (2.43) $ 0.32 $ (8.17) $ (2.08)
Weighted average common shares outstanding used in computing net loss per share—basic 11,131 7,960 10,204 7,960
Weighted average common shares outstanding used in computing net loss per share—diluted 11,131 27,700 10,204 7,960
Net Product Revenues        
Revenues:        
Total net revenues $ 27,851 $ 34,687 $ 81,297 $ 90,153
Milestone Revenues        
Revenues:        
Total net revenues   15,000   15,000
Royalty Revenues        
Revenues:        
Total net revenues $ 3,605 $ 3,403 $ 10,807 $ 9,654
v3.21.2
Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Statement Of Income And Comprehensive Income [Abstract]        
Net income (loss) $ (27,071) $ 7,347 $ (83,387) $ (16,546)
Other comprehensive income (loss), net of tax:        
Foreign currency translation adjustment 276 (1,018) 1,246 (1,096)
Unrealized loss on available for sale debt securities   (45)   (21)
Other comprehensive income (loss), net of tax 276 (1,063) 1,246 (1,117)
Comprehensive income (loss) $ (26,795) $ 6,284 $ (82,141) $ (17,663)
v3.21.2
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 (loss) income
Balance at Dec. 31, 2019 $ 310,820 $ 8 $ (638) $ 979,428 $ (666,809) $ (1,169)
Balance (in shares) at Dec. 31, 2019   7,964        
Compensation expense for issuance of stock options to employees 1,976     1,976    
Compensation expense for issuance of restricted stock to employees (in shares)   1        
Other comprehensive (loss) income,net of tax 350         350
Net income (loss) (6,472)       (6,472)  
Balance at Mar. 31, 2020 306,674 $ 8 (638) 981,404 (673,281) (819)
Balance (in shares) at Mar. 31, 2020   7,965        
Balance at Dec. 31, 2019 310,820 $ 8 (638) 979,428 (666,809) (1,169)
Balance (in shares) at Dec. 31, 2019   7,964        
Net income (loss) (16,546)          
Balance at Sep. 30, 2020 313,531 $ 8 (638) 999,802 (683,355) (2,286)
Balance (in shares) at Sep. 30, 2020   7,965        
Balance at Mar. 31, 2020 306,674 $ 8 (638) 981,404 (673,281) (819)
Balance (in shares) at Mar. 31, 2020   7,965        
Compensation expense for issuance of stock options to employees 2,056     2,056    
Other comprehensive (loss) income,net of tax (404)         (404)
Net income (loss) (17,421)       (17,421)  
Balance at Jun. 30, 2020 290,905 $ 8 (638) 983,460 (690,702) (1,223)
Balance (in shares) at Jun. 30, 2020   7,965        
Compensation expense for issuance of stock options to employees 2,480     2,480    
Reclassification of derivative liability to equity, net of tax 13,862     13,862    
Other comprehensive (loss) income,net of tax (1,063)         (1,063)
Net income (loss) 7,347       7,347  
Balance at Sep. 30, 2020 313,531 $ 8 (638) 999,802 (683,355) (2,286)
Balance (in shares) at Sep. 30, 2020   7,965        
Balance at Dec. 31, 2020 237,955 $ 9 (638) 1,007,790 (766,403) (2,803)
Balance (in shares) at Dec. 31, 2020   9,476        
Compensation expense for issuance of stock options to employees 483     483    
Compensation expense for issuance of restricted stock to employees 224     224    
Other comprehensive (loss) income,net of tax 1,069         1,069
Net income (loss) (33,451)       (33,451)  
Balance at Mar. 31, 2021 206,279 $ 9 (638) 1,008,497 (799,854) (1,734)
Balance (in shares) at Mar. 31, 2021   9,476        
Balance at Dec. 31, 2020 237,955 $ 9 (638) 1,007,790 (766,403) (2,803)
Balance (in shares) at Dec. 31, 2020   9,476        
Net income (loss) (83,387)          
Balance at Sep. 30, 2021 164,475 $ 11 (638) 1,016,448 (849,789) (1,557)
Balance (in shares) at Sep. 30, 2021   11,194        
Balance at Mar. 31, 2021 206,279 $ 9 (638) 1,008,497 (799,854) (1,734)
Balance (in shares) at Mar. 31, 2021   9,476        
Compensation expense for issuance of stock options to employees 498     498    
Compensation expense for issuance of restricted stock to employees 456     456    
Interest payment for convertible notes 6,210 $ 2   6,208    
Interest payment for convertible notes (in shares)   1,636        
Other comprehensive (loss) income,net of tax (99)         (99)
Net income (loss) (22,864)       (22,864)  
Balance at Jun. 30, 2021 190,481 $ 11 (638) 1,015,659 (822,718) (1,833)
Balance (in shares) at Jun. 30, 2021   11,112        
Compensation expense for issuance of stock options to employees 455     455    
Compensation expense for issuance of restricted stock to employees 334     334    
