ACORDA THERAPEUTICS INC, 10-K filed on 3/15/2023
Annual Report
v3.22.4
Document and Entity Information - USD ($)
 12 Months Ended
Dec. 31, 2022
Mar. 10, 2023
Jun. 30, 2022
Cover [Abstract]      
Entity Registrant Name ACORDA THERAPEUTICS, INC.    
Entity Central Index Key 0001008848    
Document Type 10-K    
Document Period End Date Dec. 31, 2022    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Filer Category Non-accelerated Filer    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Public Float     $ 11,236,872
Entity Small Business true    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Entity Shell Company false    
Document Annual Report true    
Document Transition Report false    
Entity Common Stock, Shares Outstanding   24,337,696  
Document Fiscal Year Focus 2022    
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 2 Blue Hill Plaza, 3rd Floor    
Entity Address, City or Town Pearl River    
Entity Address, State or Province NY    
Entity Address, Postal Zip Code 10965    
City Area Code 914    
Local Phone Number 347-4300    
Auditor Firm ID 42    
Auditor Name Ernst & Young LLP    
Auditor Location Stamford, Connecticut    
Title of each class Common Stock $0.001 par value per share    
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 2023 Annual Meeting of Stockholders pursuant to Regulation 14A within 120 days of the end of the fiscal year ended December 31, 2022. 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.

    
v3.22.4
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Current assets:    
Cash and cash equivalents $ 37,536 $ 45,634
Restricted cash 6,884 13,400
Trade accounts receivable, net of allowances of $842 and $1,012, as of December 31, 2022 and 2021, respectively 13,866 17,002
Prepaid expenses 4,312 6,574
Inventory, net 12,752 18,548
Other current assets 6,765 999
Total current assets 82,115 102,157
Property and equipment, net of accumulated depreciation 2,603 4,382
Intangible assets, net of accumulated amortization 305,087 335,980
Right of use asset, net of accumulated amortization 5,287 6,751
Restricted cash 255 6,189
Other assets 248 11
Total assets 395,595 455,470
Current liabilities:    
Accounts payable 9,809 10,845
Accrued expenses and other current liabilities 23,680 28,605
Current portion of liability related to sale of future royalties   4,460
Current portion of lease liability 1,545 8,186
Current portion of acquired contingent consideration 2,532 1,929
Deferred revenue 384  
Total current liabilities 37,950 54,025
Convertible senior notes 167,031 151,025
Derivative liability 0 37
Non-current portion of acquired contingent consideration 38,668 47,671
Non-current portion of loans payable   27,645
Deferred tax liability 44,202 13,930
Non-current portion of lease liability 4,341 4,086
Other non-current liabilities 9,781 5,914
Commitments and contingencies
Stockholders’ equity:    
Preferred stock, $0.001 par value per share. Authorized 1,000,000 shares at December 31, 2022 and 2021; no shares issued as of December 31, 2022 and 2021  
Common stock, $0.001 par value per share. Authorized 61,666,666 shares at December 31, 2022 and 2021; issued 24,343,239 and 13,249,802 shares, including those held in treasury, as of December 31, 2022 and 2021, respectively 24 13
Treasury stock at cost (5,543 shares at December 31, 2022 and December 31, 2021) (638) (638)
Additional paid-in capital 1,029,881 1,023,136
Accumulated deficit (936,273) (870,357)
Accumulated other comprehensive loss 628 (1,017)
Total stockholders’ equity 93,622 151,137
Total liabilities and stockholders’ equity $ 395,595 $ 455,470
v3.22.4
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Statement Of Financial Position [Abstract]    
Trade accounts receivable, allowances (in dollars) $ 842 $ 1,012
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 24,343,239 13,249,802
Treasury stock, shares 5,543 5,543
v3.22.4
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Revenues:    
Total net revenues $ 118,566 $ 129,071
Costs and expenses:    
Cost of sales 30,332 40,787
Research and development 5,804 10,420
Selling, general and administrative 106,256 124,399
Amortization of intangible assets 30,764 30,764
Changes in fair value of derivative liability (37) (1,156)
Changes in fair value of acquired contingent consideration (6,659) 2,895
Other operating income (12,554)  
Total operating expenses 153,906 208,109
Operating loss (35,340) (79,038)
Other income (expense), net:    
Interest and amortization of debt discount expense (30,200) (30,035)
Interest income 1,909 5
Realized Gain (Loss) on FX Currency (8)  
Gain on extinguishment of debt 27,142  
Other income (expense) 1,250 (6)
Total other income (expense), net 93 (30,036)
Loss before taxes (35,247) (109,074)
Benefit from (Provision for) income taxes (30,669) 5,120
Net loss $ (65,916) $ (103,954)
Net loss per share—basic $ (3.34) $ (9.79)
Net loss per share—diluted $ (3.34) $ (9.79)
Weighted average common shares outstanding used in computing net loss per share—basic 19,707 10,621
Weighted average common shares outstanding used in computing net loss per share—diluted 19,707 10,621
Net Product Revenues    
Revenues:    
Total net revenues $ 103,845 $ 114,189
Royalty Revenues    
Revenues:    
Total net revenues 14,221 $ 14,882
License Revenue    
Revenues:    
Total net revenues $ 500  
v3.22.4
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Statement Of Income And Comprehensive Income [Abstract]    
Net loss $ (65,916) $ (103,954)
Other comprehensive income:    
Foreign currency translation adjustment 1,645 1,786
Other comprehensive income, net of tax 1,645 1,786
Comprehensive loss $ (64,271) $ (102,168)
v3.22.4
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, 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 1,635     1,635    
Compensation expense and issuance of restricted stock to employees 1,295     1,295    
Compensation expense and issuance of restricted stock to employees (in shares)   89        
Interest payment for convertible notes 12,420 $ 4   12,416    
Interest payment for convertible notes (in shares)   3,685        
Other comprehensive (loss) income, net of tax 1,786         1,786
Net loss (103,954)       (103,954)  
Balance at Dec. 31, 2021 151,137 $ 13 (638) 1,023,136 (870,357) (1,017)
Balance (in shares) at Dec. 31, 2021   13,250        
Compensation expense for issuance of stock options to employees 1,496     1,496    
Compensation expense and issuance of restricted stock to employees (3)     (3)    
Compensation expense and issuance of restricted stock to employees (in shares)   101        
Interest payment for convertible notes 5,263 $ 11   5,252    
Interest payment for convertible notes (in shares)   10,992        
Other comprehensive (loss) income, net of tax 1,645         1,645
Net loss (65,916)       (65,916)  
Balance at Dec. 31, 2022 $ 93,622 $ 24 $ (638) $ 1,029,881 $ (936,273) $ 628
Balance (in shares) at Dec. 31, 2022   24,343        
v3.22.4
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Cash flows from operating activities:    
Net loss $ (65,916) $ (103,954)
Adjustments to reconcile net loss to net cash used in operating activities:    
Share-based compensation expense 1,493 2,995
Amortization of debt discount and debt issuance costs 16,923 16,276
Depreciation and amortization expense 32,809 33,953
Change in contingent consideration obligation (6,659) 2,895
Change in derivative liability (37) (1,156)
Gain on debt extinguishment (27,142)  
Non-cash royalty revenue (4,762) (12,106)
Deferred tax provision (benefit) 30,669 (5,186)
Changes in assets and liabilities:    
Decrease in accounts receivable 2,585 3,191
Decrease (increase) in prepaid expenses and other current assets (2,959) 8,419
Decrease in inventory 5,796 7,860
Increase in other assets (237) 0
Increase (decrease) in accounts payable, accrued expenses and other current liabilities (7,359) 1,108
Increase in other non-current liabilities 3,872 4,357
Net cash (used) in operating activities (20,924) (41,348)
Cash flows from investing activities:    
Purchases of property and equipment (136) (165)
Purchases of intangible assets   (26)
Proceeds from sale of Chelsea facility, net   73,969
Net cash provided by investing activities (136) 73,778
Cash flows from financing activities:    
Repayment of Convertible Senior Notes Due 2021   (69,000)
Repayment of loans payable   (655)
Net cash (used) in financing activities   (69,655)
Effect of exchange rate changes on cash and cash equivalents and restricted cash 512 (447)
Net (decrease) in cash and cash equivalents and restricted cash (20,548) (37,672)
Cash, cash equivalents and restricted cash at beginning of period 65,223 102,895
Cash, cash equivalents and restricted cash at end of period 44,675 65,223
Supplemental disclosure:    
Cash paid for interest 7,157 6
Cash paid for taxes $ 199 $ 50
v3.22.4
Organization and Business Activities
 12 Months Ended
Dec. 31, 2022
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.
v3.22.4
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2022
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.

Basis of Presentation

On December 31, 2020, the Company filed an amendment to its Certificate of Incorporation which effected a 1-for-6 reverse stock split of the shares of its outstanding common stock and proportionate reduction in the number of authorized shares of its common stock from 370,000,000 to 61,666,666. The Company’s common stock began trading on a split-adjusted basis on The Nasdaq Global Select Market commencing upon market open on January 4, 2021. 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 the Company’s 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 the Company’s common stock.

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 convertible senior secured notes due 2024, which is marked to market each quarter based on a binomial model, 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. The Company maintains cash balances in excess of insured limits. As of March 13, 2023, the Company had approximately $8.3 million on deposit with SVB, which represented approximately 22% of the Company’s unrestricted cash and cash equivalents as of December 31, 2022. On March 12, 2023, federal regulators announced that the FDIC would complete its resolution of SVB in a manner that fully protects all depositors. As a result, the Company does 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 the 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 December 31, 2022, 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. See Note 8 to the Company’s Consolidated Financial Statements included in this report for a discussion of interest payments on the outstanding convertible senior secured notes due 2024.

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, 2022

 

 

December 31, 2021

 

 (In thousands)

 

Beginning of period

 

 

End of period

 

 

Beginning of period

 

 

End of period

 

Cash and cash equivalents

 

$

45,634

 

 

$

37,536

 

 

$

71,369

 

 

$

45,634

 

Restricted cash

 

 

13,400

 

 

 

6,884

 

 

 

12,917

 

 

 

13,400

 

Restricted cash-non current

 

 

6,189

 

 

 

255

 

 

 

18,609

 

 

 

6,189

 

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

 

$

65,223

 

 

$

44,675

 

 

$

102,895

 

 

$

65,223

 

 

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. There were no investments classified as short-term or long-term at December 31, 2022 or 2021.

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, 2022 and 2021. The cumulative foreign currency translation adjustment reported in Other

Comprehensive Income (Loss) was $1.6 million and $1.8 million for the period ended December 31, 2022 and 2021, 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. 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.

The following table provides the major classes of inventory:

 

 (In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Raw materials

 

$

6,212

 

 

$

3,338

 

Finished goods

 

 

6,540

 

 

 

15,210

 

Total

 

$

12,752

 

 

$

18,548

 

 

Ampyra

Prior to October 2022, the cost of Ampyra inventory manufactured by Alkermes plc (Alkermes) was based on agreed upon pricing with Alkermes. In the event Alkermes does not manufacture the products, Alkermes was 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. No payments were made for the years ended December 31, 2022 and 2021.

In October 2022, an arbitration panel issued a decision in our dispute with Alkermes and ruled that the existing license and supply agreements with Alkermes are unenforceable. As a result of the panel’s ruling, the Company no longer has to pay Alkermes any royalties on net sales for license and supply of Ampyra, and the Company is free to use alternative sources for supply of Ampyra, which they have already secured for U.S. supply.

The Company had previously designated Patheon, Inc. as a 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. Patheon now supplies the Company with its Ampyra needs.

On September 30, 2010, the Company entered into a world-wide manufacturing services agreement with Patheon, Inc. as a second manufacturer for Ampyra (Dalfampridine-ER tablets, 10mg). Under the manufacturing services agreement, the Company agreed to purchase from Patheon, on a non-exclusive basis, a portion of our requirements for Ampyra in the United States. The Company pays Patheon a fixed per bottle fee (60 tablets per bottle) based on the annual quantity of Ampyra bottles that are delivered for sale. As a result of the arbitration ruling in October 2022, the Company was free to obtain supply of Ampyra from alternative sources and Patheon became the Company's sole manufacturer and packager of Ampyra for sales in the United States.

The manufacturing services agreement is automatically renewed for successive one-year periods on December 31 of each year, unless either the Company or Patheon provide the other party with at least 12-months’ prior written notice of non-renewal. Either party may terminate manufacturing services agreement by written notice under certain circumstances, including material breach (subject to specified cure periods) or insolvency. The Company may also terminate the manufacturing services agreement upon certain regulatory actions or objections. Patheon may terminate the manufacturing services agreement if the Company assigns the agreement to a third party under certain circumstances.

The manufacturing services agreement contains customary representations, warranties and covenants, including with respect to the ownership of any intellectual property created pursuant to the manufacturing services agreement, as well as

provisions relating to ordering, payment and shipping terms, regulatory matters, reporting obligations, indemnity, confidentiality and other matters.

The Company relies on a single third-party manufacturer to supply dalfampridine, the active pharmaceutical ingredient, or API, in Ampyra, and also on a single supplier for a critical excipient used in the manufacture of Ampyra. If these companies experience any disruption in their operations, the Company's supply of Ampyra could be delayed or interrupted until the problem is solved or the Company locates another source of supply or another packager, which may not be available. The Company may not be able to enter into alternative supply or packaging arrangements on terms that are commercially reasonable, if at all. Any new supplier or packager would also be required to qualify under applicable regulatory requirements. Because of these and other factors, the Company could experience substantial delays before they are able to obtain qualified replacement products or services from any new supplier or packager.

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.

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 the Company or its 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.

Due to the Company's Asset Purchase and License agreement between Civitas, the Company's wholly owned subsidiary, and Alkermes in December 2010, the Company has recognized contingent consideration. See Note 14 to the Company’s Consolidated Financial Statements included in this report for a discussion on the Alkermes ARCUS agreement. Refer to Note 13 – Fair Value Measurements for more information about the contingent consideration liability.

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 year-ended December 31, 2022, 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, 2022. The Company performed a recoverability test as of December 31, 2022 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. During the year ended December 31, 2022, no other impairment indicators were noted by the Company. 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 (the “Biogen Collaboration Agreement”), up to an agreed upon threshold of royalties. This threshold was met during the second quarter of 2022 and its obligations to HCRP expired upon Biogen's payment of royalties for that quarter. As a result, the full benefit of the Fampyra royalty revenue reverted back to the Company and the Company will continue to receive the Fampyra royalty revenue from Biogen until the revenue stream ends. As of December 31, 2022 the liability related to the sale of future royalties is $0.

Prior to satisfying its obligation to HCRP, since the Company maintained rights under the Biogen Collaboration Agreement, the Royalty Agreement has been accounted for as a liability that was 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 estimated the total amount of future net royalty payments 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 was 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 was affected by the amount and timing of net royalty revenue recognized and changes in forecasted revenue. On a quarterly basis, the Company reassessed the effective interest rate and adjusted 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. Because of its limited financial resources, the Company previously suspended work on proprietary research and development programs, and has performed feasibility studies for potential collaborations with other companies that express interest in formulating their novel molecules for pulmonary delivery using the Company’s proprietary ARCUS technology.

Employee Retention Credit under the CARES Act

The Employee Retention Credit (ERC) was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136 to provide a quarterly per employee credit to eligible businesses based on a percentage of qualified wages and health insurance benefits paid to employees. For the years ended December 31, 2022 and December 31, 2021, the Company classified $0 and $4.2 million in credits received as a reduction to payroll tax expense in the Consolidated Statement of Operations, respectively.

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

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. As of December 31, 2022, the Company had contract liabilities of $6.1 million, which is the upfront payment received as part of the Esteve Germany distribution agreement entered into in 2021. The Company did not have any contract assets as of December 31, 2022 or 2021.

Product Revenues, Net

Inbrija is distributed in the U.S. primarily through: a specialty pharmacy associated with the Company’s e-prescribing program, described below; AllianceRx Walgreens Prime, or Walgreens, a specialty pharmacy that delivers the medication to patients by mail; the cash pay program through Sterling and ASD Specialty Healthcare, Inc. (an Amerisource Bergen affiliate). During the three-month period ended December 31, 2020, the Company completed the transition from a network of several specialty pharmacies to Walgreens as the sole specialty pharmacy for U.S. sales of Inbrija. In 2022, the Company implemented an e-prescribing program for the distribution of Inbrija in the U.S. through a specialty pharmacy that supports electronic prescriptions. The Company believes the convenience of electronic prescribing may be preferred by some physicians and patients.

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

Net revenues 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, such as specialty pharmacy companies. 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

Revenues 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 the Company’s allowances and accruals requiring critical estimates, and the specific considerations it uses in estimating their amounts are as follows:

Government Chargebacks and Rebates: The Company contracts for Medicaid and other U.S. federal government programs to allow for its 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 on the Company’s contracts and the most recent experience with respect to sales through each of these channels, the Company provides an allowance for chargebacks and rebates. The Company monitors 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: The Company contracts 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 the Company’s product is placed on a specific tier on the organization’s drug formulary. Based on the Company’s contracts and the most recent experience with respect to sales through managed care channels, the Company provides an allowance for managed care contract rebates. The Company monitors 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: The Company offers copay mitigation to commercially insured patients who have coverage for their products (in accordance with applicable law) and are responsible for a cost share. Based on the Company’s contracts and the most recent experience with respect to actual copay assistance provided, the Company's provides an allowance for copay mitigation rebates. The Company monitors the sales trends and adjust the rebate percentages on a regular basis to reflect the most recent rebate experience.

Cash Discounts: The Company sells directly to companies in their distribution network, which primarily includes specialty pharmacies, which deliver the medication to patients by mail, and ASD Specialty Healthcare, Inc. (an AmerisourceBergen affiliate). The Company generally provides invoice discounts for prompt payment for its products. The Company estimates its cash discounts based on the terms offered to its 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. The Company adjusts estimates based on actual activity as necessary.

Product Returns: The Company offers 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: The Company has contracted with certain specialty pharmacies to obtain transactional data related to its products in order to develop a better understanding of its selling channel as well as patient activity and utilization by the Medicaid program and other government agencies and managed care organizations. The Company pays a variable fee to the specialty pharmacies to provide the Company the data. The Company also pays the specialty pharmacies a fee in exchange for providing distribution and inventory management services, including the provision of inventory management data to the Company. The Company estimates its fee for service accruals and allowances based on sales to each specialty pharmacy and the applicable contracted rate.

Royalty Revenues

Royalty revenues recorded by the Company relate to the Company’s License and Collaboration agreement with Biogen for sales of Fampyra, and an agreement with Neurelis Inc. for sales of Valtoco. Royalty revenue from Neurelis are capped at $5.1 million, of which $3.8 million has been recorded through December 31, 2022.

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 Revenues

License revenues relates to the 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 revenues under ASC 606, which provides constraints for entities to recognize license revenues 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 revenues 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 revenues upon the achievement of the specific sale milestones.

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from upfront license fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other rights and obligations, the Company determines whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, the Company uses its judgment in determining the appropriate method of measuring progress for purposes of recognizing revenue from the up-front license fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Esteve Germany and Spain Distribution and Supply Agreement

In November 2021, the Company entered into distribution and supply agreements with Esteve Pharmaceuticals to commercialize Inbrija in Germany. Under the terms of the distribution agreement, the Company received a $5.9 million upfront payment, and is entitled to receive additional sales-based milestones. Under the terms of the supply agreement, the Company is entitled to receive a significant double-digit percent of the selling price of Inbrija in exchange for supply of the product. Esteve launched in Germany in June 2022, and expects to launch in Spain in February 2023.

The Company assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, Esteve, is a customer. The Company identified the following promises in the arrangement: the trademark license and marketing and distribution rights and the supply of minimum purchase commitments. The Company further determined that the promise for additional supply exceeding minimum purchase commitments represented a customer option, which would create an obligation for the Company if exercised by Esteve. No additional or material upfront consideration is owed to the Company by Esteve upon exercise of the customer option for the right to additional supply and it is offered at the same percent of selling price as the supply of minimum purchase commitments. Accordingly, it was assessed as a material right and, therefore, a separate performance obligation in the arrangement. The Company then determined that the trademark license and marketing and distribution rights and the supply of minimum purchase commitments were not distinct from one another and must be combined as a performance obligation. Based on this determination, as well as the considerations noted above with respect to the material right for additional supply, the Company identified two distinct performance obligations at the inception of the contract: (i) the combined performance obligation, (ii) the material right for additional supply.

As of December 31, 2022, the Company had contract liabilities of $6.1 million, as compared to $5.9 million as of December 31, 2021, which is the upfront payment received as part of the Esteve Germany distribution agreement entered into in 2021, and pre-payment of product ordered as part of the Esteve Spain supply agreement entered into in 2021. The Company did not have any contract assets as of December 31, 2022 or 2021. The Company launched Inbrija in Germany in June 2022 and Spain in March 2023. The Company recognized $2.9 million of revenues during the period ended December 31, 2022 from the supply agreement with Esteve Pharmaceuticals. As of December 31, 2022, approximately $0.7 million of revenue is expected to be recognized from remaining performance obligations for the Esteve agreement. The Company expects to recognize revenue of these remaining performance obligations over the next 12 years in Germany and 13 years in Spain, with the balance recognized thereafter. The Company will re-evaluate the transaction price in each reporting period and as certain events are resolved or other changes in circumstances occur.

Additionally, the Company is eligible to receive additional payments based on the achievement by Esteve of sales-based milestones. Variable consideration related these sales-based milestones was fully constrained due to the fact that it was probable that a significant reversal of cumulative revenue would occur, given the inherent uncertainty of success with these future milestones.

The following table disaggregates the Company’s revenues by major source (in thousands):

 

 (In thousands)

Fiscal Year Ended December 31, 2022

 

 

Fiscal Year Ended December 31, 2021

 

Revenues:

 

 

 

 

 

Net product revenues:

 

 

 

 

 

Ampyra

$

72,945

 

 

$

84,555

 

Inbrija U.S.

 

27,989

 

 

 

29,634

 

Inbrija ex-U.S.