Compensation expense for issuance of restricted stock to employees (in shares)   82        
Other comprehensive (loss) income,net of tax 276         276
Net income (loss) (27,071)       (27,071)  
Balance at Sep. 30, 2021 $ 164,475 $ 11 $ (638) $ 1,016,448 $ (849,789) $ (1,557)
Balance (in shares) at Sep. 30, 2021   11,194        
v3.21.2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical)
$ in Millions
3 Months Ended
Sep. 30, 2020
USD ($)
Statement Of Stockholders Equity [Abstract]  
Reclassification of derivative liability to equity, net of tax amount $ 4.4
v3.21.2
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2021
Mar. 31, 2021
Sep. 30, 2020
Mar. 31, 2020
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2020
Cash flows from operating activities:              
Net income (loss) $ (27,071) $ (33,451) $ 7,347 $ (6,472) $ (83,387) $ (16,546)  
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:              
Share-based compensation expense         2,515 6,512  
Amortization of net premiums and discounts on investments           (28)  
Amortization of debt discount and debt issuance costs         12,672 12,219  
Depreciation and amortization expense         25,482 30,919  
Asset impairment           4,131  
Change in acquired contingent consideration obligation         (4,224) (33,455)  
Non-cash royalty revenue         (8,889) (8,496)  
Deferred tax (benefit) provision         (6,788) 8,801  
Change in derivative liability         (868) (40,320)  
Gain on disposal of property and equipment     (200)     (200)  
Changes in assets and liabilities:              
Decrease in accounts receivable         6,606 8,698  
Decrease (increase) in prepaid expenses and other current assets         2,629 (16,712)  
Decrease (increase) in inventory         5,813 (4,899)  
Decrease in other assets           17  
Increase (decrease) in accounts payable, accrued expenses and other current liabilities         4,875 (13,391)  
Increase (decrease) in other non-current liabilities         (1,024) 296  
Net cash used in operating activities         (44,588) (62,454)  
Cash flows from investing activities:              
Purchases of property and equipment         (164) (4,074)  
Purchases of intangible assets         (26)    
Proceeds from maturities of investments           58,415  
Net cash (used in) provided by investing activities         (190) 54,341  
Cash flows from financing activities:              
Repayment of Convertible Senior Notes Due 2021         (69,000)    
Debt issuance costs           (1,071)  
Proceeds from sale of Chelsea facility, net         73,969    
Repayment of loans payable         (655) (597)  
Net cash provided by (used in) financing activities         4,314 (1,668)  
Effect of exchange rate changes on cash, cash equivalents and restricted cash         (511) 519  
Net decrease in cash, cash equivalents and restricted cash         (40,975) (9,262)  
Cash, cash equivalents and restricted cash at beginning of period   $ 102,895   $ 105,192 102,895 105,192 $ 105,192
Cash, cash equivalents and restricted cash at end of period $ 61,920   $ 95,930   61,920 95,930 $ 102,895
Supplemental disclosure:              
Cash paid for interest         6 6,067  
Cash paid for taxes         $ 46 $ 250  
v3.21.2
Organization and Business Activities
9 Months Ended
Sep. 30, 2021
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 accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information, Accounting Standards Codification (ASC) Topic 270-10 and with the instructions to Form 10-Q. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, all adjustments considered necessary for a fair presentation have been included in the interim periods presented and all adjustments are of a normal recurring nature. The Company has evaluated subsequent events through the date of this filing. Operating results for the three and nine-month periods ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. When used in these notes, the terms “Acorda” or “the Company” mean Acorda Therapeutics, Inc. The December 31, 2020 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. You should read these unaudited interim condensed consolidated financial statements in conjunction with the consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K, for the year ended December 31, 2020.