 

2,911

 

 

 

—

 

Total net product revenues

 

103,845

 

 

 

114,189

 

Royalty Revenues

 

14,221

 

 

 

14,882

 

License Revenue

 

500

 

 

 

—

 

Total net revenues

$

118,566

 

 

$

129,071

 

 

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 and Inbrija. 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. Prior to the sale of the facility in February 2021, the Company leased a manufacturing facility in Chelsea, Massachusetts which produced Inbrija for clinical trials and commercial supply.

Prior to October 2022, the Company relied primarily on Alkermes for its supply of Ampyra. Under its supply agreement with Alkermes, the Company was obligated to purchase at least 75% of its yearly supply of Ampyra from Alkermes, and was also required to make compensatory payments if it did not purchase 100% of its requirements from Alkermes, subject to certain specified exceptions. The Company and Alkermes agreed that the Company may purchase up to 25% of its annual requirements from Patheon, a mutually agreed-upon second manufacturing source, with compensatory payments. The Company and Alkermes also relied on a single third-party manufacturer, Regis, to supply dalfampridine, the active pharmaceutical ingredient, or API, in Ampyra.

In October 2022, an arbitration panel issued a decision in the Company's dispute with Alkermes and awarded to the Company approximately $18.3 million including prejudgment interest and declared the Company's agreements with Alkermes unenforceable. Of the total award amount of $18.3 million, the Company recorded $16.6 million as a reduction to operating expenses and $1.7 million as interest income. As a result of the panel’s ruling, the Company no longer has to pay Alkermes any royalties on net sales for license and supply of Ampyra. The Company had previously designated Patheon, Inc. as a 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. Patheon now supplies the Company with its Ampyra needs.

The Company relies on a single third-party manufacturer to supply dalfampridine, the active pharmaceutical ingredient, or API, in Ampyra, and also on a single supplier for a critical excipient used in the manufacture of Ampyra. If these companies experience any disruption in their operations, the Company's supply of Ampyra could be delayed or interrupted until the problem is solved or the Company locates another source of supply or another packager, which may not be available. The Company may not be able to enter into alternative supply or packaging arrangements on terms that are

commercially reasonable, if at all. Any new supplier or packager would also be required to qualify under applicable regulatory requirements. Because of these and other factors, the Company could experience substantial delays before they are able to obtain qualified replacement products or services from any new supplier or packager.

The Company’s principal direct customers for the year ended December 31, 2022 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. Five customers individually accounted for more than 10% of the Company’s revenues and approximately 91% of total revenues in 2022, and approximately 91% of total revenues in 2021. Four customers individually accounted for more than 10% of the Company’s accounts receivable and approximately 85% of total accounts receivable as of December 31, 2022, and approximately 92% of total accounts receivable as of December 31, 2021.

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 $1.8 million and $2.0 million for the years ended December 31, 2022 and 2021, respectively. The Company’s reserve for cash discount allowances was $0.4 million and $0.8 million as of December 31, 2022 and 2021, respectively.

 

(in thousands)

 

Cash
Discounts

 

Balance at December 31, 2020

 

$

575

 

Allowances for sales

 

 

1,992

 

Actual credits

 

 

(1,787

)

Balance at December 31, 2021

 

$

780

 

Allowances for sales

 

$

1,830

 

Actual credits

 

$

(2,203

)

Balance at December 31, 2022

 

$

407

 

 

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 recognized an allowance for doubtful accounts of $0.1 million and $0.2 million as of December 31, 2022 and December 31, 2021, respectively. The Company recognized a net credit of $0.1 million and provisions and write-offs of $0.2 million for the years ended December 31, 2022 and December 31, 2021, respectively.

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 $3.4 million and $1.0 million for the years ended December 31, 2022 and December 31, 2021, respectively. The Company made a payment of $3.2 million and $1.5 million related to the chargebacks allowances for the years ended December 31, 2022 and December 31, 2021, respectively. The Company’s reserve for chargebacks allowance were $0.3 million as of December 31, 2022 and negligible as of December 31, 2021.

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 secured notes due 2024 were measured at fair value based on market quoted prices of the debt securities; and
(e)
Derivate liability related to conversion options of the convertible senior secured notes due 2024 is measured at fair value using a binomial model.

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 options 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. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable, at each reporting period. See Note 16 to the Company’s Consolidated Financial Statements included in this report for a discussion on earnings (loss) per share.

Share‑based Compensation

The Company has various share‑based employee and non-employee compensation plans. See Note 7 to the Company’s Consolidated Financial Statements included in this report for a discussion of share-based compensation.

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 operations 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 for the years ended December 31, 2022 and December 31, 2021, respectively.

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.

Liquidity

The Company’s ability to meet its future operating requirements, repay its liabilities, meet its other obligations, and continue as a going concern are dependent upon a number of factors, including its ability to generate cash from product sales, reduce expenditures, and obtain additional financing. If the Company is unable to generate sufficient cash flow from the sale of its products, the Company 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 the Company 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.

As of December 31, 2022, the Company had cash, cash equivalents, and restricted cash of approximately $44.7 million. Restricted cash includes $6.2 million in escrow related to the 6% semi-annual interest portion of our convertible senior secured notes due June 2024, which interest is payable in cash or stock. If the Company elects to pay interest due in stock, and have the available shares to do so, a corresponding amount of restricted cash will be released from escrow. In connection with the June 1, 2022 interest payment on the 2024 notes, the Company issued an aggregate of 10,992,206 shares of common stock to holders of the notes and, to certain holders who delivered beneficial ownership limitation notices under the indenture governing the 2024 notes, cash interest payments of $0.9 million. In connection with the interest payment, $6.2 million was released from escrow and became available to us for other purposes. In connection with the December 1, 2022 interest payment of the 2024 notes the Company paid $6.2 million from restricted escrow cash. The Company incurred net losses of $65.9 million and $104.0 million for the years ended December 31, 2022 and 2021, respectively. In addition, in October 2022, the Company received $16.5 million and in December received an additional $1.8 million from Alkermes following a final decision of an arbitration panel regarding a dispute over licensing royalties relating to Ampyra.

The Company assesses and determines its ability to continue as a going concern in accordance with the provisions of ASC Topic 205-40, “Presentation of Financial Statements—Going Concern” (“ASC Topic 205-40”), which requires the Company to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date that its annual and interim consolidated financial statements are issued. Certain additional financial statement disclosures are required if such conditions or events are identified. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting. Determining the extent, if any, to which conditions or events raise substantial doubt about the Company’s ability to continue as a going concern, or the extent to which mitigating plans sufficiently alleviate any such substantial doubt, as well as whether or not liquidation is imminent, requires significant judgement by management. The Company has evaluated whether

there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements contained in this report are issued.

On June 22, 2022, the Company received a deficiency letter from Nasdaq Stock Market, LLC (“Nasdaq”) notifying the Company that, for 30 consecutive business days, the bid price for the Company’s common stock had closed below $1.00 per share, which is the minimum closing price required to maintain continued listing on the Nasdaq Global Select Market under Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Requirement”). The Company had 180 calendar days to regain compliance with the Minimum Bid Requirement.

On November 11, 2022, the Company held a special meeting of stockholders in order authorize the Board of Directors to approve the amendment and restatement of our Certificate of Incorporation to effect a reverse stock split at a ratio of any whole number in the range of 1-for-2 to 1-for-20 within one year following the conclusion of the special meeting, which proposal was approved by stockholders.

After a hearing with the Nasdaq Hearings Panel in February 2023, the Company was granted an extension until June 20, 2023 to regain compliance with the Minimum Bid Requirement. In the event the Company does not achieve compliance with the Minimum Bid Requirement by June 20, 2023, the Company has committed to effecting the reverse stock split authorized by our stockholders in November 2022. However, there can be no assurance that the Company will achieve compliance with the Minimum Bid Requirement even with effecting the reverse stock split.

On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (the “FDIC”) as receiver. As of March 13, 2023, the Company had approximately $8.3 million on deposit with SVB, which represented approximately 22% of the Company’s unrestricted cash and cash equivalents as of December 31, 2022. On March 12, 2023, federal regulators announced that the FDIC would complete its resolution of SVB in a manner that fully protects all depositors. As a result, the Company does not anticipate any losses with respect to its funds that had been deposited with SVB.

The Company believes that its existing cash and cash equivalents will be sufficient to cover its cash flow requirements for at least the next twelve months from the issuance date of these financial statements. However, the Company’s future requirements may change and will depend on numerous factors, some of which may be beyond the Company’s control.

Recent 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 intra-period 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.

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. The Company adopted this guidance effective January 1, 2022. The adoption of this guidance did not have a significant impact on the consolidated financial statements.

Recent 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 March, 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses: Troubled Debt Restructurings and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for Troubled Debt Restructurings by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. This update also includes amendments which require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The ASU is effective for entities that have adopted the amendments in Update 2016-13 for fiscal years beginning after December 15, 2022, 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.

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 was a subsequent event that required disclosure or adjustment in these financial statements. See Note 18 to the Company's Consolidated Financial Statements included in this report for a discussion of subsequent events.
v3.22.4
Leases
 12 Months Ended
Dec. 31, 2022
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. The Company elected the package of practical expedients which permits the Company 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. The Company 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 the Company’s previously reported consolidated statements of operations and did not result in a cumulative catch-up adjustment to opening equity.

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. The Company’s leases have remaining lease terms of 4 years to 5.5 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. The Company has 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, the Company 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

The Company leases 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; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Ardsley, New York

The Company was previously headquartered at a leased facility in Ardsley, New York with approximately 160,000 square feet of space. In September 2021, the Company sent the landlord notice of exercise of its early termination option under the lease, which was effective on June 22, 2022. In connection with the lease termination, the Company paid an early termination fee of approximately $4.7 million. Concurrent with the Ardsley lease termination, in June 2022, the Company relocated its corporate headquarters to a substantially smaller subleased office in Pearl River, New York, described below.

 

Pearl River, New York

In June 2022, the Company entered into a 6-year sublease for an aggregate of approximately 21,000 square feet of space in Pearl River, New York. The Company has no options to extend the term of the sublease. The Pearl River sublease provides for monthly payments of rent during the lease term. The base rent is currently $0 through December 31, 2022, with payments commencing on January 1, 2023 with a base rent of $0.3 million per year, subject to an annual 2.0% escalation factor in each subsequent year thereafter.

Chelsea, Massachusetts

The Company’s Civitas subsidiary leased a manufacturing facility in Chelsea, Massachusetts which it used to manufacture Inbrija through February 10, 2021. On February 10, 2021, the Company completed the sale of its Chelsea manufacturing operations to Catalent Pharma Solutions and assigned the lease of the Chelsea facility to a Catalent affiliate.

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 added a new size 7 spray dryer manufacturing production line for Inbrija and other ARCUS products that has greater capacity than the existing size 4 spray dryer manufacturing production line, and created additional warehousing space for manufactured product. All costs to renovate and expand the facility through the date of assignment to Catalent were borne by the Company. Since the February 10, 2021 sale of the manufacturing operations, Catalent has been responsible for finalizing the expansion, including obtaining needed regulatory approvals. However, given the potential importance of the expansion to the Company’s business, effective January 1, 2023 the Company agreed under the terms of the New MSA in March 2023 to pay Catalent $2 million in 2023 in connection with certain activities relating to the operational readiness of the size 7 spray dryer. Furthermore, the Company has agreed to fund up to $2 million of Catalent’s costs to complete the size 7 spray dryer expansion, which will be payable by the Company in four quarterly installments beginning September 30, 2023.

Waltham, Massachusetts

In October 2016, the Company 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 $1.2 million per year.

The Company’s leases have remaining lease terms of 4 years to 5.5 years, which reflects the exercise of the early termination of the Company’s Ardsley, NY lease as described above. The weighted-average remaining lease term for its operating leases was 4.4 years at December 31, 2022. The weighted-average discount rate was 7.92% at December 31, 2022.

ROU assets and lease liabilities related to the Company’s operating leases are as follows:

 (In thousands)

 

Balance Sheet Classification

 

December 31, 2022

 

 

December 31, 2021

 

Right-of-use assets

 

Right of use assets

 

$

5,287

 

 

$

6,751

 

Current lease liabilities

 

Current portion of lease liabilities

 

 

1,545

 

 

 

8,186

 

Non-current lease liabilities

 

Non-current portion of lease liabilities

 

 

4,341

 

 

 

4,086

 

 

 

The Company has lease agreements that contain both lease and non-lease components. The Company accounts 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,

 

 

Year ended December 31,

 

 (In thousands)

 

2022

 

 

2021

 

Operating lease cost

 

$

3,843

 

 

$

6,030

 

Variable lease cost

 

 

2,005

 

 

 

4,156

 

Short-term lease cost

 

 

8

 

 

 

851

 

Total lease cost

 

$

5,855

 

 

$

11,037

 

 

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

 

 (In thousands)

 

 

 

2023

 

 

1,545

 

2024

 

 

1,588

 

2025

 

 

1,633

 

2026

 

 

1,678

 

2027

 

 

357

 

Later years

 

 

182

 

Total lease payments

 

 

6,983

 

Less: Imputed interest

 

 

(1,097

)

Present value of lease liabilities

 

 

5,886

 

 

Supplemental cash flow information activity related to the Company’s operating leases are as follows:

 

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Operating cash flow information:

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities

 

$

8,191

 

 

$

6,158

 
v3.22.4
Intangible Assets
 12 Months Ended
Dec. 31, 2022
Goodwill And Intangible Assets Disclosure [Abstract]  
Intangible Assets

(4) Intangible Assets

Intangible Assets

Inbrija 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.

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, 2022, 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, 2022

 

 

December 31, 2021

 

(Dollars In thousands)

 

Estimated
Remaining
Useful Lives
(Years)

 

 

Cost

 

 

Disposals

 

 

Accumulated
Amortization

 

 

Net
Carrying
Amount

 

 

Cost

 

 

Additions

 

 

Accumulated
Amortization

 

 

Net
Carrying
Amount

 

Inbrija (1)

 

 

11

 

 

 

423,000

 

 

 

—

 

 

 

(117,927

)

 

 

305,073

 

 

 

423,000

 

 

 

—

 

 

 

(87,164

)

 

 

335,836

 

Website
   development costs

 

1-3

 

 

 

14,585

 

 

 

(3,683

)

 

 

(10,888

)

 

 

14

 

 

 

14,559

 

 

 

26

 

 

 

(14,441

)

 

 

144

 

 

 

 

 

 

$

437,585

 

 

$

(3,683

)

 

$

(128,815

)

 

$

305,087

 

 

$

437,559

 

 

$

26

 

 

$

(101,605

)

 

$

335,980

 

 

 

(1)
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 amortizing the assets upon launch in February 2019.

The Company recorded amortization expenses of $30.9 million of which $30.8 million pertained to the intangible asset related to Inbrija and $0.1 million related to the amortization of website development costs for the year ended December 31, 2022. The Company recorded amortization expense of $31.0 million of which $30.7 million pertained to the intangible asset related to Inbrija and $0.3 million related to the amortization of website development costs related to these intangible assets for the year ended December 31, 2021.

Estimated future amortization expense for intangible assets subsequent to December 31, 2021 is as follows:

(In thousands)

 

 

 

2023

 

$

30,772

 

2024

 

 

30,768

 

2025

 

 

30,764

 

2026

 

 

30,764

 

2027

 

 

30,764

 

Thereafter

 

 

151,255

 

 

 

$

305,087

 

The weighted-average remaining useful lives of all amortizable assets is approximately 11.0 years.
v3.22.4
Property and Equipment
 12 Months Ended
Dec. 31, 2022
Property Plant And Equipment [Abstract]  
Property and Equipment

(5) Property and Equipment

Property and equipment consisted of the following:

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

 

Estimated
useful lives used

Machinery and equipment

 

$

2,315

 

 

$

2,315

 

 

2-7 years

Leasehold improvements

 

 

1,761

 

 

 

15,317

 

 

Lesser of useful life or remaining lease term

Computer equipment

 

 

4,467

 

 

 

17,973

 

 

1-3 years

Laboratory equipment

 

 

582

 

 

 

1,644

 

 

2-5 years

Furniture and fixtures

 

 

233

 

 

 

2,130

 

 

4-7 years

 

 

 

9,358

 

 

 

39,379

 

 

 

Less accumulated depreciation

 

 

(6,755

)

 

 

(34,997

)

 

 

 

 

$

2,603

 

 

$

4,382

 

 

 

 

Depreciation and amortization expense on property and equipment was $1.9 million and $2.9 million for the years ended December 31, 2022 and 2021, respectively.
v3.22.4
Assets Held for Sale
 12 Months Ended
Dec. 31, 2022
Property Plant And Equipment [Abstract]  
Assets Held for Sale

(6) Assets Held for Sale

On January 12, 2021, the Company and Catalent entered into an asset purchase agreement, pursuant to which the Company agreed to sell to Catalent certain assets related to the Company’s manufacturing activities located at the facilities situated in Chelsea, Massachusetts (the “Chelsea Facility”) and Waltham, Massachusetts (the “Waltham Facility”), for a purchase price of $80 million, plus an additional $2.3 million for raw materials transferred, and the assumption by Catalent of certain liabilities relating to such manufacturing activities. The Company closed the transaction on February 10, 2021. The Company determined that the criterion to classify the Chelsea manufacturing operations as assets held for sale within the Company’s consolidated balance sheet effective December 31, 2020 were met. Accordingly, the assets were classified as current assets held for sale at December 31, 2020 as the Company, at that time, expected to divest the Chelsea manufacturing operations within the next twelve months.

The classification to assets held for sale impacted the net book value of the assets expected to be transferred upon sale. The estimated fair value of the Chelsea manufacturing operations was determined using the purchase price in the purchase agreement along with estimated broker, accounting, legal, and other selling expenses, which resulted in a fair value less costs to sell of approximately $71.8 million. The carrying value of the assets being classified as held for sale was approximately $129.7 million, which includes property and equipment of $129.6 million and prepaid expenses of $0.1 million. As a result, in February 2021 the Company recorded a loss on assets held for sale of $57.9 million against the Chelsea manufacturing operations. Upon completion of the divestiture, final net proceeds were $74.0 million.
v3.22.4
Common Stock Options and Restricted Stock
 12 Months Ended
Dec. 31, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Common Stock Options and Restricted Stock

(7) Common Stock Options and Restricted Stock

On December 31, 2020, the Company filed an amendment to its Certificate of Incorporation which effected a 1-for-6 reverse stock split of the shares of the Company’s outstanding common stock and proportionate reduction in the number of authorized shares of its common stock from 370,000,000 to 61,666,666 and from 80,000,000 to 13,333,333 as of December 31, 2020 and 2019, respectively. As such, all figures in this report relating to shares of the Company’s 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 the common 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, 2022 was 2,485,342 shares. As of December 31, 2022, the Company had granted an aggregate of 1,955,881 shares as restricted stock or subject to issuance upon exercise of stock options under the 2006 Plan, of which 211,293 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 were made under the 2006 Plan after the effective date 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, 2022 is 3,150,000 shares, plus shares underlying cancelled awards under the 2006 plan after the adoption of the 2015 plan. As of December 31, 2022, the Company had granted an aggregate of 1,337,280 shares either as restricted stock or shares subject to issuance upon the exercise of stock options under the 2015 Plan, of which 644,371 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. In 2022, no new stock option awards were issued under this plan to newly-hired executive officers as an inducement for them to become employed by the Company, and as of December 31, 2022, 170,000 shares remained outstanding and were the only awards that were outstanding under the 2016 Plan.

On June 19, 2019, the Company’s stockholders approved the Company’s 2019 Employee Stock Purchase Plan (the “2019 ESPP”) at the annual meeting of stockholders pursuant to which up to 250,000 shares of the Company’s common stock, par value $0.001 per share may be issued thereunder (the “Plan Shares). As of December 31, 2022, there were 250,000 shares of common stock remaining authorized for issuance under the 2019 ESPP.

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,

 

 

 

2022

 

 

2021

 

Employees and directors:

 

 

 

 

 

 

Estimated volatility%

 

 

84.19

%

 

 

84.26

%

Expected life in years

 

 

6.70

 

 

 

6.25

 

Risk free interest rate%

 

 

2.69

%

 

 

1.36

%

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, 2022 and 2021 amounted to approximately $0.84 and $2.57, respectively. No options were granted to non-employees for the years ended December 31, 2022 and 2021.

During the year ended December 31, 2022, the Company granted 97,950 stock options to employees and directors under all plans. The stock options were issued with a weighted average exercise price of $1.18 per share. As a result of these grants, the total compensation charge to be recognized over the estimated service period is $0.08 million, of which $0.05 million was recognized during the year ended December 31, 2022.

Compensation costs for options and restricted stock granted to employees and directors amounted to $1.5 million and $3.0 million, for the years ended December 31, 2022 and 2021, respectively. Of the total compensation cost, there was $0 million compensation cost capitalized in inventory balances for the years ended December 31, 2022 and December 31, 2021, respectively. 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)

 

2022

 

 

2021

 

Research and development

 

$

75

 

 

$

694

 

Selling, general and administrative

 

 

1,421

 

 

 

2,282

 

Cost of sales

 

 

—

 

 

 

19

 

Total

 

$

1,496

 

 

$

2,995

 

 

A summary of share‑based compensation activity for the year ended December 31, 2022 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, 2021

 

 

1,186

 

 

$

94.38

 

 

 

—

 

 

 

—

 

Granted

 

 

98

 

 

 

1.18

 

 

 

—

 

 

 

—

 

Forfeited and expired

 

 

(258

)

 

 

124.14

 

 

 

—

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance at December 31, 2022

 

 

1,026

 

 

$

78.00

 

 

 

5.8

 

 

 

19

 

Vested and expected to vest at December 31, 2022

 

 

1,013

 

 

$

78.97

 

 

 

5.7

 

 

 

18

 

Vested and exercisable at December 31, 2022

 

 

753

 

 

$

104.98

 

 

 

4.6

 

 

 

8

 

 

 

 

Options Outstanding

 

 

Options Exercisable

 

Range of exercise price

 

Outstanding
as of
December 31,
2022
(In thousands)

 

 

Weighted-
average
remaining
contractual life
(In years)

 

 

Weighted-
average
exercise price

 

 

Exercisable
as of
December 31,
2022
(Shares in thousands)

 

 

Weighted-
average
exercise price

 

$0.31 - $3.74

 

 

374

 

 

 

9.0

 

 

$

3.04

 

 

 

105

 

 

$

2.87

 

$3.75 - $14.46

 

 

223

 

 

 

6.7

 

 

 

11.85

 

 

 

221

 

 

 

11.92

 

$15.30 - $182.76

 

 

219

 

 

 

3.3

 

 

 

138.77

 

 

 

217

 

 

 

139.38

 

$182.94 - $240.18

 

 

205

 

 

 

1.8

 

 

 

217.99

 

 

 

205

 

 

 

217.99

 

$246.42 - $246.42

 

 

5

 

 

 

1.3

 

 

 

246.42

 

 

 

5

 

 

 

246.42

 

 

 

 

1,026

 

 

 

5.8

 

 

$

78.00

 

 

 

753

 

 

$

104.98

 

 

Restricted Stock Activity

 

Restricted Stock

 

Number of Shares
(In thousands)

 

Nonvested at December 31, 2021

 

 

116

 

Granted

 

 

—

 

Vested

 

 

(108

)

Forfeited

 

 

(8

)

Nonvested at December 31, 2022

 

$

—

 

 

Unrecognized compensation cost for unvested stock options and restricted stock awards as of December 31, 2022 totaled $0.6 million and is expected to be recognized over a weighted average period of approximately 2.6 years.
v3.22.4
Debt
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Debt

(8) Debt

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 “2024 Notes”) and cash. For each $1,000 principal amount of exchanged 2021 Notes, the Company issued $750 principal amount of the 2024 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 2024 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. The 2021 Notes received by the Company in the Exchange were cancelled in accordance with their terms. Accordingly, upon completion of the Exchange, $69.0 million of the 2021 Notes remained outstanding. On June 15, 2021, the Company repaid the outstanding balance of the 2021 Notes at their maturity date using cash on hand.

The 2024 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 “2024 Indenture”). The 2024 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 2024 Notes will mature on December 1, 2024 unless earlier converted in accordance with their terms prior to such date. Interest on the 2024 Notes is 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. Under the 2024 Indenture, 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. Based on the current market price of the Company’s common stock and the Company’s remaining authorized shares of common stock that are not reserved for other purposes, the Company believes that for the foreseeable future the Company will be unable to make interest payments on the 2024 notes in stock.

The 2024 Notes are 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 adjusted conversion rate for the 2024 Notes is 47.6190 shares of the Company’s common stock per $1,000 principal amount of 2024 Notes, representing an adjusted conversion price of approximately $21.00 per share of common stock. The conversion rate was adjusted to reflect the 1-for-6 reverse stock split effected on December 31, 2020 and is subject to additional adjustments in certain circumstances as described in the 2024 Indenture.

The Company may elect to settle conversions of the 2024 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 2024 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 2024 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 2024 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 adjusted conversion price for a specified period of time and certain other conditions are satisfied.

Holders of the 2024 Notes will have the right, at their option, to require the Company to purchase their 2024 Notes if a fundamental change (as defined in the 2024 Indenture) occurs, such as a delisting of the Company’s common stock from the Nasdaq Global Select Market, in each case, at a repurchase price equal to 100% of the principal amount of the 2024 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date. If a make-whole fundamental change occurs, as described in the 2024 Indenture, and a holder elects to convert its 2024 Notes in connection with such make-whole fundamental change, such holder may be entitled to an increase in the adjusted conversion rate as described in the 2024 Indenture.

Subject to a number of exceptions and qualifications, the 2024 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 2024 Indenture also requires the Company to make an offer to repurchase the 2024 Notes upon the occurrence of certain asset sales.

The 2024 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 2024 Notes when due at maturity, upon any required repurchase, upon declaration of acceleration or otherwise, (iii) failure to convert the 2024 Notes in accordance with the 2024 Indenture and the failure continues for five business days, (iv) not issuing certain notices required by the 2024 Indenture within a timely manner, (v) failure to comply with the other covenants or agreements in the 2024 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 2024 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 2024 Notes may declare all the notes to be due and payable immediately.

The Company determined that the exchange of the 2021 Notes for the 2024 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 2024 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 2024 Notes, including the conversion, put and call features. The Company concluded the conversion features required bifurcation as a derivative. The fair value of the conversion features derivative was determined based on the difference between the fair value of the 2024 Notes with the conversion options and the fair value of the 2024 Notes without the conversion options using a binomial model. The Company determined that the fair value of the derivative upon issuance of the 2024 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 2024 Notes on the closing date, or December 24, 2019. There are several embedded features within the 2024 Notes which, upon issuance, did not meet the conditions for equity classification. As a result, these features were aggregated together and recorded as the derivative liability conversion option. The conversion feature is measured at fair value on a quarterly basis and the changes in the fair value of the conversion feature for the period will be recognized in the consolidated statements of operations.

The Company received stockholder approval on August 28, 2020 to increase the number of authorized shares of the Company’s common stock from 13,333,333 shares to 61,666,666 shares. As a result of the share approval, the Company determined that multiple embedded conversion options met the conditions for equity classification. The Company performed a valuation of these conversion options as of September 17, 2020, which was the date the Company completed certain securities registration obligations for the shares underlying the 2024 Notes. The resulting fair value of these conversion options was $18.3 million, which was reclassified to equity and presented in the statement of stockholder’s equity as of September 30, 2020, net of the $4.4 million tax impact. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The Company performed a valuation of the derivative liability related to certain embedded conversion features that are precluded from equity classification. The fair value of these conversion features was calculated to be negligible as of December 31, 2022.

The outstanding 2024 Note balances as of December 31, 2022 and December 31, 2021 consisted of the following:

 

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Liability component:

 

 

 

 

 

 

Principal

 

$

207,000

 

 

$

207,000

 

Less: debt discount and debt issuance costs, net

 

 

(39,969

)

 

 

(55,975

)

Net carrying amount

 

 

167,031

 

 

 

151,025

 

Equity component

 

 

18,257

 

 

$

18,257

 

Derivative liability-conversion Option

 

$

—

 

 

$

37

 

 

The Company determined that the expected life of the 2024 Notes was equal to the period through December 1, 2024 as this represents the point at which the 2024 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, 2022, the Company recognized $28.4 million of interest expense related to the 2024 Notes at the effective interest rate of 18.13%. The fair value of the Company’s 2024 Notes was approximately $157.3 million as of December 31, 2022.

In connection with the issuance of the 2024 Notes, the Company incurred approximately $5.7 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 2024 Notes is amortized to interest expense over the expected life of the 2024 Notes using the effective interest method.

The following table sets forth total interest expense recognized related to the 2024 Notes for the years ended December 31, 2022 and 2021:

 (In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Contractual interest expense

 

$

12,420

 

 

$

12,420

 

Amortization of debt issuance costs

 

 

1,137

 

 

 

952

 

Amortization of debt discount

 

 

14,870

 

 

 

12,454

 

Total interest expense

 

$

28,427

 

 

$

25,826

 

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”). On December 24, 2019, the Company completed the private exchange of $276.0 million aggregate principal amount of its then-outstanding 2021 Notes for a combination of newly-issued 6.00% Convertible Senior Secured Notes due 2024 (the “2024 Notes”) and cash. The 2021 Notes received by the Company in the exchange were cancelled in accordance with their terms. Accordingly, upon completion of the exchange, $69.0 million of the 2021 Notes remained outstanding. On June 15, 2021, the Company repaid the outstanding balance of the 2021 Notes at their maturity date using cash on hand.

The following table sets forth total interest expense recognized related to the 2021 Notes for the years ended December 31, 2022 and 2021:

 

(In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Contractual interest expense

 

$

—

 

 

$

428

 

Amortization of debt issuance costs

 

 

—

 

 

 

95

 

Amortization of debt discount

 

 

—

 

 

 

934

 

Total interest expense

 

$

—

 

 

$

1,457

 

Non-Convertible Capital Loan

The Company’s Biotie Therapies Ltd. subsidiary received fourteen non-convertible capital loans granted by Business Finland (formerly Tekes) for research and development of specific drug candidates, with an aggregate adjusted acquisition-date fair value of $20.5 million (€18.2 million). The loans were to be repaid only when consolidated retained earnings of Biotie Therapies Ltd. from the development of specific loan-funded product candidates is sufficient to fully repay the loans. In light of the decision to let lapse all patents having resulted from the funded projects, the Company filed an application with Business Finland for waiver of the loans and accrued interest. In July 2022, Business Finland granted these waivers, which became effective upon Biotie’s compliance with specified conditions to be completed, including a residual payment of approximately $0.1 million for one of the loans. As of December 31, 2022, Biotie Therapies Ltd. met the conditions for the waivers to be effective. The Company recorded a gain on extinguishment of debt of $27.1 million for the carrying amount including interest.

Research and Development Loans

In addition to the non-convertible capital loans described above, Research and Development Loans (“R&D Loans”) were granted to Biotie by Business Finland with an acquisition-date fair value of $2.9 million (€2.6 million) and a carrying value of $0 as of December 31, 2021. These loans were repaid in equal annual installments from January 2017 through January 2021.

Letters of Credit

As of December 31, 2022, the Company has $0.3 million of cash collateralized standby letters of credit outstanding. See Note 2 to the Company’s Consolidated Financial Statements included in this report for a discussion of Restricted Cash.
v3.22.4
Liability Related to Sale of Future Royalties
 12 Months Ended
Dec. 31, 2022
Deferred Revenue Disclosure [Abstract]  
Liability Related to Sale of Future Royalties

(9) 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 (the “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 Biogen Collaboration Agreement up to an agreed upon threshold of royalties. This threshold was met during the second quarter of 2022 and its obligations to HCRP expired upon Biogen’s payment of royalties for that quarter.

Since the Company maintained rights under the Biogen Collaboration Agreement, 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 was 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 received by HCRP. The total net royalties paid, less the net proceeds received is recorded to interest expense using the effective interest method over the life of the Royalty Agreement. The Company estimated the payments made to HCRP over the term of the Royalty Agreement based on forecasted royalties and calculated the interest rate required to discount such payments back to the liability balance. Over the course of the Royalty Agreement, the actual interest rate was affected by the amount and timing of net royalty revenue recognized and changes in the forecasted revenue. On a quarterly basis, the Company reassessed the effective interest rate and adjusted the rate prospectively as necessary.

The following table shows the activity within the liability account for the years ended December 31, 2022 and December 2021.

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Liability related to sale of future royalties - beginning balance

 

$

4,460

 

 

$

15,257

 

Deferred transaction costs amortized

 

 

33

 

 

 

234

 

Non-cash royalty revenue payable to HCRP

 

 

(4,739

)

 

 

(12,106

)

Non-cash interest expense recognized

 

 

246

 

 

 

1,075

 

Liability related to sale of future royalties - ending balance

 

$

—

 

 

$

4,460

 

 

The interest and debt discount amortization expense is reflected as interest and amortization of debt discount expense in the Statement of Operations.
v3.22.4
Corporate Restructuring
 12 Months Ended
Dec. 31, 2022
Restructuring And Related Activities [Abstract]  
Corporate Restructuring

(10) Corporate Restructuring

In January 2021 and September 2021, the Company announced corporate restructurings to reduce costs, more closely align operating expenses with expected revenue, and focus its resources on Inbrija. As part of the January 2021 restructuring, the Company reduced headcount by approximately 16% through a reduction in force (excluding the employees that transferred to Catalent at the closing of the sale of its Chelsea manufacturing operations). All of the reduction in personnel in connection with the January 2021 restructuring took place during the three-month period ended March 31, 2021. As part of the September 2021 restructuring, the Company reduced headcount by approximately 15% through a reduction in force. Most of this reduction in force took place in September 2021, and it was completed in the first quarter of 2022.

For the years ended December 31, 2022 and 2021, the Company incurred pre-tax severance and employee separation related expenses of approximately $0.3 million and $6.0 million, respectively, associated with the restructuring. Of the pre-tax severance and employee separation related expenses incurred, $0 and $0.6 million were recorded in research and development expenses and $0.3 million and $5.4 million were recorded in selling, general and administrative expenses for the years ended December 31, 2022 and 2021, respectively.

A summary of the restructuring costs for the years ended December 31, 2022 and 2021 is as follows:

(In thousands)

 

Restructuring Costs

 

Restructuring Liability as of December 31, 2020

 

$

—

 

2021 Restructuring costs

 

 

6,000

 

2021 Payments

 

 

(4,149

)

Restructuring Liability as of December 31, 2021

 

$

1,851

 

2022 Restructuring costs

 

 

251

 

2022 Payments

 

 

(2,102

)

Restructuring Liability as of December 31, 2022

 

$

—

 
v3.22.4
Accrued Expenses and Other Current Liabilities
 12 Months Ended
Dec. 31, 2022
Accrued Expenses And Other Current Liabilities [Abstract]  
Accrued Expenses and Other Current Liabilities

(11) Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

 

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Product allowances accruals

 

$

8,899

 

 

$

10,394

 

Bonus payable

 

 

4,329

 

 

 

4,439

 

Accrued interest

 

 

1,035

 

 

 

—

 

Sales force commissions and incentive payments payable

 

 

667

 

 

 

727

 

Administrative expenses

 

 

366

 

 

 

757

 

Vacation accrual

 

 

1,477

 

 

 

1,505

 

Research and development expense accruals

 

 

895

 

 

 

702

 

Commercial and marketing expense accruals

 

 

2,892

 

 

 

728

 

Royalties payable

 

 

—

 

 

 

264

 

Restructuring liability

 

 

—

 

 

 

1,851

 

Legal, accounting, and other professional services

 

 

50

 

 

 

1,325

 

Trade relations

 

 

278

 

 

 

706

 

Other accrued expenses

 

 

2,792

 

 

 

5,207

 

Total

 

$

23,680

 

 

$

28,605

 
v3.22.4
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2022
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

(12) 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, operating leases and commitments to purchase inventory. The following table summarizes the contractual obligations at December 31, 2022 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)

 

(In thousands)

 

Total

 

 

Less than
1 year

 

 

1-3 years

 

 

4-5 years

 

Convertible Senior Notes (2)

 

$

230,840

 

 

$

12,420

 

 

$

218,420

 

 

$

—

 

Operating leases (3)

 

 

6,983

 

 

 

1,545

 

 

 

3,221

 

 

 

2,217

 

Inventory purchase commitments (4)

 

 

49,853

 

 

 

17,753

 

 

 

21,700

 

 

 

10,400

 

Catalent Termination (5)

 

 

4,000

 

 

 

—

 

 

 

4,000

 

 

 

—

 

Settlement and Release Agreement (6)

 

 

3,385

 

 

 

3,385

 

 

 

—

 

 

 

—

 

Total

 

 

295,061

 

 

 

35,103

 

 

 

247,341

 

 

 

12,617

 

 

(1)
Excludes a liability for uncertain tax positions totaling $6.2 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 secured notes due 2024 issued in December 2019. The notes will mature and will be payable on December 31, 2024. Refer to Note 8.
(3)
Represents payments for the operating leases of the Company’s Pearl River NY headquarters, the Company’s lab and office space in Waltham, MA.
(4)
Includes minimum purchase commitment from Catalent for Inbrija under the manufacturing services (supply) agreement. The Company terminated its existing supply agreement with Catalent on December 31, 2022 and renegotiated a new supply agreement effective January 1, 2023. Under the terms of the new supply agreement with Catalent, the Company is required to make minimum purchase obligations through 2024. Furthermore, pursuant to the new supply agreement as amended, the Company agreed to pay Catalent $2 million in 2023 in connection with certain activities related to the operational readiness of the larger size 7 spray dryer ("PSD-7") at the Chelsea manufacturing facility, which is expected to be operational by 2026. In addition to the operational readiness payment, the Company agreed that it would reimburse a portion of Catalent’s costs in completing the installation and qualification of the PSD-7, which the Company believes will be beneficial to its future production needs, in the amount of up to $2 million. This amount will be paid quarterly over a one-year period commencing no sooner than September 30, 2023.
(5)
Represents the termination fee payable to Catalent that discontinued the Company's obligations under the 2021 MSA. The termination fee is payable in April 2024.
(6)
Represents the commitments specified in the Settlement and Release Agreement between the Company and Catalent to settle any and all outstanding purchase commitments associated with the 2021 MSA.

License Agreements

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 $18.7 million over the life of the contracts.

Under certain agreements, the Company is required to pay royalties for the use of technologies and products in its 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. See Note 14 to the Company’s Consolidated Financial Statements included in this report for a discussion on license, research, and collaboration agreements.

Employment Agreements

The Company has, or has agreed to enter into, 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). The Company’s contractual commitments table does not include these severance payment obligations.

Other

From time to time, the Company may be involved in litigation or other legal proceedings relating to claims arising out of operations in the normal course of its business, including the matters described below. The outcome of litigation and other legal proceedings is unpredictable, and regardless of outcome, they can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

In July 2020, the Company filed an arbitration demand with the American Arbitration Association against Alkermes plc (“Alkermes") after the parties were unable to resolve a dispute over license and supply royalties following the 2018 expiration of an Alkermes patent relating to Ampyra. In October 2022, an arbitration panel issued a final decision in this dispute and awarded to the Company $15 million plus prejudgment interest of $1.5 million. In addition, as a result of the panel’s ruling, the Company no longer has to pay Alkermes any royalties on net sales for license and supply of Ampyra, and is free to use alternative sources for supply of Ampyra, which the Company has already secured. On October 21, 2022, the Company made a submission to the arbitration panel to correct the award to include an additional $1.6 million that was

inadvertently omitted from the initial award calculation. In November 2022, the arbitration tribunal corrected the award amount and granted the Company another $1.6 million plus pre-judgment interest of $0.2 million.

On November 9, 2020, Drug Royalty III, L.P., and LSRC III S.ar.l. (collectively, “DRI”) filed an arbitration claim against us with the American Arbitration Association under a September 26, 2003 License Agreement that the Company originally entered into with Rush-Presbyterian St. Luke’s Medical Center (“Rush”). DRI previously purchased license royalty rights under the license agreement from Rush. DRI alleged a dispute over the last-to-expire patent covering sales of the drug Ampyra under the license agreement, and claimed damages based on unpaid license royalties of $6 million plus interest. On June 28, 2022, the Company settled DRI’s claim in exchange for a payment by us to DRI of $750,000 expressly without any admission of wrongdoing. Although the Company believed they had valid defenses to this claim, the Company also believed that the settlement was in the best interests of the Company and our stockholders to avoid the future expense and distraction associated with continuing the arbitration. The Company recorded a liability of $2 million for the year ended December 31, 2020 in accrued expense and other current liabilities related to the dispute. As a result of the settlement, during the quarter ended September 30, 2022, this accrual was reduced to the $750,000 and a corresponding gain of $1.3 million was recorded in the consolidated statement of operations as other income.

On August 20, 2020, ratiopharm Gmbh filed nullity actions against us in the German Federal Patent Court seeking to invalidate both of our German patents that derived from our European patents, EP 1732548 (the ‘548 patent) and EP 2377536 (the ‘536 patent), with claims directed to the use of a sustained dalfampridine composition to increase walking speed in a patient with multiple sclerosis. In November 2021, the German Federal Patent Court issued preliminary opinions indicating that the claimed subject matter of the ‘548 patent lacked inventive step and the claimed subject matter of the ‘536 patent lacked novelty and inventive step. At oral hearings in February 2022 and April 2022, the German Federal Patent Court dismissed ratiopharm’s action against the ‘536 patent and the ‘548 patent, respectively, as inadmissible because of ongoing formality proceedings relating to these patents in the European Patent Office. Ratiopharm has appealed the decision on the ‘536 patent but not the decision on the ‘548 patent, and could refile the nullity actions. On December 6, 2022, the German Federal Court of Justice held that ratiopharm’s ‘536 nullity action was admissible and remanded the case back to the German Federal Patent Court. On January 11, 2022, Stada Arzneimittel also filed a nullity action against the ‘536 patent, and on July 27, 2022, Teva GmbH also filed a nullity action against the ‘548 patent, both in the same court as the ratiopharm nullity actions. On January 27, 2023, the German Federal Patent Court issued a preliminary opinion in the ‘548 Teva nullity action that the claimed subject matter of the ‘548 patent lacked inventive step and scheduled a hearing for July 11, 2023. The Company is working with Biogen to vigorously defend these actions and enforce our patent rights.

On February 10, 2021, the Company sold its Chelsea manufacturing operations to Catalent Pharma Solutions. In connection with the sale, the Company entered into a long-term, global manufacturing services (supply) agreement (the “2021 MSA") with a Catalent affiliate pursuant to which they agreed to manufacture Inbrija for the Company at the Chelsea facility. The manufacturing services agreement provided that Catalent would manufacture Inbrija, to the Company’s specifications, and the Company would purchase Inbrija exclusively from Catalent during the term of the manufacturing services agreement; provided that such exclusivity requirement will not apply to Inbrija intended for sale in China. Under the Company’s agreement with Catalent, it was obligated to make minimum purchase commitments for Inbrija of $18 million annually through the expiration of the agreement on December 31, 2030.

In December 2021, the Company and Catalent amended the manufacturing services agreement to adjust the structure of the minimum payment terms for the period from July 1, 2021 through June 30, 2022 (the “Adjustment Period”). Under the amendment, the minimum payment obligation for the Adjustment Period was replaced with payments to Catalent for actual product delivered during the Adjustment Period subject to a cap for the Adjustment Period that corresponds to its original minimum purchase obligation for that period (i.e., $17 million), and with certain payments being made in the first half of 2022 instead of during the second half of 2021. As a result of the amendment, payments to Catalent for product delivered during the Adjustment Period were approximately $8.4 million less than the $17 million minimum inventory purchase obligation for that period.