v3.21.2
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2021
Accounting Policies [Abstract]  
Summary of Significant Accounting

(2) Summary of Significant Accounting Policies

Our significant accounting policies are detailed in our Annual Report on Form 10-K for the year ended December 31, 2020. Effective January 1, 2021, the Company adopted ASU 2019-12, “Simplifying the Accounting for Income Taxes” (Topic 740). Other than the adoption of the new accounting guidance, our significant accounting policies have not changed materially from December 31, 2020.

Basis of Presentation

On December 31, 2020, we filed an amendment to our Certificate of Incorporation which effected, as of 4:01 p.m. Eastern Time on December 31, 2020, a 1-for-6 reverse stock split of the shares of our outstanding common stock and proportionate reduction in the number of authorized shares of our common stock from 370,000,000 to 61,666,666. Our common stock began trading on a split-adjusted basis on The Nasdaq Global Select Market commencing upon market open on January 4, 2021. The common stock continued to trade under the symbol “ACOR” after the reverse stock split became effective. The reverse stock split applied equally to all outstanding shares of the common stock and did not modify the rights or preferences of the common stock. As such, all figures in this report relating to shares of our common stock (such as share amounts, per share amounts, and conversion rates and prices), including in the financial statements and accompanying notes to the financial statements, have been retroactively restated to reflect the 1-for-6 reverse stock split of our common stock.

Restricted Cash

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:

 

Nine-month period ended September 30, 2021

 

 

Nine-month period ended September 30, 2020

 

(In thousands)

Beginning of period

 

 

End of period

 

 

Beginning of period

 

 

End of period

 

Cash and cash equivalents

$

71,369

 

 

$

36,168

 

 

$

62,085

 

 

$

57,910

 

Restricted cash

 

12,917

 

 

 

13,353

 

 

 

12,836

 

 

 

13,200

 

Restricted cash non-current

 

18,609

 

 

 

12,399

 

 

 

30,270

 

 

 

24,819

 

Total Cash, cash equivalents and restricted cash per statement of cash flows

$

102,895

 

 

$

61,920

 

 

$

105,191

 

 

$

95,929

 

 

 

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 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 September 30, 2021, 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 $12.1 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).

Inventory

The major classes of inventory were as follows:

(In thousands)

 

September 30, 2021

 

 

December 31, 2020

 

Raw materials

 

$

969

 

 

$

3,434

 

Work-in-progress

 

 

 

 

 

6,602

 

Finished goods

 

 

19,626

 

 

 

18,641

 

Total

 

$

20,595

 

 

$

28,677

 

The Company reviews inventory, including inventory purchase commitments, for slow moving or obsolete amounts based on expected product sales volume and provides reserves against the carrying amount of inventory as appropriate. On February 10, 2021, we completed the sale of our Chelsea, Massachusetts manufacturing operations to Catalent Pharma Solutions. In connection with the sale of the manufacturing operations, we transferred approximately $2.3 million of raw materials to Catalent (see Note 12). Additionally, in reviewing the inventory for slow moving or obsolete amounts we recorded a charge of $1.3 million for the remaining work-in-progress inventory that was scrapped or discarded during the nine-month period ended September 30, 2021.