On December 31, 2022, the Company and Catalent entered into a termination letter, which was subsequently amended and restated in March 2023 (the “Termination Letter”), to terminate the 2021 MSA. In connection with the termination of the 2021 MSA, the Company will pay a $4 million termination fee to Catalent, payable in April 2024. The parties also entered into a Settlement and Release Agreement with respect to certain batches of Inbrija that were not delivered in 2022 as scheduled, and that are now expected in the first quarter of 2023, and to resolve all other outstanding manufacturing issues.

Effective January 1, 2023, the Company entered into a new manufacturing services agreement, which was subsequently amended in March 2023 (as amended in March 2023, the “New MSA”) with Catalent. Under the New MSA,

Catalent will continue to manufacture Inbrija (levodopa inhalation powder) through 2030, with reduced minimum annual commitments through 2024 and significantly lower pricing thereafter. The New MSA provides for the scale-up of new spray drying equipment (“PSD-7”), which will provide expanded capacity for the long-term world-wide manufacturing requirements of Inbrija. The Company will be subject to purchase commitments in 2023 and 2024 of 15 and 24 batches of Inbrija, respectively, at a total cost of $10.5 million and $15.5 million, respectively. Thereafter, in 2025, the Company will pay Catalent a fixed per capsule fee based on the amount of Inbrija that is delivered for sale in the United States and other markets.

It is anticipated that by 2026, the PSD-7 equipment will be fully operational, which will significantly reduce the per capsule fees for all markets. The Company agreed to a minimum purchase requirement of at least three batches per year on the PSD-7 equipment. In addition, the Company will provide up to $1 million in each of 2023 and 2024 for capital expenditures to assist in the capacity expansion efforts. In addition, the Company will be obligated to pay Catalent $2 million in 2023 in connection with certain activities relating to the operational readiness of the PSD-7.

The New MSA, unless earlier terminated, will continue until December 31, 2030, and will be automatically extended for successive two-year periods unless either the Company or Catalent provides the other with at least 18-months’ prior written notice of non-renewal. Either party may terminate the New MSA by written notice under certain circumstances, including material breach (subject to specified cure periods) or insolvency. The Company may also terminate the New MSA upon certain specified regulatory events and for convenience upon 180 days’ prior written notice.

The Company agreed to purchase from Catalent all of our requirements for Inbrija for the United States, Germany, Spain and Latin America except in the case of termination or certain supply disruptions. For China, the Company is not required to purchase their supply from Catalent and may arrange for an alternate supplier. For other countries, the Company may be released from exclusivity as long as the Company purchases at least two batches from Catalent in the applicable year, subject to certain rights of first refusal on alternative source of supply arrangements.

During the year ended December 31, 2022, the Company incurred approximately $18.7 million of purchase commitments with Catalent, of which $11.5 million are recognized as inventory within our balance sheet, $3.3 million are recognized as other current assets within our balance sheet and $3.9 million are recognized as cost of sales within our consolidated statement of operations for the period. As of December 31, 2022, the Company does not have any remaining minimum remaining purchase commitment to Catalent under 2021 MSA. Under the New MSA with Catalent, the Company has a minimum remaining purchase of $10.5 million through December 31, 2023, $15.5 million through December 31, 2024, and $5.2 million annually from January 1, 2026 through December 31, 2030.

In January 2023, the Company filed a petition in the District Court for the Southern District of New York to confirm and modify the arbitral award. In that arbitration, the arbitration panel found in the Company’s favor that Alkermes leveraged its patent to illegally obtain royalties beyond the life of the patent in which was a violation of federal law. The panel held that Alkermes’ conduct in continuing to charge royalties after the patent expired was unlawful per se and that the underlying agreements were unenforceable. The panel awarded the Company approximately $18.3 million, including interest, representing license royalties overpaid since July 2020. The Company is asking the District Court to confirm the Award, with modifications to the extent the panel disregarded federal law by declining to award royalties the Company paid prior to July 2020 and after July 2018, the date on which the panel found that the parties’ agreements were unenforceable as a matter of law. The Company is seeking restitution of the remaining illegal royalties that the panel found were demanded and collected by Alkermes in violation of the law in the amount of approximately $65 million together with pre- and post-award interest and costs. On February 8, 2023, Alkermes filed a brief opposing the relief requested in the Company’s petition and requesting that the award be confirmed without modification. The Company filed a brief in response on February 22, 2023. The District Court will likely schedule oral argument on the petition and render its decision sometime thereafter.
v3.22.4
Fair Value Measurements
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements

(13) 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 following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 and December 31, 2021 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 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 December 31, 2022, except for the fair value of the Company’s convertible senior notes due December 2024, which was approximately $157.3 million as of December 31, 2022. 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

 

2022

 

 

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

 

 

Money market funds

 

$

15,322

 

 

$

—

 

 

$

—

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

—

 

 

 

—

 

 

 

41,200

 

Derivative liability - conversion option

 

 

—

 

 

 

—

 

 

 

—

 

2021

 

 

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

 

 

Money market funds

 

$

12,192

 

 

$

—

 

 

$

—

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

—

 

 

 

—

 

 

 

49,600

 

Derivative liability - conversion option

 

 

—

 

 

 

—

 

 

 

37

 

 

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)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Acquired contingent consideration:

 

 

 

 

 

 

Balance, beginning of period

 

$

49,600

 

 

$

48,200

 

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

 

 

(6,659

)

 

 

2,895

 

Royalty payments

 

 

(1,741

)

 

 

(1,495

)

Balance, end of period

 

$

41,200

 

 

$

49,600

 

 

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 forecast for Inbrija, and (ii) discount period and rate. The milestone payment outcomes ranged from $0 to $18.7 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, 2022, changes in the fair value of the acquired contingent consideration were primarily due to the change in projected revenue and the recalculation of cash flows for the passage of time, as well as a decrease in the discount rate. See Note 14 to the Company’s Consolidated Financial Statements included in this report for a discussion about the Alkermes ARCUS agreement.

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

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)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Derivative Liability-Conversion Option

 

 

 

 

 

 

Balance, beginning of period

 

$

37

 

 

$

1,193

 

Fair value adjustment

 

 

(37

)

 

 

(1,156

)

Balance, end of period

 

$

—

 

 

$

37

 

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 8 to the Consolidated Financial Statements included in this report for more information on the Convertible Senior Notes due 2024). 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 binomial model that calculates 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. There are several embedded features within the Notes which, upon issuance, did not meet the conditions for equity classification. As a result, these features were aggregated together and recorded as a derivative liability conversion option. The derivative liability conversion feature is measured at fair value on a quarterly basis and changes in the fair value will be recorded in the consolidated statement of operations. The Company received stockholder approval on August 28, 2020 to increase the number of authorized shares of the Company’s common stock from 13,333,333 shares to 61,666,666 shares. As a result of the share approval, the Company determined that multiple embedded conversion options met the conditions for equity classification. The Company performed a valuation of these conversion options as of September 17, 2020, which was the date the Company completed certain securities registration obligations. The resulting fair value of these conversion options was calculated to be $18.3 million, which was reclassified to equity and presented in the statement of stockholder’s equity as of September 30, 2020, net of the $4.4 million tax impact. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The Company performed a valuation of the derivative liability related to certain embedded conversion features that are precluded from equity classification. The fair value of these conversion features was calculated to be negligible as of December 31, 2022. Key inputs used in the calculation of the fair value include stock price, volatility, risky (bond) rate, and the last observed bond price during the year ended December 31, 2022.
v3.22.4
License, Research and Collaboration Agreements
 12 Months Ended
Dec. 31, 2022
Collaborative Arrangement Disclosure [Abstract]  
License, Research and Collaboration Agreements

(14) 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. 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 the Company.

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 the Company. 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 Agreements

Alkermes

Prior to October 2022, the Company was a party to a 2003 supply agreement with Alkermes relating to the manufacture and supply of Ampyra by Alkermes. The Company was obligated to purchase at least 75% of its annual requirements of Ampyra from Alkermes, unless Alkermes was unable or unwilling to meet its requirements, for a percentage of net product sales and the quantity of product shipped by Alkermes to the Company. In those circumstances, where the Company elected to purchase less than 100% of its requirements from Alkermes, the Company was obligated to make certain compensatory payments to Alkermes. Alkermes was required to assist the Company in qualifying a second manufacturer to manufacture and supply the Company with Ampyra subject to its obligations to Alkermes.

In July 2020, the Company filed an arbitration demand with the American Arbitration Association against Alkermes after the parties were unable to resolve a dispute over license and supply royalties following the 2018 expiration of an Alkermes patent relating to Ampyra. In October 2022, a three-judge arbitration panel issued a final decision in this dispute and awarded to the Company an aggregate of $18.3 million including prejudgment interest and subsequent correction of a calculation error in the initial award. In addition, the arbitration panel ruled the agreements with Alkermes as unenforceable, and as a result the Company will no longer have to pay Alkermes any royalties on net sales for license and supply of Ampyra, and the Company is now free to use alternative sources for supply of Ampyra, which the Company has already secured. The Company expects the cost savings associated with this decision to greatly benefit Ampyra's value to the Company.

In 2020 Biogen paid the Company $15 million based on achievement of a specified sales milestone (all subject to the Company’s payment obligations to Alkermes under the Company’s license agreement with them). The Company is entitled to receive additional payments from Biogen that exceed $300 million in the aggregate based on achievement of future regulatory and sales milestones, although the Company does not anticipate achievement of any of those milestones in the foreseeable future. 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.

 

Patheon

As a result of the arbitration ruling in October 2022, the Company was free to obtain supply of Ampyra from alternative sources and Patheon became the Company's sole manufacturer and packager of Ampyra for sales in the United States.

The manufacturing services agreement with Patheon is automatically renewed for successive one-year periods on December 31 of each year, unless either the Company or Patheon provide the other party with at least 12-months’ prior written notice of non-renewal. Either party may terminate manufacturing services agreement by written notice under certain circumstances, including material breach (subject to specified cure periods) or insolvency. The Company may also terminate the manufacturing services agreement upon certain regulatory actions or objections. Patheon may terminate the manufacturing services agreement if the Company assigns the agreement to a third party under certain circumstances.

The Company relies on a single third-party manufacturer to supply dalfampridine, the active pharmaceutical ingredient, or API, in Ampyra, and also on a single supplier for a critical excipient used in the manufacture of Ampyra. If these companies experience any disruption in their operations, the Company's supply of Ampyra could be delayed or interrupted until the problem is solved or the Company locates another source of supply or another packager, which may not be available. The Company may not be able to enter into alternative supply or packaging arrangements on terms that are commercially reasonable, if at all. Any new supplier or packager would also be required to qualify under applicable regulatory requirements. Because of these and other factors, the Company could experience substantial delays before they are able to obtain qualified replacement products or services from any new supplier or packager.

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. 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.

In October 2022, an arbitration panel issued a decision in our dispute with Alkermes and awarded to the Company approximately $18.3 million including prejudgment interest and subsequent correction of an error in calculating the initial award. In addition, as a result of the panel’s ruling, the Company no longer has to pay Alkermes any royalties on net sales for license and supply of Ampyra, and the Company is free to use alternative sources for supply of Ampyra, which the Company has already secured for U.S. supply. However, the arbitration panel also ruled that the existing license and supply agreements with Alkermes are unenforceable. Accordingly, absent a new supply agreement with Alkermes or another supplier, the Company will not be able to exclusively supply Fampyra to Biogen under the terms of our supply arrangement with them. While the Company has engaged in discussions with Biogen relating to the supply of Fampyra, there can be no assurance that such discussions will result in a continuation of supply by the Company, Alkermes or a third party manufacturer. If Biogen is unable to obtain supply of the licensed product could constitute a breach under the existing supply agreement with Biogen resulting in termination of the license and supply agreements with Biogen or otherwise result in the cessation of sales of Fampyra and loss of royalty revenue in the future.

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 13 – Fair Value Measurements for more information about the contingent consideration liability.
v3.22.4
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

(15) Income Taxes

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

 

(In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Domestic

 

$

(60,179

)

 

$

(112,530

)

Foreign

 

 

24,932

 

 

 

3,456

 

Total

 

$

(35,247

)

 

$

(109,074

)

 

The benefit (expense) from income taxes in 2022 and 2021 consists of current and deferred federal, state and foreign taxes as follows:

 

(In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Current:

 

 

 

 

 

 

Federal

 

$

(243

)

 

$

230

 

State

 

 

(115

)

 

 

(182

)

Foreign

 

 

(37

)

 

 

(113

)

 

 

 

(395

)

 

 

(65

)

Deferred:

 

 

 

 

 

 

Federal

 

 

(30,234

)

 

 

4,412

 

State

 

 

(40

)

 

 

711

 

Foreign

 

 

—

 

 

 

62

 

 

 

 

(30,274

)

 

 

5,185

 

Total benefit from income taxes

 

$

(30,669

)

 

$

5,120

 

 

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 (“ownership change”). In the event of such a deemed ownership change, Section 382 imposes an annual limitation on pre-ownership change tax attributes. On June 1, 2022, the Company experienced an ownership change. The Company completed a Section 382 analysis and determined that its tax attributes are limited and would require a valuation allowance. As a result, the Company recorded additional valuation allowance on its net operating loss and tax credits carryforwards of approximately $35.3 million (tax effected).

As of December 31, 2022, the Company’s U.S. consolidated federal NOL carryforwards on a tax return basis are approximately $117.6 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. Due to the Section 382 limitation a partial valuation allowance has been recorded on its pre-ownership change net operating losses of approximately $12.2 million (tax effected).

Biotie Therapies, Inc. (“Biotie US”), a wholly owned subsidiary of Biotie Finland, files a separate company federal income tax return and has a net operating loss carryforward of approximately $120.8 million as of December 31, 2022. These losses, which begin to expire in 2026, were historically not more likely than not to be realized and had been fully offset with a full valuation allowance and therefore the limitation under Section 382 that occurred during 2022 had no further financial statement impact. In the fourth quarter, in connection with the liquidation proceedings of Biotie Finland Ltd the Company reversed both the deferred tax asset and related valuation allowance which also had no impact to tax expense.

The Company’s capital loss carryforward of approximately $42.3 million is fully offset with a valuation allowance. The capital loss carryforward will expire in 2026. Under Section 382, the utilization of this capital loss would be limited. The Company’s capital loss from tax year 2017 of approximately $428.7 million expired as of December 31, 2022 and accordingly the deferred tax asset and corresponding valuation allowance have been reversed.

The Company had available state NOL carryforwards of approximately $312.9 million and $304.8 million as of December 31, 2022 and 2021, 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. Due to the Section 382 ownership change and limitation, a partial valuation allowance has been recorded on the unitary and certain separate state NOLs, of approximately $2.7 million.

The Company has $27.0 million of net operating loss carryforwards outside of the U.S. as of December 31, 2022, that begin to expire in 2023, all of which are fully reserved with a valuation allowance.

The Company’s U.S. federal research and development and orphan drug credit carryforwards of $35.1 million and $35.3 million as of December 31, 2022 and 2021, respectively, begin to expire in 2023. Due to the Section 382 limitation, a full valuation allowance has been recorded on the remaining balance. The Company does not expect to pay U.S. federal or state cash taxes as they are in a current year taxable loss.

The timing differences between the financial reporting 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, 2022. The Company maintains a partial valuation allowance on the Acorda filling group's deferred balances. The Company had a net decrease of $86.5 million of valuation allowance. While the Company recognized a tax expense from recording additional valuation allowance due to the Section 382 limitation, there was an overall decrease in the valuation allowance balance which related to significant deferred tax asset reversals that had been fully reserved as of the beginning of the year. Accordingly, the reversal of the deferred tax asset and related valuation allowance for capital loss carryforwards, Biotie U.S. and other foreign net operating losses had no impact to tax expense.

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, 2022

 

 

Year ended December 31, 2021

 

U.S. federal statutory tax rate

 

 

21.0

%

 

 

21.0

%

State and local income taxes

 

 

(0.3

)%

 

 

0.4

%

Stock option compensation

 

 

(0.2

)%

 

 

(0.1

)%

Stock option shortfall

 

 

(8.8

)%

 

 

(5.0

)%

GILTI Inclusion

 

 

(8.3

)%

 

 

—

 

Uncertain tax positions

 

 

0.4

%

 

 

0.5

%

Other nondeductible and permanent differences

 

 

(7.7

)%

 

 

(2.6

)%

U.S. write-off/expiration

 

 

(255.8

)%

 

 

—

 

Valuation allowance, net of foreign tax rate
    differential

 

 

151.6

%

 

 

(9.5

)%

Biotie Finland cancellation of debt exclusion

 

 

21.7

%

 

 

—

 

Federal return to provision differences

 

 

(0.6

)%

 

 

—

 

Effective income tax rate

 

 

(87.0

)%

 

 

4.7

%

The Company’s overall effective tax rate is affected by the increase in the valuation allowance, the forfeitures of equity based compensation for which no tax deduction is recorded and inclusion of GILTI as a permanent item.

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, 2022

 

 

December 31, 2021

 

Deferred tax assets:

 

 

 

 

 

 

Net operating loss carryforward

 

$

74,576

 

 

$

77,510

 

Capital loss carryforward

 

 

11,100

 

 

 

116,717

 

Tax credits

 

 

34,301

 

 

 

34,332

 

Stock based compensation

 

 

8,896

 

 

 

12,257

 

Contingent consideration

 

 

10,807

 

 

 

12,730

 

Employee compensation

 

 

1,438

 

 

 

1,513

 

Rebate and returns reserve

 

 

2,003

 

 

 

2,290

 

Capitalized R&D

 

 

1,191

 

 

 

10,696

 

Derivative liability

 

 

—

 

 

 

9

 

Other

 

 

5,421

 

 

 

7,656

 

Total deferred tax assets

 

$

149,733

 

 

$

275,710

 

Valuation allowance

 

 

(106,702

)

 

 

(193,253

)

Total deferred tax assets net of valuation allowance

 

$

43,031

 

 

$

82,457

 

Deferred tax liabilities:

 

 

 

 

 

 

Intangible assets

 

 

(77,876

)

 

 

(83,930

)

Convertible debt

 

 

(9,190

)

 

 

(12,842

)

Depreciation

 

 

(167

)

 

 

400

 

Other

 

 

-

 

 

 

(15

)

Total deferred tax liabilities

 

$

(87,233

)

 

$

(96,387

)

Net deferred tax liability

 

$

(44,202

)

 

$

(13,930

)

 

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, 2022

 

 

Year ended December 31, 2021

 

Beginning of period balance

 

$

6,370

 

 

$

7,093

 

Increases for tax positions taken during a prior period

 

 

—

 

 

 

—

 

Decreases for tax positions taken during a
    prior period

 

 

(133

)

 

 

(723

)

Increases for tax positions taken during the
    current period

 

 

—

 

 

 

—

 

 

 

$

6,237

 

 

$

6,370

 

 

Accrued interest and penalties 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 has ongoing state examinations in Massachusetts and New Jersey which cover multiple years. There have been no proposed adjustments at this stage of the examination. The Minnesota examination was finalized during the second quarter of 2022 for years 2018 and 2019 with no adjustments.

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, 2021

 

$

186,491

 

 

 

10,028

 

 

 

(3,266

)

 

$

193,253

 

Year ended December 31, 2022

 

$

193,253

 

 

 

233

 

 

 

(86,784

)

 

$

106,702

 
v3.22.4
Loss Per Share
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Loss Per Share

(16) Loss Per Share

The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2022 and 2021:

 

(In thousands, except per share data)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Basic and diluted

 

 

 

 

 

 

Net loss

 

$

(65,916

)

 

$

(103,954

)

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

 

 

19,707

 

 

 

10,621

 

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

 

 

—

 

 

 

—

 

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

 

 

19,707

 

 

 

10,621

 

Net loss per share—basic

 

$

(3.34

)

 

$

(9.79

)

Net loss per share—diluted

 

$

(3.34

)

 

$

(9.79

)

 

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 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 income per diluted share because their effects were anti-dilutive:

 

(In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Denominator

 

 

 

 

 

 

Stock options and restricted common shares

 

 

996

 

 

 

1,199

 

 

Performance share units are excluded from the calculation of net loss per diluted share as the performance criteria has not been met for the years ended December 31, 2022 and 2021. 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, 2022 and 2021.
v3.22.4
Employee Benefit Plan
 12 Months Ended
Dec. 31, 2022
Compensation And Retirement Disclosure [Abstract]  
Employee Benefit Plan

(17) 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 $0.8 million and $0.9 million for the years ended December 31, 2022 and 2021, respectively.
v3.22.4
Subsequent Events
 12 Months Ended
Dec. 31, 2022
Subsequent Events [Abstract]  
Subsequent Events

(18) Subsequent Events

 

Catalent Manufacturing Services Agreement

Effective January 1, 2023, the Company entered into a new manufacturing services agreement (as amended in March 2023, the “New MSA”) with Catalent and terminated, effective December 31, 2022, the prior Manufacturing Services Agreement, dated February 10, 2021 (the “2021 MSA”). Under the New MSA, Catalent will continue to manufacture Inbrija (levodopa inhalation powder) through 2030, with reduced minimum annual commitments through 2024 and significantly lower pricing thereafter. The New MSA provides for the scale-up of new spray drying equipment (“PSD-7”), which will provide expanded capacity for the long-term world-wide manufacturing requirements of Inbrija, which is expected to be operational in 2026. Under the New MSA Company will be subject to purchase commitments in 2023 and 2024 of 15 and 24 batches of Inbrija, respectively, at a total cost of $10.5 million and $15.5 million, respectively. Thereafter, in 2025, the Company will pay Catalent a fixed per capsule fee based on the amount of Inbrija that is delivered for sale in the United States and other markets. In addition, the Company will be obligated to pay Catalent $2 million in 2023 in connection with certain activities relating to the operational readiness of the PSD-7.

It is anticipated that by 2026, the PSD-7 equipment will be fully operational, which will significantly reduce the per capsule fees for all markets. The Company has agreed to a minimum purchase requirement of at least three batches per year on the PSD-7 equipment. In addition to the operational readiness payment described above, the Company will provide up to $1 million in each of 2023 and 2024 for capital expenditures to assist in the capacity expansion efforts.