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; 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 losses and gains are recognized in the period incurred and are reported as other (expense) income, net in the statement 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, who is the chief operating decision maker. The Company does not operate separate lines of business with respect to any of its products or product candidates and the Company does not prepare discrete financial information with respect to separate products or product candidates or by location. Accordingly, the Company views its business as one reportable operating segment. Net product revenues reported are derived from the sales of Inbrija and Ampyra in the U.S. for the three and nine-month periods ended September 30, 2021 and 2020.

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. 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, results of clinical trials, 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 June 30, 2021, 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 three-month period ended June 30, 2021. The Company performed a recoverability test as of June 30, 2021 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 or further declines in our stock price 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.

Liquidity

  The Company’s ability to meet its future operating requirements, repay its liabilities, and meet its other obligations are dependent upon a number of factors, including its ability to generate cash from product sales, reduce planned expenditures, and obtain additional financing. If the Company is unable to generate sufficient cash flow from the sale of its products, it will be required to adopt one or more alternatives, subject to the restrictions contained in the indenture governing its convertible senior secured notes due 2024, such as further reducing expenses, selling assets, restructuring debt, or obtaining additional equity capital on terms that may be onerous and which are likely to be highly dilutive. Also, the Company’s ability to raise additional capital and repay or restructure its indebtedness will depend on the capital markets and its financial condition at such time, among other factors. In addition, financing may not be available when needed, at all, on terms acceptable to us or in accordance with the restrictions described above. As a result of these factors, the Company may not be able to engage in any of the alternative activities, or engage in such activities on desirable terms, which could harm the Company’s business, financial condition and results of operations, as well as result in a default on the Company’s debt obligations. If the Company is unable to take these actions, it may be forced to significantly alter its business strategy, substantially curtail its current operations, or cease operations altogether.

At September 30, 2021, the Company had $36.2 million of cash and cash equivalents, compared to $71.4 million at December 31, 2020. The Company’s September 30, 2021 cash and cash equivalents balance does not include restricted cash, currently held in escrow under the terms of its convertible senior secured notes due 2024, which may potentially be released from escrow if the Company pays interest on those notes using shares of its common stock. The Company incurred a net loss of $83.4 million for the nine-month period ended September 30, 2021.

Based on the Company’s cash and cash equivalents at September 30, 2021, and the Company’s obligations that are due within the next twelve months, management has concluded that there is no substantial doubt regarding the Company’s ability to meet its obligations within one year after the date the consolidated financial statements included in this report are issued.

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 or adjustment in these financial statements. 

Accounting Pronouncements Adopted

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 adopted this guidance effective January 1, 2021. The adoption of this guidance did not have a significant impact on the consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-03, “Codification Improvements to Financial Instruments”: The amendments in this update are to clarify, correct errors in, or make minor improvements to a variety of ASC topics. The changes in ASU 2020-03 are not expected to have a significant effect on current accounting practices. The ASU improves various financial instrument topics in the Codification to increase stakeholder awareness of the amendments and to expedite the improvement process by making the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. The ASU is effective for smaller reporting companies for fiscal years beginning after December 15, 2022 with early application permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This update simplifies the accounting for convertible instruments by eliminating the cash conversion and beneficial conversion feature models which require separate accounting for embedded conversion features. This update also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. ASU 2020-06 is effective for smaller reporting companies for fiscal periods beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. The FASB is issuing this update to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.

v3.21.2
Revenue
9 Months Ended
Sep. 30, 2021
Revenue From Contract With Customer [Abstract]  
Revenue

(3) Revenue

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. 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 any contract liabilities as of September 30, 2021 and 2020.

The following table disaggregates our revenue by major source. The Company’s Royalty Revenue set forth below relates to Fampyra royalties payable under the Company’s License and Collaboration Agreement with Biogen. See Note 9 for additional information on the Company’s related payment obligation to HealthCare Royalty Partners, or HCRP, in connection with a 2017 royalty purchase agreement with HCRP.

 

 

(In thousands)

Three-month period ended September 30, 2021

 

 

Three-month period ended September 30, 2020

 

 

Nine-month period ended September 30, 2021

 

 

Nine-month period ended September 30, 2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net product revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ampyra

$

20,026

 

 

$

27,343

 

 

$

62,035

 

 

$

73,546

 

Inbrija

 

7,804

 

 

 

5,833

 

 

 

19,240

 

 

 

14,901

 

Other

 

21

 

 

 

1,511

 

 

 

22

 

 

 

1,706

 

Total net product revenues

 

27,851

 

 

 

34,687

 

 

 

81,297

 

 

 

90,153

 

Milestone revenues

 

 

 

 

15,000

 

 

 

 

 

 

15,000

 

Royalty revenues

 

3,605

 

 

 

3,403

 

 

 

10,807

 

 

 

9,654

 

Total net revenues

$

31,456

 

 

$

53,090

 

 

$

92,104

 

 

$

114,807

 

 

v3.21.2
Share-based Compensation
9 Months Ended
Sep. 30, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Share-based Compensation

(4) Share-based Compensation

During the three‑month periods ended September 30, 2021 and 2020, the Company recognized share-based compensation expense of $0.9 million and $2.5 million, respectively. During the nine-month periods ended September 30, 2021 and 2020, the Company recognized share-based compensation expense of $2.5 and $6.5 million, respectively. Activity in options and restricted stock during the nine-month period ended September 30, 2021 and related balances outstanding as of that date are reflected below. The weighted average fair value per share of options granted to employees for the three-month periods ended September 30, 2021 and 2020 were approximately $2.56 and $2.31, respectively. The weighted average fair value per share of options granted to employees for the nine-month periods ended September 30, 2021 and 2020 were approximately $2.58 and $3.96, respectively.

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

 

 

 

For the three-month period ended September 30,

 

 

For the nine-month period ended September 30,

 

(In thousands)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Research and development expense

 

$

225

 

 

$

555

 

 

$

599

 

 

$

1,418

 

Selling, general and administrative expense

 

 

627

 

 

 

1,832

 

 

 

1,898

 

 

 

4,834

 

Cost of Sales

 

 

2

 

 

 

93

 

 

 

18

 

 

 

260

 

Total

 

$

854

 

 

$

2,480

 

 

$

2,515

 

 

$

6,512

 

 

A summary of share-based compensation activity for the nine-month period ended September 30, 2021 is presented below:

Stock Option Activity

 

 

 

Number of

Shares

(In thousands)

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Contractual

Term

 

 

Intrinsic

Value

(In thousands)

 

Balance at January 1, 2021

 

 

1,331

 

 

$

127.13

 

 

 

 

 

 

 

 

 

Granted

 

 

61

 

 

 

3.78

 

 

 

 

 

 

 

 

 

Cancelled

 

 

(309

)

 

 

109.27

 

 

 

 

 

 

 

 

 

Exercised

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2021

 

 

1,083

 

 

$

125.27

 

 

 

4.2

 

 

$

43

 

Vested and expected to vest at

    September 30, 2021

 

 

1,082

 

 

$

125.33

 

 

 

4.2

 

 

$

42

 

Vested and exercisable at

    September 30, 2021

 

 

1,001

 

 

$

133.65

 

 

 

3.9

 

 

$

13

 

 

Restricted Stock and Performance Stock Unit Activity

 

(In thousands)

 

 

 

 

Restricted Stock and Performance Stock Units

 

Number of Shares

 

Nonvested at January 1, 2021

 

 

31

 

Granted

 

 

261

 

Vested

 

 

(97

)

Forfeited

 

 

(53

)

Nonvested at September 30, 2021

 

 

142

 

 

Unrecognized compensation cost for unvested stock options, restricted stock awards, and restricted stock units as of September 30, 2021 totaled $2.6 million and is expected to be recognized over a weighted average period of approximately 0.9 years.