The New MSA, unless earlier terminated, will continue until December 31, 2030, and will be automatically extended for successive two-year periods unless either the Company or Catalent provides the other with at least 18-months’ prior written notice of non-renewal. Either party may terminate the New MSA by written notice under certain circumstances, including material breach (subject to specified cure periods) or insolvency. The Company may also terminate the New MSA upon specified regulatory events and for convenience upon 180 days’ prior written notice.

The Company agreed to purchase from Catalent all of our requirements for Inbrija for the United States, Germany, Spain and Latin America, except in the case of termination or certain supply disruptions. For China, the Company is not required to purchase our supply from Catalent and may arrange for an alternate supplier. For other countries, the Company may be released from exclusivity as long as the Company purchases at least two batches from Catalent in the applicable year, subject to certain rights of first refusal on alternative source of supply arrangements.

 

Silicon Valley Bank

Silicon Valley Bank (“SVB”) was closed on Friday, March 10, 2023 by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (the “FDIC”) as receiver. As of March 13, 2023, the Company had approximately $8.3 million on deposit with SVB, which represented approximately 22% of our unrestricted cash and cash equivalents as of December 31, 2022. On March 12, 2023, federal regulators announced that the FDIC would complete its resolution of SVB in a manner that fully protects all depositors. As a result, we do not anticipate any losses with respect to our funds that had been deposited with SVB.

The Company continues to believe that its existing cash and cash equivalents balance and cash flow from operations will be sufficient to meet its working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond.

 

Alkermes Award Modification

In January 2023, the Company filed a petition in the District Court for the Southern District of New York to confirm and modify the arbitral award. In that arbitration, the arbitration panel found in the Company’s favor that Alkermes leveraged its patent to illegally obtain royalties beyond the life of the patent in which was a violation of federal law. The panel held that Alkermes’ conduct in continuing to charge royalties after the patent expired was unlawful per se and that the underlying agreements were unenforceable. The panel awarded the Company approximately $18.3 million, including interest, representing license royalties overpaid since July 2020. The Company is asking the District Court to confirm the Award, with modifications to the extent the panel disregarded federal law by declining to award royalties the Company paid prior to July 2020 and after July 2018, the date on which the panel found that the parties’ agreements were unenforceable as a matter of law. The Company is seeking restitution of the remaining illegal royalties that the panel found were demanded and collected by Alkermes in violation of the law in the amount of approximately $65 million together with pre- and post-award interest and costs. On February 8, 2023, Alkermes filed a brief opposing the relief requested in the Company’s petition and requesting that the award be confirmed without modification. The Company filed a brief in response on February 22, 2023. The District Court will likely schedule oral argument on the petition and render its decision sometime thereafter.
v3.22.4
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Principles of Consolidation

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.
Basis of Presentation

Basis of Presentation

On December 31, 2020, the Company filed an amendment to its Certificate of Incorporation which effected a 1-for-6 reverse stock split of the shares of its outstanding common stock and proportionate reduction in the number of authorized shares of its common stock from 370,000,000 to 61,666,666. The Company’s common stock began trading on a split-adjusted basis on The Nasdaq Global Select Market commencing upon market open on January 4, 2021. 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 the Company’s 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 the Company’s common stock.
Use of Estimates

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 convertible senior secured notes due 2024, which is marked to market each quarter based on a binomial model, 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

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

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. The Company maintains cash balances in excess of insured limits. As of March 13, 2023, the Company had approximately $8.3 million on deposit with SVB, which represented approximately 22% of the Company’s unrestricted cash and cash equivalents as of December 31, 2022. On March 12, 2023, federal regulators announced that the FDIC would complete its resolution of SVB in a manner that fully protects all depositors. As a result, the Company does not anticipate any losses with respect to such cash balances.
Restricted Cash

Restricted Cash

Restricted cash represents an escrow account with funds to maintain the interest payments for the 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 December 31, 2022, 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. See Note 8 to the Company’s Consolidated Financial Statements included in this report for a discussion of interest payments on the outstanding convertible senior secured notes due 2024.

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, 2022

 

 

December 31, 2021

 

 (In thousands)

 

Beginning of period

 

 

End of period

 

 

Beginning of period

 

 

End of period

 

Cash and cash equivalents

 

$

45,634

 

 

$

37,536

 

 

$

71,369

 

 

$

45,634

 

Restricted cash

 

 

13,400

 

 

 

6,884

 

 

 

12,917

 

 

 

13,400

 

Restricted cash-non current

 

 

6,189

 

 

 

255

 

 

 

18,609

 

 

 

6,189

 

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

 

$

65,223

 

 

$

44,675

 

 

$

102,895

 

 

$

65,223

 
Investments

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. There were no investments classified as short-term or long-term at December 31, 2022 or 2021.
Other Comprehensive Loss

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, 2022 and 2021. The cumulative foreign currency translation adjustment reported in Other

Comprehensive Income (Loss) was $1.6 million and $1.8 million for the period ended December 31, 2022 and 2021, respectively.
Inventory

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. 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.

The following table provides the major classes of inventory:

 

 (In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Raw materials

 

$

6,212

 

 

$

3,338

 

Finished goods

 

 

6,540

 

 

 

15,210

 

Total

 

$

12,752

 

 

$

18,548

 

 

Ampyra

Prior to October 2022, the cost of Ampyra inventory manufactured by Alkermes plc (Alkermes) was based on agreed upon pricing with Alkermes. In the event Alkermes does not manufacture the products, Alkermes was 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. No payments were made for the years ended December 31, 2022 and 2021.

In October 2022, an arbitration panel issued a decision in our dispute with Alkermes and ruled that the existing license and supply agreements with Alkermes are unenforceable. As a result of the panel’s ruling, the Company no longer has to pay Alkermes any royalties on net sales for license and supply of Ampyra, and the Company is free to use alternative sources for supply of Ampyra, which they have already secured for U.S. supply.

The Company had previously designated Patheon, Inc. as a 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. Patheon now supplies the Company with its Ampyra needs.

On September 30, 2010, the Company entered into a world-wide manufacturing services agreement with Patheon, Inc. as a second manufacturer for Ampyra (Dalfampridine-ER tablets, 10mg). Under the manufacturing services agreement, the Company agreed to purchase from Patheon, on a non-exclusive basis, a portion of our requirements for Ampyra in the United States. The Company pays Patheon a fixed per bottle fee (60 tablets per bottle) based on the annual quantity of Ampyra bottles that are delivered for sale. As a result of the arbitration ruling in October 2022, the Company was free to obtain supply of Ampyra from alternative sources and Patheon became the Company's sole manufacturer and packager of Ampyra for sales in the United States.

The manufacturing services agreement is automatically renewed for successive one-year periods on December 31 of each year, unless either the Company or Patheon provide the other party with at least 12-months’ prior written notice of non-renewal. Either party may terminate manufacturing services agreement by written notice under certain circumstances, including material breach (subject to specified cure periods) or insolvency. The Company may also terminate the manufacturing services agreement upon certain regulatory actions or objections. Patheon may terminate the manufacturing services agreement if the Company assigns the agreement to a third party under certain circumstances.

The manufacturing services agreement contains customary representations, warranties and covenants, including with respect to the ownership of any intellectual property created pursuant to the manufacturing services agreement, as well as

provisions relating to ordering, payment and shipping terms, regulatory matters, reporting obligations, indemnity, confidentiality and other matters.

The Company relies on a single third-party manufacturer to supply dalfampridine, the active pharmaceutical ingredient, or API, in Ampyra, and also on a single supplier for a critical excipient used in the manufacture of Ampyra. If these companies experience any disruption in their operations, the Company's supply of Ampyra could be delayed or interrupted until the problem is solved or the Company locates another source of supply or another packager, which may not be available. The Company may not be able to enter into alternative supply or packaging arrangements on terms that are commercially reasonable, if at all. Any new supplier or packager would also be required to qualify under applicable regulatory requirements. Because of these and other factors, the Company could experience substantial delays before they are able to obtain qualified replacement products or services from any new supplier or packager.
Property and Equipment

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.
Intangible Assets

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 the Company or its 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

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.

Due to the Company's Asset Purchase and License agreement between Civitas, the Company's wholly owned subsidiary, and Alkermes in December 2010, the Company has recognized contingent consideration. See Note 14 to the Company’s Consolidated Financial Statements included in this report for a discussion on the Alkermes ARCUS agreement. Refer to Note 13 – Fair Value Measurements for more information about the contingent consideration liability.
Impairment of Long-Lived Assets

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 year-ended December 31, 2022, 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, 2022. The Company performed a recoverability test as of December 31, 2022 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. During the year ended December 31, 2022, no other impairment indicators were noted by the Company. 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

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 (the “Biogen Collaboration Agreement”), up to an agreed upon threshold of royalties. This threshold was met during the second quarter of 2022 and its obligations to HCRP expired upon Biogen's payment of royalties for that quarter. As a result, the full benefit of the Fampyra royalty revenue reverted back to the Company and the Company will continue to receive the Fampyra royalty revenue from Biogen until the revenue stream ends. As of December 31, 2022 the liability related to the sale of future royalties is $0.

Prior to satisfying its obligation to HCRP, since the Company maintained rights under the Biogen Collaboration Agreement, the Royalty Agreement has been accounted for as a liability that was 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 estimated the total amount of future net royalty payments 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 was 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 was affected by the amount and timing of net royalty revenue recognized and changes in forecasted revenue. On a quarterly basis, the Company reassessed the effective interest rate and adjusted 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 Costs

Patent application and maintenance costs are expensed as incurred.
Research and Development

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. Because of its limited financial resources, the Company previously suspended work on proprietary research and development programs, and has performed feasibility studies for potential collaborations with other companies that express interest in formulating their novel molecules for pulmonary delivery using the Company’s proprietary ARCUS technology.
Employee Retention Credit under the CARES Act

Employee Retention Credit under the CARES Act

The Employee Retention Credit (ERC) was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136 to provide a quarterly per employee credit to eligible businesses based on a percentage of qualified wages and health insurance benefits paid to employees. For the years ended December 31, 2022 and December 31, 2021, the Company classified $0 and $4.2 million in credits received as a reduction to payroll tax expense in the Consolidated Statement of Operations, respectively.
Accounting for Income Taxes

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

Revenue Recognition

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. As of December 31, 2022, the Company had contract liabilities of $6.1 million, which is the upfront payment received as part of the Esteve Germany distribution agreement entered into in 2021. The Company did not have any contract assets as of December 31, 2022 or 2021.

Product Revenues, Net

Inbrija is distributed in the U.S. primarily through: a specialty pharmacy associated with the Company’s e-prescribing program, described below; AllianceRx Walgreens Prime, or Walgreens, a specialty pharmacy that delivers the medication to patients by mail; the cash pay program through Sterling and ASD Specialty Healthcare, Inc. (an Amerisource Bergen affiliate). During the three-month period ended December 31, 2020, the Company completed the transition from a network of several specialty pharmacies to Walgreens as the sole specialty pharmacy for U.S. sales of Inbrija. In 2022, the Company implemented an e-prescribing program for the distribution of Inbrija in the U.S. through a specialty pharmacy that supports electronic prescriptions. The Company believes the convenience of electronic prescribing may be preferred by some physicians and patients.

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

Net revenues 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, such as specialty pharmacy companies. 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

Revenues 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 the Company’s allowances and accruals requiring critical estimates, and the specific considerations it uses in estimating their amounts are as follows:

Government Chargebacks and Rebates: The Company contracts for Medicaid and other U.S. federal government programs to allow for its 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 on the Company’s contracts and the most recent experience with respect to sales through each of these channels, the Company provides an allowance for chargebacks and rebates. The Company monitors 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: The Company contracts 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 the Company’s product is placed on a specific tier on the organization’s drug formulary. Based on the Company’s contracts and the most recent experience with respect to sales through managed care channels, the Company provides an allowance for managed care contract rebates. The Company monitors 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: The Company offers copay mitigation to commercially insured patients who have coverage for their products (in accordance with applicable law) and are responsible for a cost share. Based on the Company’s contracts and the most recent experience with respect to actual copay assistance provided, the Company's provides an allowance for copay mitigation rebates. The Company monitors the sales trends and adjust the rebate percentages on a regular basis to reflect the most recent rebate experience.

Cash Discounts: The Company sells directly to companies in their distribution network, which primarily includes specialty pharmacies, which deliver the medication to patients by mail, and ASD Specialty Healthcare, Inc. (an AmerisourceBergen affiliate). The Company generally provides invoice discounts for prompt payment for its products. The Company estimates its cash discounts based on the terms offered to its 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. The Company adjusts estimates based on actual activity as necessary.

Product Returns: The Company offers 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: The Company has contracted with certain specialty pharmacies to obtain transactional data related to its products in order to develop a better understanding of its selling channel as well as patient activity and utilization by the Medicaid program and other government agencies and managed care organizations. The Company pays a variable fee to the specialty pharmacies to provide the Company the data. The Company also pays the specialty pharmacies a fee in exchange for providing distribution and inventory management services, including the provision of inventory management data to the Company. The Company estimates its fee for service accruals and allowances based on sales to each specialty pharmacy and the applicable contracted rate.

Royalty Revenues

Royalty revenues recorded by the Company relate to the Company’s License and Collaboration agreement with Biogen for sales of Fampyra, and an agreement with Neurelis Inc. for sales of Valtoco. Royalty revenue from Neurelis are capped at $5.1 million, of which $3.8 million has been recorded through December 31, 2022.

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 Revenues

License revenues relates to the 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 revenues under ASC 606, which provides constraints for entities to recognize license revenues 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 revenues 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 revenues upon the achievement of the specific sale milestones.

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from upfront license fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other rights and obligations, the Company determines whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, the Company uses its judgment in determining the appropriate method of measuring progress for purposes of recognizing revenue from the up-front license fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Esteve Germany and Spain Distribution and Supply Agreement

In November 2021, the Company entered into distribution and supply agreements with Esteve Pharmaceuticals to commercialize Inbrija in Germany. Under the terms of the distribution agreement, the Company received a $5.9 million upfront payment, and is entitled to receive additional sales-based milestones. Under the terms of the supply agreement, the Company is entitled to receive a significant double-digit percent of the selling price of Inbrija in exchange for supply of the product. Esteve launched in Germany in June 2022, and expects to launch in Spain in February 2023.

The Company assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, Esteve, is a customer. The Company identified the following promises in the arrangement: the trademark license and marketing and distribution rights and the supply of minimum purchase commitments. The Company further determined that the promise for additional supply exceeding minimum purchase commitments represented a customer option, which would create an obligation for the Company if exercised by Esteve. No additional or material upfront consideration is owed to the Company by Esteve upon exercise of the customer option for the right to additional supply and it is offered at the same percent of selling price as the supply of minimum purchase commitments. Accordingly, it was assessed as a material right and, therefore, a separate performance obligation in the arrangement. The Company then determined that the trademark license and marketing and distribution rights and the supply of minimum purchase commitments were not distinct from one another and must be combined as a performance obligation. Based on this determination, as well as the considerations noted above with respect to the material right for additional supply, the Company identified two distinct performance obligations at the inception of the contract: (i) the combined performance obligation, (ii) the material right for additional supply.

As of December 31, 2022, the Company had contract liabilities of $6.1 million, as compared to $5.9 million as of December 31, 2021, which is the upfront payment received as part of the Esteve Germany distribution agreement entered into in 2021, and pre-payment of product ordered as part of the Esteve Spain supply agreement entered into in 2021. The Company did not have any contract assets as of December 31, 2022 or 2021. The Company launched Inbrija in Germany in June 2022 and Spain in March 2023. The Company recognized $2.9 million of revenues during the period ended December 31, 2022 from the supply agreement with Esteve Pharmaceuticals. As of December 31, 2022, approximately $0.7 million of revenue is expected to be recognized from remaining performance obligations for the Esteve agreement. The Company expects to recognize revenue of these remaining performance obligations over the next 12 years in Germany and 13 years in Spain, with the balance recognized thereafter. The Company will re-evaluate the transaction price in each reporting period and as certain events are resolved or other changes in circumstances occur.

Additionally, the Company is eligible to receive additional payments based on the achievement by Esteve of sales-based milestones. Variable consideration related these sales-based milestones was fully constrained due to the fact that it was probable that a significant reversal of cumulative revenue would occur, given the inherent uncertainty of success with these future milestones.

The following table disaggregates the Company’s revenues by major source (in thousands):

 

 (In thousands)

Fiscal Year Ended December 31, 2022

 

 

Fiscal Year Ended December 31, 2021

 

Revenues:

 

 

 

 

 

Net product revenues:

 

 

 

 

 

Ampyra

$

72,945

 

 

$

84,555

 

Inbrija U.S.

 

27,989

 

 

 

29,634

 

Inbrija ex-U.S.

 

2,911

 

 

 

—

 

Total net product revenues

 

103,845

 

 

 

114,189

 

Royalty Revenues

 

14,221

 

 

 

14,882

 

License Revenue

 

500

 

 

 

—

 

Total net revenues

$

118,566

 

 

$

129,071

 
Concentration of Risk

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 and Inbrija. 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. Prior to the sale of the facility in February 2021, the Company leased a manufacturing facility in Chelsea, Massachusetts which produced Inbrija for clinical trials and commercial supply.

Prior to October 2022, the Company relied primarily on Alkermes for its supply of Ampyra. Under its supply agreement with Alkermes, the Company was obligated to purchase at least 75% of its yearly supply of Ampyra from Alkermes, and was also required to make compensatory payments if it did not purchase 100% of its requirements from Alkermes, subject to certain specified exceptions. The Company and Alkermes agreed that the Company may purchase up to 25% of its annual requirements from Patheon, a mutually agreed-upon second manufacturing source, with compensatory payments. The Company and Alkermes also relied on a single third-party manufacturer, Regis, to supply dalfampridine, the active pharmaceutical ingredient, or API, in Ampyra.

In October 2022, an arbitration panel issued a decision in the Company's dispute with Alkermes and awarded to the Company approximately $18.3 million including prejudgment interest and declared the Company's agreements with Alkermes unenforceable. Of the total award amount of $18.3 million, the Company recorded $16.6 million as a reduction to operating expenses and $1.7 million as interest income. As a result of the panel’s ruling, the Company no longer has to pay Alkermes any royalties on net sales for license and supply of Ampyra. The Company had previously designated Patheon, Inc. as a 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. Patheon now supplies the Company with its Ampyra needs.

The Company relies on a single third-party manufacturer to supply dalfampridine, the active pharmaceutical ingredient, or API, in Ampyra, and also on a single supplier for a critical excipient used in the manufacture of Ampyra. If these companies experience any disruption in their operations, the Company's supply of Ampyra could be delayed or interrupted until the problem is solved or the Company locates another source of supply or another packager, which may not be available. The Company may not be able to enter into alternative supply or packaging arrangements on terms that are

commercially reasonable, if at all. Any new supplier or packager would also be required to qualify under applicable regulatory requirements. Because of these and other factors, the Company could experience substantial delays before they are able to obtain qualified replacement products or services from any new supplier or packager.

The Company’s principal direct customers for the year ended December 31, 2022 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. Five customers individually accounted for more than 10% of the Company’s revenues and approximately 91% of total revenues in 2022, and approximately 91% of total revenues in 2021. Four customers individually accounted for more than 10% of the Company’s accounts receivable and approximately 85% of total accounts receivable as of December 31, 2022, and approximately 92% of total accounts receivable as of December 31, 2021.
Allowance for Cash Discounts

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 $1.8 million and $2.0 million for the years ended December 31, 2022 and 2021, respectively. The Company’s reserve for cash discount allowances was $0.4 million and $0.8 million as of December 31, 2022 and 2021, respectively.

 

(in thousands)

 

Cash
Discounts

 

Balance at December 31, 2020

 

$

575

 

Allowances for sales

 

 

1,992

 

Actual credits

 

 

(1,787

)

Balance at December 31, 2021

 

$

780

 

Allowances for sales

 

$

1,830

 

Actual credits

 

$

(2,203

)

Balance at December 31, 2022

 

$

407

 
Allowance for Doubtful Accounts

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 recognized an allowance for doubtful accounts of $0.1 million and $0.2 million as of December 31, 2022 and December 31, 2021, respectively. The Company recognized a net credit of $0.1 million and provisions and write-offs of $0.2 million for the years ended December 31, 2022 and December 31, 2021, respectively.
Allowance for Chargebacks

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 $3.4 million and $1.0 million for the years ended December 31, 2022 and December 31, 2021, respectively. The Company made a payment of $3.2 million and $1.5 million related to the chargebacks allowances for the years ended December 31, 2022 and December 31, 2021, respectively. The Company’s reserve for chargebacks allowance were $0.3 million as of December 31, 2022 and negligible as of December 31, 2021.
Contingencies

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

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 secured notes due 2024 were measured at fair value based on market quoted prices of the debt securities; and
(e)
Derivate liability related to conversion options of the convertible senior secured notes due 2024 is measured at fair value using a binomial model.
Earnings per Share

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 options 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. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method or if-converted method, as applicable, at each reporting period. See Note 16 to the Company’s Consolidated Financial Statements included in this report for a discussion on earnings (loss) per share.
Share-based Compensation

Share‑based Compensation

The Company has various share‑based employee and non-employee compensation plans. See Note 7 to the Company’s Consolidated Financial Statements included in this report for a discussion of share-based compensation.

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

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 operations and reported in other income (expense) in consolidated statements of operations.
Segment and Geographic Information

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 for the years ended December 31, 2022 and December 31, 2021, respectively.
Accumulated Other Comprehensive Income

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.
Liquidity

Liquidity

The Company’s ability to meet its future operating requirements, repay its liabilities, meet its other obligations, and continue as a going concern are dependent upon a number of factors, including its ability to generate cash from product sales, reduce expenditures, and obtain additional financing. If the Company is unable to generate sufficient cash flow from the sale of its products, the Company 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 the Company 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.