During the three and nine‑month periods ended September 30, 2021, the Company did not make any repurchases of shares.

v3.21.2
Loss Per Share
9 Months Ended
Sep. 30, 2021
Earnings Per Share [Abstract]  
Loss Per Share

(5) Loss Per Share

The following table sets forth the computation of basic and diluted loss per share for the three and nine-month periods ended September 30, 2021 and 2020:

 

(In thousands, except per share data)

 

Three-month period ended September 30, 2021

 

 

Three-month period ended September 30, 2020

 

 

Nine-month period ended September 30, 2021

 

 

Nine-month period ended September 30, 2020

 

Basic and diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)—basic

 

$

(27,071

)

 

$

7,347

 

 

$

(83,387

)

 

$

(16,546

)

Plus: Dilutive effect of convertible notes, net of tax

 

 

 

 

 

 

1,476

 

 

 

 

 

 

 

Net income (loss)—diluted

 

$

(27,071

)

 

$

8,823

 

 

$

(83,387

)

 

$

(16,546

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding used in

   computing net loss per share—basic

 

 

11,131

 

 

 

7,960

 

 

 

10,204

 

 

 

7,960

 

Plus: net effect of dilutive stock options and restricted

   common shares

 

 

 

 

 

19,740

 

 

 

 

 

 

 

Weighted average common shares outstanding used in

   computing net loss per share—diluted

 

 

11,131

 

 

 

27,700

 

 

 

10,204

 

 

 

7,960

 

Net income (loss) per share—basic

 

$

(2.43

)

 

$

0.92

 

 

$

(8.17

)

 

$

(2.08

)

Net income (loss) per share—diluted

 

$

(2.43

)

 

$

0.32

 

 

$

(8.17

)

 

$

(2.08

)

 

Securities that could potentially be dilutive are excluded from the computation of diluted loss 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 loss per diluted share because their effects were anti-dilutive:

 

(In thousands)

 

Three-month period ended September 30, 2021

 

 

Three-month period ended September 30, 2020

 

 

Nine-month period ended September 30, 2021

 

 

Nine-month period ended September 30, 2020

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options and restricted common shares

 

 

1,370

 

 

 

1,465

 

 

 

1,368

 

 

 

1,423

 

 

Performance share units are excluded from the calculation of net loss per diluted share as the performance criteria has not been met for the three and nine-month periods ended September 30, 2021 and 2020. The impact of the convertible senior notes was determined to be anti-dilutive and excluded from the calculation of net loss per diluted share for the three and nine-

month periods ended September 30, 2021. Additionally, for the three and nine month periods ended September 30, 2020, the impact of our outstanding convertible notes was determined to be dilutive and anti-dilutive, respectively.  

v3.21.2
Income Taxes
9 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

(6) Income Taxes

The Company’s effective income tax rate differs from the U.S. statutory rate primarily due to an increase in the valuation allowance and expense recorded on the equity forfeiture.

For the three-month periods ended September 30, 2021 and 2020, the Company recorded a benefit of $3.1 million and a provision of $(1.5) million for income taxes, respectively. The effective income tax rates for the Company for the three-month periods ended September 30, 2021 and 2020 were 10.2% and 16.6%, respectively. The variances in the effective tax rates for the three-month period ended September 30, 2021 as compared to the three-month period ended September 30, 2020 was due primarily to the valuation allowance recorded on deferred tax assets for which no tax benefit can be recognized and the benefit recorded on the net operating loss carryback under the CARES Act recorded at 21% to recover taxes paid at the previous statutory rate of 35%.

For the nine-month periods ended September 30, 2021 and 2020, the Company recorded a benefit of $6.8 million and a benefit of $5.0 million for income taxes, respectively. The effective income tax rates for the Company for the nine-month periods ended September 30, 2021 and 2020 were 7.53% and 23.1%, respectively. The variance in effective tax rates for the nine-month period ended September 30, 2021 as compared to the nine-month period ended September 30, 2020 was due primarily to the valuation allowance recorded on deferred tax assets for which no tax benefit can be recognized, forfeitures of equity based awards and the benefit recorded on the net operating loss carryback under the CARES Act recorded at 21% to recover taxes paid at the previous statutory rate of 35%.