As of December 31, 2022, the Company had cash, cash equivalents, and restricted cash of approximately $44.7 million. Restricted cash includes $6.2 million in escrow related to the 6% semi-annual interest portion of our convertible senior secured notes due June 2024, which interest is payable in cash or stock. If the Company elects to pay interest due in stock, and have the available shares to do so, a corresponding amount of restricted cash will be released from escrow. In connection with the June 1, 2022 interest payment on the 2024 notes, the Company issued an aggregate of 10,992,206 shares of common stock to holders of the notes and, to certain holders who delivered beneficial ownership limitation notices under the indenture governing the 2024 notes, cash interest payments of $0.9 million. In connection with the interest payment, $6.2 million was released from escrow and became available to us for other purposes. In connection with the December 1, 2022 interest payment of the 2024 notes the Company paid $6.2 million from restricted escrow cash. The Company incurred net losses of $65.9 million and $104.0 million for the years ended December 31, 2022 and 2021, respectively. In addition, in October 2022, the Company received $16.5 million and in December received an additional $1.8 million from Alkermes following a final decision of an arbitration panel regarding a dispute over licensing royalties relating to Ampyra.

The Company assesses and determines its ability to continue as a going concern in accordance with the provisions of ASC Topic 205-40, “Presentation of Financial Statements—Going Concern” (“ASC Topic 205-40”), which requires the Company to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date that its annual and interim consolidated financial statements are issued. Certain additional financial statement disclosures are required if such conditions or events are identified. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting. Determining the extent, if any, to which conditions or events raise substantial doubt about the Company’s ability to continue as a going concern, or the extent to which mitigating plans sufficiently alleviate any such substantial doubt, as well as whether or not liquidation is imminent, requires significant judgement by management. The Company has evaluated whether

there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the consolidated financial statements contained in this report are issued.

On June 22, 2022, the Company received a deficiency letter from Nasdaq Stock Market, LLC (“Nasdaq”) notifying the Company that, for 30 consecutive business days, the bid price for the Company’s common stock had closed below $1.00 per share, which is the minimum closing price required to maintain continued listing on the Nasdaq Global Select Market under Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Requirement”). The Company had 180 calendar days to regain compliance with the Minimum Bid Requirement.

On November 11, 2022, the Company held a special meeting of stockholders in order authorize the Board of Directors to approve the amendment and restatement of our Certificate of Incorporation to effect a reverse stock split at a ratio of any whole number in the range of 1-for-2 to 1-for-20 within one year following the conclusion of the special meeting, which proposal was approved by stockholders.

After a hearing with the Nasdaq Hearings Panel in February 2023, the Company was granted an extension until June 20, 2023 to regain compliance with the Minimum Bid Requirement. In the event the Company does not achieve compliance with the Minimum Bid Requirement by June 20, 2023, the Company has committed to effecting the reverse stock split authorized by our stockholders in November 2022. However, there can be no assurance that the Company will achieve compliance with the Minimum Bid Requirement even with effecting the reverse stock split.

On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (the “FDIC”) as receiver. As of March 13, 2023, the Company had approximately $8.3 million on deposit with SVB, which represented approximately 22% of the Company’s unrestricted cash and cash equivalents as of December 31, 2022. On March 12, 2023, federal regulators announced that the FDIC would complete its resolution of SVB in a manner that fully protects all depositors. As a result, the Company does not anticipate any losses with respect to its funds that had been deposited with SVB.

The Company believes that its existing cash and cash equivalents will be sufficient to cover its cash flow requirements for at least the next twelve months from the issuance date of these financial statements. However, the Company’s future requirements may change and will depend on numerous factors, some of which may be beyond the Company’s control.

Recent Accounting Pronouncements - Adopted

Recent 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 intra-period 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.

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. The Company adopted this guidance effective January 1, 2022. The adoption of this guidance did not have a significant impact on the consolidated financial statements.
Recent Accounting Pronouncements - Not Yet Adopted

Recent 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 March, 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses: Troubled Debt Restructurings and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for Troubled Debt Restructurings by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. This update also includes amendments which require that an entity disclose current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The ASU is effective for entities that have adopted the amendments in Update 2016-13 for fiscal years beginning after December 15, 2022, 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.
Subsequent Events

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 was a subsequent event that required disclosure or adjustment in these financial statements. See Note 18 to the Company's Consolidated Financial Statements included in this report for a discussion of subsequent events.
v3.22.4
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Reconciliation of Cash, Cash Equivalents and 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:

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 (In thousands)

 

Beginning of period

 

 

End of period

 

 

Beginning of period

 

 

End of period

 

Cash and cash equivalents

 

$

45,634

 

 

$

37,536

 

 

$

71,369

 

 

$

45,634

 

Restricted cash

 

 

13,400

 

 

 

6,884

 

 

 

12,917

 

 

 

13,400

 

Restricted cash-non current

 

 

6,189

 

 

 

255

 

 

 

18,609

 

 

 

6,189

 

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

 

$

65,223

 

 

$

44,675

 

 

$

102,895

 

 

$

65,223

 
Schedule of Major Classes of Inventory

The following table provides the major classes of inventory:

 

 (In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Raw materials

 

$

6,212

 

 

$

3,338

 

Finished goods

 

 

6,540

 

 

 

15,210

 

Total

 

$

12,752

 

 

$

18,548

 
Disaggregation of Revenue

The following table disaggregates the Company’s revenues by major source (in thousands):

 

 (In thousands)

Fiscal Year Ended December 31, 2022

 

 

Fiscal Year Ended December 31, 2021

 

Revenues:

 

 

 

 

 

Net product revenues:

 

 

 

 

 

Ampyra

$

72,945

 

 

$

84,555

 

Inbrija U.S.

 

27,989

 

 

 

29,634

 

Inbrija ex-U.S.

 

2,911

 

 

 

—

 

Total net product revenues

 

103,845

 

 

 

114,189

 

Royalty Revenues

 

14,221

 

 

 

14,882

 

License Revenue

 

500

 

 

 

—

 

Total net revenues

$

118,566

 

 

$

129,071

 
Summary of Allowance for Cash Discounts

(in thousands)

 

Cash
Discounts

 

Balance at December 31, 2020

 

$

575

 

Allowances for sales

 

 

1,992

 

Actual credits

 

 

(1,787

)

Balance at December 31, 2021

 

$

780

 

Allowances for sales

 

$

1,830

 

Actual credits

 

$

(2,203

)

Balance at December 31, 2022

 

$

407

 
v3.22.4
Leases (Tables)
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Schedule of ROU Assets and Lease Liabilities Related to Operating Leases

ROU assets and lease liabilities related to the Company’s operating leases are as follows:

 (In thousands)

 

Balance Sheet Classification

 

December 31, 2022

 

 

December 31, 2021

 

Right-of-use assets

 

Right of use assets

 

$

5,287

 

 

$

6,751

 

Current lease liabilities

 

Current portion of lease liabilities

 

 

1,545

 

 

 

8,186

 

Non-current lease liabilities

 

Non-current portion of lease liabilities

 

 

4,341

 

 

 

4,086

 

 
Components of Lease Costs The components of lease costs were as follows:

 

 

 

Year ended December 31,

 

 

Year ended December 31,

 

 (In thousands)

 

2022

 

 

2021

 

Operating lease cost

 

$

3,843

 

 

$

6,030

 

Variable lease cost

 

 

2,005

 

 

 

4,156

 

Short-term lease cost

 

 

8

 

 

 

851

 

Total lease cost

 

$

5,855

 

 

$

11,037

 
Schedule of Future Minimum Commitments under all Non-Cancelable Operating Leases

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

 

 (In thousands)

 

 

 

2023

 

 

1,545

 

2024

 

 

1,588

 

2025

 

 

1,633

 

2026

 

 

1,678

 

2027

 

 

357

 

Later years

 

 

182

 

Total lease payments

 

 

6,983

 

Less: Imputed interest

 

 

(1,097

)

Present value of lease liabilities

 

 

5,886

 
Summary of Supplemental Cash Flow Information Related to Operating Leases

Supplemental cash flow information activity related to the Company’s operating leases are as follows:

 

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Operating cash flow information:

 

 

 

 

 

 

Cash paid for amounts included in the measurement of lease liabilities

 

$

8,191

 

 

$

6,158

 
v3.22.4
Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2022
Goodwill And Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets

Intangible assets consisted of the following:

 

 

 

 

 

December 31, 2022

 

 

December 31, 2021

 

(Dollars In thousands)

 

Estimated
Remaining
Useful Lives
(Years)

 

 

Cost

 

 

Disposals

 

 

Accumulated
Amortization

 

 

Net
Carrying
Amount

 

 

Cost

 

 

Additions

 

 

Accumulated
Amortization

 

 

Net
Carrying
Amount

 

Inbrija (1)

 

 

11

 

 

 

423,000

 

 

 

—

 

 

 

(117,927

)

 

 

305,073

 

 

 

423,000

 

 

 

—

 

 

 

(87,164

)

 

 

335,836

 

Website
   development costs

 

1-3

 

 

 

14,585

 

 

 

(3,683

)

 

 

(10,888

)

 

 

14

 

 

 

14,559

 

 

 

26

 

 

 

(14,441

)

 

 

144

 

 

 

 

 

 

$

437,585

 

 

$

(3,683

)

 

$

(128,815

)

 

$

305,087

 

 

$

437,559

 

 

$

26

 

 

$

(101,605

)

 

$

335,980

 

 

 

(1)
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 amortizing the assets upon launch in February 2019.
Schedule of Estimated Future Amortization Expense for Intangible Assets

Estimated future amortization expense for intangible assets subsequent to December 31, 2021 is as follows:

(In thousands)

 

 

 

2023

 

$

30,772

 

2024

 

 

30,768

 

2025

 

 

30,764

 

2026

 

 

30,764

 

2027

 

 

30,764

 

Thereafter

 

 

151,255

 

 

 

$

305,087

 
v3.22.4
Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2022
Property Plant And Equipment [Abstract]  
Schedule of property and equipment

Property and equipment consisted of the following:

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

 

Estimated
useful lives used

Machinery and equipment

 

$

2,315

 

 

$

2,315

 

 

2-7 years

Leasehold improvements

 

 

1,761

 

 

 

15,317

 

 

Lesser of useful life or remaining lease term

Computer equipment

 

 

4,467

 

 

 

17,973

 

 

1-3 years

Laboratory equipment

 

 

582

 

 

 

1,644

 

 

2-5 years

Furniture and fixtures

 

 

233

 

 

 

2,130

 

 

4-7 years

 

 

 

9,358

 

 

 

39,379

 

 

 

Less accumulated depreciation

 

 

(6,755

)

 

 

(34,997

)

 

 

 

 

$

2,603

 

 

$

4,382

 

 

 
v3.22.4
Common Stock Options and Restricted Stock (Tables)
 12 Months Ended
Dec. 31, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Schedule of Weighted Average Assumptions Using the Black-Scholes Option Pricing Model

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,

 

 

 

2022

 

 

2021

 

Employees and directors:

 

 

 

 

 

 

Estimated volatility%

 

 

84.19

%

 

 

84.26

%

Expected life in years

 

 

6.70

 

 

 

6.25

 

Risk free interest rate%

 

 

2.69

%

 

 

1.36

%

Dividend yield

 

 

—

 

 

 

—

 
Schedule of Share-based Compensation Expense The following table summarizes share-based compensation expense included within the Company’s consolidated statements of operations:

 

 

 

Year ended December 31,

 

(In thousands)

 

2022

 

 

2021

 

Research and development

 

$

75

 

 

$

694

 

Selling, general and administrative

 

 

1,421

 

 

 

2,282

 

Cost of sales

 

 

—

 

 

 

19

 

Total

 

$

1,496

 

 

$

2,995

 
Schedule of Stock Option Activity

A summary of share‑based compensation activity for the year ended December 31, 2022 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, 2021

 

 

1,186

 

 

$

94.38

 

 

 

—

 

 

 

—

 

Granted

 

 

98

 

 

 

1.18

 

 

 

—

 

 

 

—

 

Forfeited and expired

 

 

(258

)

 

 

124.14

 

 

 

—

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance at December 31, 2022

 

 

1,026

 

 

$

78.00

 

 

 

5.8

 

 

 

19

 

Vested and expected to vest at December 31, 2022

 

 

1,013

 

 

$

78.97

 

 

 

5.7

 

 

 

18

 

Vested and exercisable at December 31, 2022

 

 

753

 

 

$

104.98

 

 

 

4.6

 

 

 

8

 
Schedule of Stock Options Activity, By Exercise Price Range

 

 

Options Outstanding

 

 

Options Exercisable

 

Range of exercise price

 

Outstanding
as of
December 31,
2022
(In thousands)

 

 

Weighted-
average
remaining
contractual life
(In years)

 

 

Weighted-
average
exercise price

 

 

Exercisable
as of
December 31,
2022
(Shares in thousands)

 

 

Weighted-
average
exercise price

 

$0.31 - $3.74

 

 

374

 

 

 

9.0

 

 

$

3.04

 

 

 

105

 

 

$

2.87

 

$3.75 - $14.46

 

 

223

 

 

 

6.7

 

 

 

11.85

 

 

 

221

 

 

 

11.92

 

$15.30 - $182.76

 

 

219

 

 

 

3.3

 

 

 

138.77

 

 

 

217

 

 

 

139.38

 

$182.94 - $240.18

 

 

205

 

 

 

1.8

 

 

 

217.99

 

 

 

205

 

 

 

217.99

 

$246.42 - $246.42

 

 

5

 

 

 

1.3

 

 

 

246.42

 

 

 

5

 

 

 

246.42

 

 

 

 

1,026

 

 

 

5.8

 

 

$

78.00

 

 

 

753

 

 

$

104.98

 
Schedule of Restricted Stock Activity

Restricted Stock

 

Number of Shares
(In thousands)

 

Nonvested at December 31, 2021

 

 

116

 

Granted

 

 

—

 

Vested

 

 

(108

)

Forfeited

 

 

(8

)

Nonvested at December 31, 2022

 

$

—

 
v3.22.4
Debt (Tables)
 12 Months Ended
Dec. 31, 2022
Convertible Senior Secured Notes due 2024  
Summary of Outstanding Note Balances

The outstanding 2024 Note balances as of December 31, 2022 and December 31, 2021 consisted of the following:

 

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Liability component:

 

 

 

 

 

 

Principal

 

$

207,000

 

 

$

207,000

 

Less: debt discount and debt issuance costs, net

 

 

(39,969

)

 

 

(55,975

)

Net carrying amount

 

 

167,031

 

 

 

151,025

 

Equity component

 

 

18,257

 

 

$

18,257

 

Derivative liability-conversion Option

 

$

—

 

 

$

37

 
Schedule of Interest Expense Recognized Related to the Notes

The following table sets forth total interest expense recognized related to the 2024 Notes for the years ended December 31, 2022 and 2021:

 (In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Contractual interest expense

 

$

12,420

 

 

$

12,420

 

Amortization of debt issuance costs

 

 

1,137

 

 

 

952

 

Amortization of debt discount

 

 

14,870

 

 

 

12,454

 

Total interest expense

 

$

28,427

 

 

$

25,826

 
Convertible Senior Notes due 2021  
Schedule of Interest Expense Recognized Related to the Notes

The following table sets forth total interest expense recognized related to the 2021 Notes for the years ended December 31, 2022 and 2021:

 

(In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Contractual interest expense

 

$

—

 

 

$

428

 

Amortization of debt issuance costs

 

 

—

 

 

 

95

 

Amortization of debt discount

 

 

—

 

 

 

934

 

Total interest expense

 

$

—

 

 

$

1,457

 
v3.22.4
Liability Related to Sale of Future Royalties (Tables)
 12 Months Ended
Dec. 31, 2022
Deferred Revenue Disclosure [Abstract]  
Schedule of Activity Within Liability Related to Sale of Future Royalties

The following table shows the activity within the liability account for the years ended December 31, 2022 and December 2021.

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Liability related to sale of future royalties - beginning balance

 

$

4,460

 

 

$

15,257

 

Deferred transaction costs amortized

 

 

33

 

 

 

234

 

Non-cash royalty revenue payable to HCRP

 

 

(4,739

)

 

 

(12,106

)

Non-cash interest expense recognized

 

 

246

 

 

 

1,075

 

Liability related to sale of future royalties - ending balance

 

$

—

 

 

$

4,460

 
v3.22.4
Corporate Restructuring (Tables)
 12 Months Ended
Dec. 31, 2022
Restructuring And Related Activities [Abstract]  
Summary of Restructuring Costs

A summary of the restructuring costs for the years ended December 31, 2022 and 2021 is as follows:

(In thousands)

 

Restructuring Costs

 

Restructuring Liability as of December 31, 2020

 

$

—

 

2021 Restructuring costs

 

 

6,000

 

2021 Payments

 

 

(4,149

)

Restructuring Liability as of December 31, 2021

 

$

1,851

 

2022 Restructuring costs

 

 

251

 

2022 Payments

 

 

(2,102

)

Restructuring Liability as of December 31, 2022

 

$

—

 
v3.22.4
Accrued Expenses and Other Current Liabilities (Tables)
 12 Months Ended
Dec. 31, 2022
Accrued Expenses And Other Current Liabilities [Abstract]  
Schedule of Accrued Expenses and Other Current liabilities

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Product allowances accruals

 

$

8,899

 

 

$

10,394

 

Bonus payable

 

 

4,329

 

 

 

4,439

 

Accrued interest

 

 

1,035

 

 

 

—

 

Sales force commissions and incentive payments payable

 

 

667

 

 

 

727

 

Administrative expenses

 

 

366

 

 

 

757

 

Vacation accrual

 

 

1,477

 

 

 

1,505

 

Research and development expense accruals

 

 

895

 

 

 

702

 

Commercial and marketing expense accruals

 

 

2,892

 

 

 

728

 

Royalties payable

 

 

—

 

 

 

264

 

Restructuring liability

 

 

—

 

 

 

1,851

 

Legal, accounting, and other professional services

 

 

50

 

 

 

1,325

 

Trade relations

 

 

278

 

 

 

706

 

Other accrued expenses

 

 

2,792

 

 

 

5,207

 

Total

 

$

23,680

 

 

$

28,605

 
v3.22.4
Commitments and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2022
Commitments And Contingencies Disclosure [Abstract]  
Summary of Minimum Significant Contractual Obligations

 

 

Payments due by period (1)

 

(In thousands)

 

Total

 

 

Less than
1 year

 

 

1-3 years

 

 

4-5 years

 

Convertible Senior Notes (2)

 

$

230,840

 

 

$

12,420

 

 

$

218,420

 

 

$

—

 

Operating leases (3)

 

 

6,983

 

 

 

1,545

 

 

 

3,221

 

 

 

2,217

 

Inventory purchase commitments (4)

 

 

49,853

 

 

 

17,753

 

 

 

21,700

 

 

 

10,400

 

Catalent Termination (5)

 

 

4,000

 

 

 

—

 

 

 

4,000

 

 

 

—

 

Settlement and Release Agreement (6)

 

 

3,385

 

 

 

3,385

 

 

 

—

 

 

 

—

 

Total

 

 

295,061

 

 

 

35,103

 

 

 

247,341

 

 

 

12,617

 

 

(1)
Excludes a liability for uncertain tax positions totaling $6.2 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 secured notes due 2024 issued in December 2019. The notes will mature and will be payable on December 31, 2024. Refer to Note 8.
(3)
Represents payments for the operating leases of the Company’s Pearl River NY headquarters, the Company’s lab and office space in Waltham, MA.
(4)
Includes minimum purchase commitment from Catalent for Inbrija under the manufacturing services (supply) agreement. The Company terminated its existing supply agreement with Catalent on December 31, 2022 and renegotiated a new supply agreement effective January 1, 2023. Under the terms of the new supply agreement with Catalent, the Company is required to make minimum purchase obligations through 2024. Furthermore, pursuant to the new supply agreement as amended, the Company agreed to pay Catalent $2 million in 2023 in connection with certain activities related to the operational readiness of the larger size 7 spray dryer ("PSD-7") at the Chelsea manufacturing facility, which is expected to be operational by 2026. In addition to the operational readiness payment, the Company agreed that it would reimburse a portion of Catalent’s costs in completing the installation and qualification of the PSD-7, which the Company believes will be beneficial to its future production needs, in the amount of up to $2 million. This amount will be paid quarterly over a one-year period commencing no sooner than September 30, 2023.
(5)
Represents the termination fee payable to Catalent that discontinued the Company's obligations under the 2021 MSA. The termination fee is payable in April 2024.
(6)
Represents the commitments specified in the Settlement and Release Agreement between the Company and Catalent to settle any and all outstanding purchase commitments associated with the 2021 MSA.
v3.22.4
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2022
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]  
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

(In thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

2022

 

 

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

 

 

Money market funds

 

$

15,322

 

 

$

—

 

 

$

—

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

—

 

 

 

—

 

 

 

41,200

 

Derivative liability - conversion option

 

 

—

 

 

 

—

 

 

 

—

 

2021

 

 

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

 

 

Money market funds

 

$

12,192

 

 

$

—

 

 

$

—

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

—

 

 

 

—

 

 

 

49,600

 

Derivative liability - conversion option

 

 

—

 

 

 

—

 

 

 

37

 
Contingent Consideration Liability  
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]  
Schedule of Contingent Liabilities

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.

(In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Acquired contingent consideration:

 

 

 

 

 

 

Balance, beginning of period

 

$

49,600

 

 

$

48,200

 

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

 

 

(6,659

)

 

 

2,895

 

Royalty payments

 

 

(1,741

)

 

 

(1,495

)

Balance, end of period

 

$

41,200

 

 

$

49,600

 
Derivative Liability-Conversion Option  
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]  
Schedule of Fair Value Reconciliation of Derivative Liabilities

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)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Derivative Liability-Conversion Option

 

 

 

 

 

 

Balance, beginning of period

 

$

37

 

 

$

1,193

 

Fair value adjustment

 

 

(37

)

 

 

(1,156

)

Balance, end of period

 

$

—

 

 

$

37

 
v3.22.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of Domestic and Foreign Components of (Loss) Income Before Income Taxes

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

 

(In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Domestic

 

$

(60,179

)

 

$

(112,530

)

Foreign

 

 

24,932

 

 

 

3,456

 

Total

 

$

(35,247

)

 

$

(109,074

)
Schedule of Benefit from Income Taxes

The benefit (expense) from income taxes in 2022 and 2021 consists of current and deferred federal, state and foreign taxes as follows:

 

(In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Current:

 

 

 

 

 

 

Federal

 

$

(243

)

 

$

230

 

State

 

 

(115

)

 

 

(182

)

Foreign

 

 

(37

)

 

 

(113

)

 

 

 

(395

)

 

 

(65

)

Deferred:

 

 

 

 

 

 

Federal

 

 

(30,234

)

 

 

4,412

 

State

 

 

(40

)

 

 

711

 

Foreign

 

 

—

 

 

 

62

 

 

 

 

(30,274

)

 

 

5,185

 

Total benefit from income taxes

 

$

(30,669

)

 

$

5,120

 
Schedule of Reconciliation of the Statutory U.S. Federal Income Tax Rate to the Entity's Effective Income Tax Rate

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, 2022

 

 

Year ended December 31, 2021

 

U.S. federal statutory tax rate

 

 

21.0

%

 

 

21.0

%

State and local income taxes

 

 

(0.3

)%

 

 

0.4

%

Stock option compensation

 

 

(0.2

)%

 

 

(0.1

)%

Stock option shortfall

 

 

(8.8

)%

 

 

(5.0

)%

GILTI Inclusion

 

 

(8.3

)%

 

 

—

 

Uncertain tax positions

 

 

0.4

%

 

 

0.5

%

Other nondeductible and permanent differences

 

 

(7.7

)%

 

 

(2.6

)%

U.S. write-off/expiration

 

 

(255.8

)%

 

 

—

 

Valuation allowance, net of foreign tax rate
    differential

 

 

151.6

%

 

 

(9.5

)%

Biotie Finland cancellation of debt exclusion

 

 

21.7

%

 

 

—

 

Federal return to provision differences

 

 

(0.6

)%

 

 

—

 

Effective income tax rate

 

 

(87.0

)%

 

 

4.7

%
Schedule of Deferred Tax Assets and Liabilities The components of the deferred tax assets and liabilities are as follows:

 

(In thousands)

 

December 31, 2022

 

 

December 31, 2021

 

Deferred tax assets:

 

 

 

 

 

 

Net operating loss carryforward

 

$

74,576

 

 

$

77,510

 

Capital loss carryforward

 

 

11,100

 

 

 

116,717

 

Tax credits

 

 

34,301

 

 

 

34,332

 

Stock based compensation

 

 

8,896

 

 

 

12,257

 

Contingent consideration

 

 

10,807

 

 

 

12,730

 

Employee compensation

 

 

1,438

 

 

 

1,513

 

Rebate and returns reserve

 

 

2,003

 

 

 

2,290

 

Capitalized R&D

 

 

1,191

 

 

 

10,696

 

Derivative liability

 

 

—

 

 

 

9

 

Other

 

 

5,421

 

 

 

7,656

 

Total deferred tax assets

 

$

149,733

 

 

$

275,710

 

Valuation allowance

 

 

(106,702

)

 

 

(193,253

)

Total deferred tax assets net of valuation allowance

 

$

43,031

 

 

$

82,457

 

Deferred tax liabilities:

 

 

 

 

 

 

Intangible assets

 

 

(77,876

)

 

 

(83,930

)

Convertible debt

 

 

(9,190

)

 

 

(12,842

)

Depreciation

 

 

(167

)

 

 

400

 

Other

 

 

-

 

 

 

(15

)

Total deferred tax liabilities

 

$

(87,233

)

 

$

(96,387

)

Net deferred tax liability

 

$

(44,202

)

 

$

(13,930

)
Schedule of Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits

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

 

(In thousands)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Beginning of period balance

 

$

6,370

 

 

$

7,093

 

Increases for tax positions taken during a prior period

 

 

—

 

 

 

—

 

Decreases for tax positions taken during a
    prior period

 

 

(133

)

 

 

(723

)

Increases for tax positions taken during the
    current period

 

 

—

 

 

 

—

 

 

 

$

6,237

 

 

$

6,370

 
Reconciliation of Beginning and Ending Amounts of Valuation Allowances

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, 2021

 

$

186,491

 

 

 

10,028

 

 

 

(3,266

)

 

$

193,253

 

Year ended December 31, 2022

 

$

193,253

 

 

 

233

 

 

 

(86,784

)

 

$

106,702

 
v3.22.4
Loss Per Share (Tables)
 12 Months Ended
Dec. 31, 2022
Earnings Per Share [Abstract]  
Schedule of Computation of Basic and Diluted Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2022 and 2021:

 

(In thousands, except per share data)

 

Year ended December 31, 2022

 

 

Year ended December 31, 2021

 

Basic and diluted

 

 

 

 

 

 

Net loss

 

$

(65,916

)

 

$

(103,954

)

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

 

 

19,707

 

 

 

10,621

 

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

 

 

—

 

 

 

—

 

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

 

 

19,707

 

 

 

10,621

 

Net loss per share—basic

 

$

(3.34

)

 

$

(9.79

)

Net loss per share—diluted

 

$

(3.34

)

 

$

(9.79

)
Schedule of Anti-dilutive Securities Excluded from Calculation of Net Income per Diluted Share

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, 2022

 

 

Year ended December 31, 2021

 

Denominator

 

 

 

 

 

 

Stock options and restricted common shares

 

 

996

 

 

 