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

The Company was notified during the first quarter of 2021 that it is being audited by the state of Massachusetts for the tax years 2018 and 2019. There have been no proposed adjustments at this stage of the examination.

The Company also has an ongoing state examination in New Jersey which for the tax periods, 2015 – 2018. There have been no proposed adjustments at this stage of the examination.  The Minnesota examinations for 2016 and 2017 were closed during the quarter with no changes.

v3.21.2
Fair Value Measurements
9 Months Ended
Sep. 30, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurements

(7) Fair Value Measurements

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates, exchange rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points for the asset or liability. The Company’s Level 1 assets consist of investments in a Treasury money market fund and U.S. government securities. The Company’s level 2 assets consist of investments in corporate bonds and commercial paper which are categorized as short-term investments for investments with original maturities between three months and one year. The Company’s Level 3 liabilities represent acquired contingent consideration related to the acquisition of Civitas which are valued using a probability weighted discounted cash flow valuation approach and derivative liabilities related to conversion options for the convertible senior notes due December 2024 which are valued using a binomial model. For assets and liabilities not accounted for at fair value, the carrying values of these accounts approximates their fair values at September 30, 2021, except for the fair value of the Company’s convertible senior notes due December 2024, which was approximately $167.7 million as of September 30, 2021. The Company estimates the fair value of its notes utilizing market quotations for the debt (Level 2).

 

(In thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

12,192

 

 

$

 

 

$

 

Corporate bonds

 

 

 

 

 

 

 

 

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

 

 

 

 

 

 

43,000

 

Derivative liability - conversion option

 

 

 

 

 

 

 

 

325

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

36,693

 

 

$

 

 

$

 

Commercial paper

 

 

 

 

 

 

 

 

 

Corporate bonds

 

 

 

 

 

 

 

 

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

 

 

 

 

 

 

48,200

 

Derivative liability - conversion option

 

 

 

 

 

 

 

 

1,193

 

 

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

Acquired contingent consideration

 

(In thousands)

 

Three-month period ended September 30, 2021

 

 

Three-month period ended September 30, 2020

 

 

Nine-month period ended September 30, 2021

 

 

Nine-month period ended September 30, 2020

 

Acquired contingent consideration:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

41,200

 

 

$

70,000

 

 

$

48,200

 

 

$

80,300

 

Fair value change to contingent consideration

   included in the statement of operations

 

 

2,205

 

 

 

(23,608

)

 

 

(4,224

)

 

 

(33,455

)

Royalty payments

 

 

(405

)

 

 

(292

)

 

 

(976

)

 

 

(745

)

Balance, end of period

 

$

43,000

 

 

$

46,100

 

 

$

43,000

 

 

$

46,100

 

 

 

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 in Parkinson’s disease. Using this approach, expected probability adjusted 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 forecast for Inbrija, (ii) probabilities of success, and (iii) discount periods and rate. The milestone payments ranged from $1.0 million to $22.0 million for Inbrija. The discount rate used in the valuation was 20.5% for the three and nine-month periods ended September 30, 2021. The valuation is performed quarterly and changes in the fair value of the contingent consideration are included in the statement of operations. For the three and nine-month periods ended September 30, 2021 and 2020, changes in the fair value of the acquired contingent consideration were primarily due to updates to certain revenue and expense forecast assumptions.

The acquired contingent consideration is classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market. If different assumptions were used for the various inputs to the valuation approach, including but not limited to, assumptions involving 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 convertible senior secured notes due 2024:

(In thousands)

Three-month period ended September 30, 2021

 

 

Three-month period ended September 30, 2020

 

 

Nine-month period ended September 30, 2021

 

 

Nine-month period ended September 30, 2020

 

Derivative Liability-Conversion Option

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

613

 

 

$

23,953

 

 

$

1,193

 

 

$

59,409

 

Fair value adjustment

 

(288

)

 

 

(4,864

)