1,199

 
v3.22.4
Summary of Significant Accounting Policies - Additional Information (Details)
 1 Months Ended 12 Months Ended
Nov. 11, 2022
Sep. 30, 2022
Jun. 22, 2022
$ / shares
Jun. 01, 2022
USD ($)
shares
Dec. 24, 2019
Oct. 01, 2017
USD ($)
Jan. 31, 2023
USD ($)
Oct. 31, 2022
USD ($)
Nov. 30, 2021
USD ($)
Dec. 31, 2022
USD ($)
Customer
Segment
shares
Dec. 31, 2021
USD ($)
Segment
shares
Dec. 31, 2020
USD ($)
shares
Mar. 13, 2023
USD ($)
Sep. 30, 2020
shares
Sep. 17, 2020
shares
Dec. 31, 2019
shares
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]                                
Reverse stock split, description                       1-for-6 reverse stock split        
Stockholders' equity note, stock split, conversion ratio                       0.167        
Common stock, Authorized shares | shares                   61,666,666 61,666,666 61,666,666     61,666,666 13,333,333
Restricted Cash                                
Investments                   $ 0 $ 0          
Other Comprehensive Income (Loss)                                
Foreign currency translation adjustment, Tax                   0 0          
Foreign currency translation adjustment                   1,645,000 1,786,000          
Property and Equipment                                
Impairment Charges                   0            
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Liability related to sale of future royalties                   0            
Credit received as reduction to payroll tax expense                   0 4,200,000          
Contract Liabilities                   6,100,000 5,900,000          
Contract Assets                   0 0          
Revenues                   118,566,000 129,071,000          
Operating expenses                   153,906,000 208,109,000          
Interest income                   $ 1,909,000 5,000          
Allowance for Cash Discounts                                
Time period needed typically to settle cash discounts                   34 days            
Allowance for cash discounts                   $ 1,800,000 2,000,000.0          
Reserve for allowance for cash discounts                   400,000 800,000          
Allowance for Doubtful Accounts                                
Allowance for doubtful accounts, write-offs                   100,000 200,000          
Allowance related to chargebacks                   3,400,000 1,000,000.0          
Payment related to chargebacks                   3,200,000 $ 1,500,000          
Reserve for chargebacks allowance                   $ 300,000            
Segment and Geographic Information                                
Number of operating segments | Segment                   1 1          
Number of reportable operating segments | Segment                   1 1          
Cash, cash equivalents, and restricted cash                   $ 44,675,000 $ 65,223,000 $ 102,895,000        
Cash paid for interest                   7,157,000 6,000          
Net loss                   (65,916,000) (103,954,000)          
Royalty Revenues                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Revenues                   $ 14,221,000 14,882,000          
Product revenue                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Number of customers | Customer                   5            
Accounts receivable                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Number of customers | Customer                   4            
Convertible Senior Secured Notes due 2024                                
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]                                
Reverse stock split, description                   1-for-6            
Segment and Geographic Information                                
Interest rate (as a percent)         6.00%                     6.00%
Debt repurchase price percentage on principal amount         100.00%                      
VERSION A                                
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]                                
Reverse stock split, description 1-for-2 to 1-for-20                              
Segment and Geographic Information                                
Cash, cash equivalents, and restricted cash                   $ 44,700,000            
Restricted cash                   6,200,000            
Periodic Interest payment from restricted escrow cash                   6,200,000            
Licensing royalties received               $ 16,500,000                
Closing bid price of common stock | $ / shares     $ 1.00                          
Number of additional days for complying with minimum bid requirement     180 days                          
Net loss                   $ (65,900,000) $ (104,000,000.0)          
VERSION A | Convertible Senior Secured Notes due 2024                                
Segment and Geographic Information                                
Interest rate (as a percent)                   6.00%            
Number of shares issued | shares       10,992,206                        
Cash paid for interest       $ 900,000                        
Periodic Interest payment from restricted escrow cash                   $ 6,200,000            
Esteve Germany [Member]                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Upfront Payment Received                 $ 5,900,000              
Esteve Pharmaceuticals                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Revenues                   2,900,000            
Revenue from remaining performance obligation                   700,000            
Alkermes                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Litigation Settlement, Amount Awarded from Other Party               18,300,000                
Operating expenses               16,600,000                
Interest income               1,700,000                
Alkermes | Subsequent event                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Litigation Settlement, Amount Awarded from Other Party             $ 18,300,000                  
Alkermes | Supply agreement                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Litigation Settlement, Amount Awarded from Other Party               $ 18,300,000                
Alkermes | VERSION A                                
Segment and Geographic Information                                
Licensing royalties received                   $ 1,800,000            
Silicon Valley Bank                                
Segment and Geographic Information                                
Percentage of unrestricted cash and cash equivalents                   22.00%            
Silicon Valley Bank | Subsequent event                                
Segment and Geographic Information                                
Deposit                         $ 8,300,000      
Royalty Agreement                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Non cash royalty payment received           $ 40,000,000                    
Estimated effective annual interest rate                   15.00%            
Neurelis Collaboration Agreement | Royalty Revenues                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Revenues                   $ 3,800,000            
Royalty revenue capped                   $ 5,100,000            
Minimum                                
Property and Equipment                                
Estimated useful lives                   1 year            
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Product revenue payment term                   30 days            
Minimum | Supply agreement | Alkermes License Agreement                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Purchase requirements threshold percentage   75.00%                            
Maximum                                
Property and Equipment                                
Estimated useful lives                   7 years            
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Product revenue payment term                   35 days            
Maximum | Supply agreement | Alkermes License Agreement                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Purchase requirements threshold percentage   100.00%                            
Maximum | Supply agreement | Patheon Inc Second Manufacturing agreement                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Purchase requirements threshold percentage   25.00%                            
UNITED STATES | Customers | Product revenue                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Concentration risk, percentage                   91.00% 91.00%          
UNITED STATES | Customers | Accounts receivable                                
Non-Cash Interest Expense on Liability Related to Sale of Future Royalties                                
Concentration risk, percentage                   85.00% 92.00%          
Letters of Credit                                
Restricted Cash                                
Restricted Cash and Cash Equivalents                   $ 300,000            
Previously Reported                                
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]                                
Common stock, Authorized shares | shares                       370,000,000   370,000,000   80,000,000
v3.22.4
Summary of Significant Accounting Policies - Additional Information (Details1) - Esteve Pharmaceuticals
$ in Millions
Dec. 31, 2022
USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Revenue from remaining performance obligation $ 0.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2037-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period
Germany | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 12 years
Spain | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 13 years
v3.22.4
Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Accounting Policies [Abstract]      
Cash and cash equivalents $ 37,536 $ 45,634 $ 71,369
Restricted cash 6,884 13,400 12,917
Restricted cash-non current 255 6,189 18,609
Total Cash, cash equivalents and restricted cash per statement of cash flows $ 44,675 $ 65,223 $ 102,895
v3.22.4
Summary of Significant Accounting Policies - Schedule of Major Classes of Inventory (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Inventory Disclosure [Abstract]    
Raw materials $ 6,212 $ 3,338
Finished goods 6,540 15,210
Total $ 12,752 $ 18,548
v3.22.4
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Disaggregation Of Revenue [Line Items]    
Total net revenues $ 118,566 $ 129,071
Ampyra    
Disaggregation Of Revenue [Line Items]    
Total net revenues 72,945 84,555
Inbrija U.S.    
Disaggregation Of Revenue [Line Items]    
Total net revenues 27,989 29,634
Inbrija ex-U.S.    
Disaggregation Of Revenue [Line Items]    
Total net revenues 2,911  
Net Product Revenues    
Disaggregation Of Revenue [Line Items]    
Total net revenues 103,845 114,189
Royalty Revenues    
Disaggregation Of Revenue [Line Items]    
Total net revenues 14,221 $ 14,882
License Revenue    
Disaggregation Of Revenue [Line Items]    
Total net revenues $ 500  
v3.22.4
Summary of Significant Accounting Policies - Summary of Allowance for Cash Discounts (Details) - Cash discounts - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Valuation And Qualifying Accounts Disclosure [Line Items]    
Beginning balance $ 780 $ 575
Allowances for sales 1,830 1,992
Actual credits (2,203) (1,787)
Ending balance $ 407 $ 780
v3.22.4
Leases - Additional Information (Details)
 1 Months Ended 12 Months Ended
Mar. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
ft²
Jun. 30, 2022
ft²
Dec. 31, 2021
USD ($)
Dec. 31, 2018
ft²
Oct. 31, 2016
USD ($)
ft²
Operating Lease Information            
Right-of-use assets   $ 5,287,000   $ 6,751,000    
Lease liabilities   $ 5,886,000        
Operating lease description   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. The Company’s leases have remaining lease terms of 4 years to 5.5 years.        
Operating lease weighted-average remaining lease term   4 years 4 months 24 days        
Operating lease weighted-average discount rate   7.92%        
Ardsley, New York            
Operating Lease Information            
Area of leased property | ft²   160,000        
Termination option effective date   Jun. 22, 2022        
Termination Fee   $ 4,700,000        
Pearl River, New York            
Operating Lease Information            
Lease term     6 years      
Area of leased property | ft²     21,000      
Operating sublease, existence of option to extend   false        
Base Rent   $ 0        
Base rent payment commencing on January 1, 2023   $ 300,000        
Base rent subject to annual escalation percentage   2.00%        
Chelsea, Massachusetts | Manufacturing Facility            
Operating Lease Information            
Area of leased property | ft²         95,000  
Contribution of fund agreed   $ 2,000,000        
Chelsea, Massachusetts | Manufacturing Facility | Subsequent event            
Operating Lease Information            
Contribution of fund agreed $ 2,000,000          
Waltham, MA | Office and Laboratory Space            
Operating Lease Information            
Lease term           10 years
Area of leased property | ft²           26,000
Base Rent           $ 1,200,000
Minimum            
Operating Lease Information            
Operating lease remaining lease term   4 years        
Maximum            
Operating Lease Information            
Operating lease remaining lease term   5 years 6 months        
v3.22.4
Leases - Schedule of ROU Assets and Lease Liabilities Related to Operating Leases (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]    
Right-of-use assets $ 5,287 $ 6,751
Current lease liabilities 1,545 8,186
Non-current lease liabilities $ 4,341 $ 4,086
v3.22.4
Leases - Components of Lease Costs (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Leases [Abstract]    
Operating lease cost $ 3,843 $ 6,030
Variable lease cost 2,005 4,156
Short-term lease cost 8 851
Total lease cost $ 5,855 $ 11,037
v3.22.4
Leases - Schedule of Future Minimum Commitments under all Non-Cancelable Operating Leases (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Leases [Abstract]  
2023 $ 1,545
2024 1,588
2025 1,633
2026 1,678
2027 357
Later years 182
Total lease payments 6,983
Less: Imputed interest (1,097)
Operating Lease Liability $ 5,886
v3.22.4
Leases - Summary of Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Operating cash flow information:    
Cash paid for amounts included in the measurement of lease liabilities $ 8,191 $ 6,158
v3.22.4
Intangible Assets - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2018
Intangible Assets      
Amortization expenses of intangible assets including website development $ 30,900 $ 31,000  
Amortization expenses of intangible assets 30,764 30,764  
Amortization expenses of website development $ 100 300  
Weighted-average remaining useful lives of all amortizable assets 11 years    
Inbrija      
Intangible Assets      
Amortization expenses of intangible assets $ 30,800 $ 30,700  
Inbrija | IPR&D      
Intangible Assets      
Indefinite-lived intangible asset, Cost     $ 423,000
v3.22.4
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Intangible Assets    
Finite-lived intangible asset, Accumulated Amortization $ (128,815) $ (101,605)
Finite-lived intangible asset, Net Carrying Amount 305,087  
Intangible asset, Cost 437,585 437,559
Intangible asset, Additions   26
Intangible asset, Disposals (3,683)  
Intangible asset, Net Carrying Amount 305,087 335,980
Inbrija    
Intangible Assets    
Finite-lived intangible asset, Accumulated Amortization $ (117,927) $ (87,164)
Estimated Remaining Useful Lives (Years) 11 years 11 years
Finite-lived intangible asset, Cost $ 423,000 $ 423,000
Finite-lived intangible asset, Net Carrying Amount 305,073 335,836
Website Development Costs | Minimum    
Intangible Assets    
Finite-lived intangible asset, Accumulated Amortization $ 10,888 $ (14,441)
Estimated Remaining Useful Lives (Years) 1 year 1 year
Finite-lived intangible asset, Cost $ 14,585 $ 14,559
Finite-lived intangible asset, Additions   26
Finite-lived intangible asset, Disposals (3,683)  
Finite-lived intangible asset, Net Carrying Amount $ 14 $ 144
Website Development Costs | Maximum    
Intangible Assets    
Estimated Remaining Useful Lives (Years) 3 years 3 years
v3.22.4
Intangible Assets - Schedule of Estimated Future Amortization Expense for Intangible Assets (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Estimated future amortization expense  
2023 $ 30,772
2024 30,768
2025 30,764
2026 30,764
2027 30,764
Thereafter 151,255
Finite-lived intangible asset, Net Carrying Amount $ 305,087
v3.22.4
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Property and Equipment    
Property and equipment $ 9,358 $ 39,379
Less accumulated depreciation (6,755) (34,997)
Property and equipment, net $ 2,603 4,382
Minimum    
Property and Equipment    
Estimated useful lives used 1 year  
Maximum    
Property and Equipment    
Estimated useful lives used 7 years  
Machinery and equipment    
Property and Equipment    
Property and equipment $ 2,315 2,315
Machinery and equipment | Minimum    
Property and Equipment    
Estimated useful lives used 2 years  
Machinery and equipment | Maximum    
Property and Equipment    
Estimated useful lives used 7 years  
Leasehold improvements    
Property and Equipment    
Property and equipment $ 1,761 15,317
Estimated useful lives used Lesser of useful life or remaining lease term  
Computer equipment    
Property and Equipment    
Property and equipment $ 4,467 17,973
Computer equipment | Minimum    
Property and Equipment    
Estimated useful lives used 1 year  
Computer equipment | Maximum    
Property and Equipment    
Estimated useful lives used 3 years  
Laboratory equipment    
Property and Equipment    
Property and equipment $ 582 1,644
Laboratory equipment | Minimum    
Property and Equipment    
Estimated useful lives used 2 years  
Laboratory equipment | Maximum    
Property and Equipment    
Estimated useful lives used 5 years  
Furniture and fixtures    
Property and Equipment    
Property and equipment $ 233 $ 2,130
Furniture and fixtures | Minimum    
Property and Equipment    
Estimated useful lives used 4 years  
Furniture and fixtures | Maximum    
Property and Equipment    
Estimated useful lives used 7 years  
v3.22.4
Property and Equipment - Additional Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Property Plant And Equipment [Abstract]    
Depreciation and amortization expense $ 1.9 $ 2.9
v3.22.4
Assets Held for Sale - Additional Information (Details) - USD ($)
$ in Millions
 1 Months Ended 12 Months Ended
Feb. 28, 2021
Jan. 12, 2021
Dec. 31, 2022
Long Lived Assets Held For Sale [Line Items]      
Transaction Closed Date   Feb. 10, 2021  
estimated fair value of assets held for sale     $ 71.8
Carrying Value of the Assets Held For Sale     129.7
Proceeds from completion of divestiture     74.0
Prepaid Expenses      
Long Lived Assets Held For Sale [Line Items]      
Carrying Value of the Assets Held For Sale     0.1
Property and Equipment      
Long Lived Assets Held For Sale [Line Items]      
Carrying Value of the Assets Held For Sale     $ 129.6
Chelsea, Massachusetts | Catalent Member      
Long Lived Assets Held For Sale [Line Items]      
Purchase price of assets related to manufacturing activities   $ 80.0  
Additional raw materials purchase price   $ 2.3  
Manufacturing Facility      
Long Lived Assets Held For Sale [Line Items]      
loss on assets held for sale $ 57.9    
v3.22.4
Common Stock Options and Restricted Stock - Additional Information (Details)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
$ / shares
shares
Dec. 31, 2020
shares
Sep. 30, 2020
shares
Sep. 17, 2020
shares
Dec. 31, 2019
shares
Jun. 19, 2019
$ / shares
Share-based compensation expense              
Reverse stock split, description     1-for-6 reverse stock split        
Stockholders' equity note, stock split, conversion ratio     0.167        
Common stock, Authorized shares 61,666,666 61,666,666 61,666,666   61,666,666 13,333,333  
Common stock, par value (in dollars per share) | $ / shares $ 0.001 $ 0.001          
Options granted (in shares) 98            
Weighted average exercise price | $ / shares $ 78.00 $ 94.38          
Share-based compensation expense recognized | $ $ 1,496 $ 2,995          
Total unrecognized compensation costs related to unvested stock options and restricted stock awards that the company expects to recognize | $ $ 600            
Weighted average period 2 years 7 months 6 days            
Stock Options | Employees and Directors              
Share-based compensation expense              
Weighted average fair value of options granted (in dollars per share) | $ / shares $ 0.84 $ 2.57          
Options granted (in shares) 97,950            
Weighted average exercise price | $ / shares $ 1.18            
Total compensation charge to be recognized over service period | $ $ 80            
Share-based compensation expense recognized | $ $ 50            
Stock Options | Non Employee              
Share-based compensation expense              
Options granted (in shares) 0 0          
Stock Options and Restricted Stock Awards              
Share-based compensation expense              
Compensation costs capitalized in inventory balances | $ $ 0            
Stock Options and Restricted Stock Awards | Employees and Directors              
Share-based compensation expense              
Share-based compensation expense recognized | $ $ 1,500 $ 3,000          
The 2006 Plan              
Share-based compensation expense              
Expiration period   10 years          
Number of shares authorized for issuance 2,485,342            
Aggregate restricted stock granted (in shares) 1,955,881            
Remaining restricted stock subject to outstanding options (in shares) (211,293)            
The 2015 Plan              
Share-based compensation expense              
Expiration period   10 years          
Number of shares authorized for issuance 3,150,000            
Aggregate restricted stock granted (in shares) 1,337,280            
Remaining restricted stock subject to outstanding options (in shares) 644,371            
The 2016 Plan              
Share-based compensation expense              
Options Issued 170,000            
The 2019 ESPP Plan              
Share-based compensation expense              
Common stock, Authorized shares 250,000            
Common stock, par value (in dollars per share) | $ / shares             $ 0.001
Previously Reported              
Share-based compensation expense              
Common stock, Authorized shares     370,000,000 370,000,000   80,000,000  
v3.22.4
Common Stock Options and Restricted Stock - Schedule of Weighted Average Assumptions Using the Black-Scholes Option Pricing Model (Details) - Stock Options
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Estimated volatility (as a percent) 84.19% 84.26%
Expected life 6 years 8 months 12 days 6 years 3 months
Risk free interest rate (as a percent) 2.69% 1.36%
v3.22.4
Common Stock Options and Restricted Stock - Schedule of Share-based Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Share-based compensation expense recognized $ 1,496 $ 2,995
Research And Development [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Share-based compensation expense recognized 75 694
Selling, general and administrative    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Share-based compensation expense recognized $ 1,421 2,282
Cost of sales    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Share-based compensation expense recognized   $ 19
v3.22.4
Common Stock Options and Restricted Stock - Schedule of Stock Options Activity (Details)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2022
USD ($)
$ / shares
shares
Stock Option Activity  
Beginning balance (in shares) | shares 1,186
Granted (in shares) | shares 98
Forfeited and expired (in shares) | shares (258)
Ending balance (in shares) | shares 1,026
Vested and expected to vest at the end of the period | shares 1,013
Vested and exercisable at the end of the period | shares 753
Weighted Average Exercise Price  
Balance at the beginning of the period (in dollars per share) | $ / shares $ 94.38
Granted (in dollars per share) | $ / shares 1.18
Forfeited and expired (in dollars per share) | $ / shares 124.14
Balance at the end of the period (in dollars per share) | $ / shares 78.00
Vested and expected to vest at the end of the period (in dollars per share) | $ / shares 78.97
Vested and exercisable at the end of the period (in dollars per share) | $ / shares $ 104.98
Weighted Average Remaining Contractual Term  
Balance at the end of the period 5 years 9 months 18 days
Vested and expected to vest at the end of the period 5 years 8 months 12 days
Vested and exercisable at the end of the period 4 years 7 months 6 days
Intrinsic Value  
Balance at the end of the period | $ $ 19
Vested and expected to vest at the end of the period | $ 18
Vested and exercisable at the end of the period | $ $ 8
v3.22.4
Common Stock Options and Restricted Stock - Schedule of Stock Options Activity, By Exercise Price Range (Details)
shares in Thousands
 12 Months Ended
Dec. 31, 2022
$ / shares
shares
Options Outstanding  
Outstanding ending balance (in shares) | shares 1,026
Weighted-average remaining contractual life 5 years 9 months 18 days
Weighted-average exercise price (in dollars per share) $ 78.00
Options Exercisable  
Exercisable ending balance (in shares) | shares 753
Weighted-average exercise price (In dollars per share) $ 104.98
Range $3.16 - $3.74  
Range of Exercise Price  
Stock option, exercise price range, lower limit (in dollars per share) 0.31
Stock option, exercise price range, upper limit (in dollars per share) $ 3.74
Options Outstanding  
Outstanding ending balance (in shares) | shares 374
Weighted-average remaining contractual life 9 years
Weighted-average exercise price (in dollars per share) $ 3.04
Options Exercisable  
Exercisable ending balance (in shares) | shares 105
Weighted-average exercise price (In dollars per share) $ 2.87
Range $3.75 - $14.46  
Range of Exercise Price  
Stock option, exercise price range, lower limit (in dollars per share) 3.75
Stock option, exercise price range, upper limit (in dollars per share) $ 14.46
Options Outstanding  
Outstanding ending balance (in shares) | shares 223
Weighted-average remaining contractual life 6 years 8 months 12 days
Weighted-average exercise price (in dollars per share) $ 11.85
Options Exercisable  
Exercisable ending balance (in shares) | shares 221
Weighted-average exercise price (In dollars per share) $ 11.92
Range $15.30 - $164.85  
Range of Exercise Price  
Stock option, exercise price range, lower limit (in dollars per share) 15.30
Stock option, exercise price range, upper limit (in dollars per share) $ 182.76
Options Outstanding  
Outstanding ending balance (in shares) | shares 219
Weighted-average remaining contractual life 3 years 3 months 18 days
Weighted-average exercise price (in dollars per share) $ 138.77
Options Exercisable  
Exercisable ending balance (in shares) | shares 217
Weighted-average exercise price (In dollars per share) $ 139.38
Range $165.30 - $214.44  
Range of Exercise Price  
Stock option, exercise price range, lower limit (in dollars per share) 182.94
Stock option, exercise price range, upper limit (in dollars per share) $ 240.18
Options Outstanding  
Outstanding ending balance (in shares) | shares 205
Weighted-average remaining contractual life 1 year 9 months 18 days
Weighted-average exercise price (in dollars per share) $ 217.99
Options Exercisable  
Exercisable ending balance (in shares) | shares 205
Weighted-average exercise price (In dollars per share) $ 217.99
Range $215.28 - $246.42  
Range of Exercise Price  
Stock option, exercise price range, lower limit (in dollars per share) 246.42
Stock option, exercise price range, upper limit (in dollars per share) $ 246.42
Options Outstanding  
Outstanding ending balance (in shares) | shares 5
Weighted-average remaining contractual life 1 year 3 months 18 days
Weighted-average exercise price (in dollars per share) $ 246.42
Options Exercisable  
Exercisable ending balance (in shares) | shares 5
Weighted-average exercise price (In dollars per share) $ 246.42
v3.22.4
Common Stock Options and Restricted Stock - Schedule of Restricted Stock Activity (Details) - Restricted Stock
shares in Thousands
 12 Months Ended
Dec. 31, 2022
shares
Restricted Stock Activity  
Nonvested at the beginning of the period (in shares) 116
Vested (in shares) (108)
Forfeited (in shares) (8)
v3.22.4
Debt - Additional Information (Details)
$ / shares in Units, € in Millions
 9 Months Ended 12 Months Ended
Sep. 17, 2020
USD ($)
shares
Dec. 24, 2019
USD ($)
TradingDay
Sep. 30, 2020
USD ($)
Dec. 31, 2022
USD ($)
Loan
$ / shares
shares
Dec. 31, 2021
USD ($)
shares
Dec. 31, 2020
shares
Dec. 31, 2019
USD ($)
shares
Dec. 31, 2022
EUR (€)
shares
Jul. 31, 2022
USD ($)
Apr. 18, 2016
USD ($)
Apr. 18, 2016
EUR (€)
Jun. 17, 2014
USD ($)
Debt Instrument [Line Items]                        
Cash payment made for exchange of notes   $ 200                    
Aggregate payment on debt exchange   55,200,000     $ 69,000,000              
Reverse stock split, description           1-for-6 reverse stock split            
Gain on extinguishment of debt       $ 27,142,000     $ 55,100,000          
Adjusted equity component of convertible notes exchange       $ 38,400,000                
Common stock, Authorized shares | shares 61,666,666     61,666,666 61,666,666 61,666,666 13,333,333 61,666,666        
Derivative liability reclassified to equity $ 18,300,000                      
Income tax effects on equity transactions     $ 4,400,000 $ 4,400,000                
Interest expense       30,200,000 $ 30,035,000              
Letters of Credit                        
Debt Instrument [Line Items]                        
Restricted Cash and Cash Equivalents       $ 300,000                
Research and development loans                        
Debt Instrument [Line Items]                        
Principal         0              
Fair value of debt                   $ 2,900,000 € 2.6  
Finland's Ministry of Finance | Research and development loans                        
Debt Instrument [Line Items]                        
Loan repayment ending period       2021-01                
Non-Convertible Capital Loan                        
Debt Instrument [Line Items]                        
Fair value of debt       $ 20,500,000       € 18.2        
Number of loans | Loan       14                
Non-Convertible Capital Loan | Finland's Ministry of Finance                        
Debt Instrument [Line Items]                        
Residual payment amount                 $ 100,000      
Convertible Senior Notes due 2021                        
Debt Instrument [Line Items]                        
Principal amount of debt exchanged   $ 276,000,000.0                    
Interest rate (as a percent)   1.75%                   1.75%
Principal amount denomination for debt conversion   $ 1,000                    
Principal                       $ 345,000,000
Debt instrument, principal amount outstanding   $ 69,000,000.0   $ 69,000,000.0                
Interest expense       0 1,457,000              
Convertible Senior Secured Notes due 2024                        
Debt Instrument [Line Items]                        
Interest rate (as a percent)   6.00%         6.00%          
Principal amount of debt issued for exchange   $ 750                    
Principal   $ 207,000,000.0                    
Debt instrument, principal amount outstanding       $ 207,000,000 207,000,000              
Notes maturity date   Dec. 01, 2024                    
Interest payment in shares, percentage of daily volume-weighted average price   95.00%                    
Notes frequency of periodic payment           semi-annually in arrears            
Interest in shares of common stock, threshold trading days | TradingDay   10                    
Initial conversion rate of common stock       47.6190                
Initial conversion price of convertible notes into common stock (in dollars per share) | $ / shares       $ 21.00                
Principal amount of Notes or an integral multiple thereof in which holder may repurchase the Notes       $ 1,000                
Reverse stock split, description       1-for-6                
Debt instrument conversion threshold stock price percentage   130.00%                    
Debt repurchase price percentage on principal amount   100.00%                    
Debt default, nonpayment of interest, period   30 days                    
Debt default, failure to convert notes, period   5 days                    
Debt default, non-compliance with covenants, period   60 days                    
Fair value of derivative liability   $ 59,400,000   $ (0) 37,000              
Debt discount   $ 75,100,000                    
Interest expense       28,427,000 $ 25,826,000              
Effective interest rate on liability component (as a percent)   18.13%                    
Debt fair value amount       157,300,000                
Debt Issuance Costs, Gross       $ 5,700,000                
Convertible Senior Secured Notes due 2024 | Minimum                        
Debt Instrument [Line Items]                        
Debt default, non-payment of outstanding principal   $ 30,000,000.0                    
Debt default, failure to pay final judgements   $ 30,000,000.0                    
Debt default, percentage of principal outstanding required for immediate payment   25.00%                    
v3.22.4
Debt - Summary of Outstanding Note Balances (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 24, 2019
Convertible Senior Notes due 2021      
Debt Instrument [Line Items]      
Principal $ 69,000   $ 69,000
Convertible Senior Secured Notes due 2024      
Debt Instrument [Line Items]      
Principal 207,000 $ 207,000  
Less: debt discount and debt issuance costs, net (39,969) (55,975)  
Net carrying amount 167,031 151,025  
Equity component 18,257 18,257  
Derivative liability-conversion Option $ (0) $ 37 $ 59,400
v3.22.4
Debt - Schedule of Interest Expense Recognized Related to the Notes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Debt Instrument [Line Items]    
Total interest expense $ 30,200 $ 30,035
Convertible Senior Secured Notes due 2024    
Debt Instrument [Line Items]    
Contractual interest expense 12,420 12,420
Amortization of debt issuance costs 1,137 952
Amortization of debt discount 14,870 12,454
Total interest expense 28,427 25,826
Convertible Senior Notes due 2021    
Debt Instrument [Line Items]    
Contractual interest expense 0 428
Amortization of debt issuance costs 0 95
Amortization of debt discount 0 934
Total interest expense $ 0 $ 1,457
v3.22.4
Liability Related to Sale of Future Royalties - Additional Information (Details) - Royalty Purchase Agreement
$ in Millions
Oct. 01, 2017
USD ($)
Liability Related to Sale of Future Royalties [Line Items]  
Payment from royalties $ 40.0
Royalty liability 40.0
Net of transaction costs $ 2.2
v3.22.4
Liability Related to Sale of Future Royalties - Schedule of Activity Within Liability Related to Sale of Future Royalties (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Liability Related to Sale of Future Royalties [Line Items]    
Non-cash royalty revenue payable to HCRP $ (4,762) $ (12,106)
Liability related to sale of future royalties - ending balance 0  
Royalty Purchase Agreement    
Liability Related to Sale of Future Royalties [Line Items]    
Liability related to sale of future royalties - beginning balance 4,460 15,257
Deferred transaction costs amortized 33 234
Non-cash royalty revenue payable to HCRP (4,739) (12,106)
Non-cash interest expense recognized $ 246 1,075
Liability related to sale of future royalties - ending balance   $ 4,460
v3.22.4
Corporate Restructuring - Additional Information (Details) - USD ($)
$ in Millions
 1 Months Ended 9 Months Ended 12 Months Ended
Jan. 31, 2021
Sep. 30, 2021
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost And Reserve [Line Items]        
Approximate percentage of headcount reduction 16.00% 15.00%    
Pre-tax charges for severance and employee separation related costs     $ 0.3 $ 6.0
Research and Development Expense        
Restructuring Cost And Reserve [Line Items]        
Pre-tax charges for severance and employee separation related costs     0.0 0.6
Selling, General and Administrative Expenses        
Restructuring Cost And Reserve [Line Items]        
Pre-tax charges for severance and employee separation related costs     $ 0.3 $ 5.4
v3.22.4
Corporate Restructuring - Summary of Restructuring Costs (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Restructuring And Related Activities [Abstract]    
Restructuring Liability   $ 1,851
Restructuring costs $ 251 6,000
Payments $ (2,102) $ (4,149)
v3.22.4
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Accrued Expenses And Other Current Liabilities [Abstract]    
Product allowances accruals $ 8,899 $ 10,394
Bonus payable 4,329 4,439
Accrued interest 1,035  
Sales force commissions and incentive payments payable 667 727
Administrative expenses 366 757
Vacation accrual 1,477 1,505
Research and development expense accruals 895 702
Commercial and marketing expense accruals 2,892 728
Royalties payable   264
Restructuring liability   1,851
Legal, accounting, and other professional services 50 1,325
Trade relations 278 706
Other accrued expenses 2,792 5,207
Total $ 23,680 $ 28,605
v3.22.4
Commitments and Contingencies - Summary of Minimum Significant Contractual Obligations (Details)
$ in Thousands
Dec. 31, 2022
USD ($)
Operating leases  
Total lease payments $ 6,983
Less than 1 year 1,545
1-3 years 3,221
4-5 years 2,217
Total  
Total 295,061
Less than 1 year 35,103
1-3 years 247,341
4-5 years 12,617
Catalent  
Purchase commitments  
Less than 1 year 10,500
Catalent Termination  
Total 4,000
1-3 years 4,000
Convertible Senior Notes  
Long term debt  
Net carrying amount 230,840
Less than 1 year 12,420
1-3 years 218,420
Inventory Purchase Commitments  
Purchase commitments  
Total 49,853
Less than 1 year 17,753
1-3 years 21,700
4-5 years 10,400
Settlement and Release Agreement  
Purchase commitments  
Total 3,385
Less than 1 year $ 3,385
v3.22.4
Commitments and Contingencies - Summary of Minimum Significant Contractual Obligations (Parenthetical) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Commitment And Contingencies [Line Items]    
Liability for uncertain tax position   $ 6,200
Purchase Commitment, Description   The Company terminated its existing supply agreement with Catalent on December 31, 2022 and renegotiated a new supply agreement effective January 1, 2023. Under the terms of the new supply agreement with Catalent, the Company is required to make minimum purchase obligations through 2024.
Reimbursement amount   $ 2,000
Catalent Member    
Commitment And Contingencies [Line Items]    
Contribution of fund agreed   2,000
Termination fee payment   4,000
Termination fee payment   $ 4,000
Catalent Member | Forecast [Member]    
Commitment And Contingencies [Line Items]    
Contribution of fund agreed $ 2,000  
Convertible Senior Notes    
Commitment And Contingencies [Line Items]    
Notes maturity date   Dec. 31, 2024
Long-term liability   $ 230,840
New Convertible Senior Notes    
Commitment And Contingencies [Line Items]    
Notes maturity date   Dec. 31, 2024
v3.22.4
Commitments and Contingencies - Additional Information (Details) - USD ($)
 1 Months Ended 3 Months Ended 12 Months Ended
Oct. 21, 2022
Jun. 28, 2022
Jan. 31, 2023
Nov. 30, 2022
Oct. 31, 2022
Sep. 30, 2022
Dec. 31, 2022
Jun. 30, 2022
Dec. 31, 2021
Dec. 31, 2020
Commitment And Contingencies [Line Items]                    
Commitments and contingencies                
Purchase Commitment, Description             The Company terminated its existing supply agreement with Catalent on December 31, 2022 and renegotiated a new supply agreement effective January 1, 2023. Under the terms of the new supply agreement with Catalent, the Company is required to make minimum purchase obligations through 2024.      
Inventory, net             $ 12,752,000   18,548,000  
Other Assets Current             6,765,000   999,000  
Cost of sales             30,332,000   $ 40,787,000  
Alkermes                    
Commitment And Contingencies [Line Items]                    
Licensing royalties, awarded amount         $ 15,000,000          
Licensing royalties, prejudgment interest         $ 1,500,000          
Litigation settlement additional amount submitted $ 1,600,000                  
Licensing royalties, Additional awarded amount       $ 1,600,000            
Licensing royalties, additional prejudgment interest       $ 200,000            
Alkermes | Subsequent event                    
Commitment And Contingencies [Line Items]                    
Licensing royalties, awarded amount     $ 18,300,000              
Remaining illegal royalties with pre- and post-award interest and costs     $ 65,000,000              
Catalent Member                    
Commitment And Contingencies [Line Items]                    
Purchase commitments in 2023             10,500,000      
Purchase commitments in 2024             15,500,000      
Purchase commitments in January 1, 2026 through December 31, 2030             5,200,000      
Minimum purchase commitment             18,700,000      
Inventory, net             11,500,000      
Other Assets Current             3,300,000      
Cost of Revenue             3,900,000      
Catalent Member | Inbrija                    
Commitment And Contingencies [Line Items]                    
Purchase Obligation             18,000,000      
Purchase commitments in 2023             10,500,000      
Purchase commitments in 2024             15,500,000      
Cost of sales               $ 8,400,000    
Licensing Agreements                    
Commitment And Contingencies [Line Items]                    
Unpaid license royalties             6,000,000      
Commitments and contingencies                   $ 2,000,000
Payments for legal settlements   $ 750,000       $ 750,000        
Gain related to litigation settlement           $ 1,300,000        
Maximum                    
Commitment And Contingencies [Line Items]                    
Maximum milestone payments             18,700,000      
Capital expenditure provision in 2023             1,000,000      
Capital expenditure provision in 2024             1,000,000      
Minimum | Catalent Member | Inbrija                    
Commitment And Contingencies [Line Items]                    
Original Purchase Obligation             $ 17,000,000      
v3.22.4
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Liabilities Carried at Fair Value:    
Derivative liability - conversion option $ 0 $ 37
Derivative liability 0 37
Level 1 | Recurring basis | Money Market Funds    
Assets Carried at Fair Value:    
Assets, Fair Value 15,322 12,192
Level 3 | Recurring basis    
Liabilities Carried at Fair Value:    
Acquired contingent consideration $ 41,200 49,600
Derivative liability - conversion option   37
Derivative liability   $ 37
v3.22.4
Fair Value Measurements - Schedule of Contingent Liabilities (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Assets and liabilities measured at fair value on a recurring basis utilizing Level 3 inputs    
Balance, beginning of period $ 49,600 $ 48,200
Fair value change to contingent consideration (unrealized) included in the statement of operations $ (6,659) $ 2,895
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] Business Combination Contingent Consideration Arrangements Change In Amount Of Contingent Consideration Liability1 Business Combination Contingent Consideration Arrangements Change In Amount Of Contingent Consideration Liability1
Royalty payments $ (1,741) $ (1,495)
Balance, end of period $ 41,200 $ 49,600
v3.22.4
Fair Value Measurements - Additional Information (Details) - USD ($)
$ in Millions
 9 Months Ended 12 Months Ended
Sep. 17, 2020
Dec. 24, 2019
Sep. 30, 2020
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]              
Common stock, Authorized shares 61,666,666     61,666,666 61,666,666 61,666,666 13,333,333
Income tax effects on equity transactions     $ 4.4 $ 4.4      
Derivative liability reclassified to equity $ 18.3            
Convertible Senior Secured Notes due 2024              
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]              
Debt instrument maturity date       2024-12      
Notes, interest rate   6.00%         6.00%
Notes, maturity date   Dec. 01, 2024          
Convertible Senior Secured Notes due 2024 | Level 2              
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]              
Convertible senior notes       $ 157.3      
Inbrija              
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]              
Milestone payment, minimum       0.0      
Milestone payment, maximum       $ 18.7      
v3.22.4
Fair Value Measurements - Schedule of Fair Value Reconciliation of Derivative Liability (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Fair Value Reconciliation Of Derivative Liability [Line Items]    
Balance, beginning of period $ 37  
Balance, end of period 0 $ 37
Convertible Senior Secured Notes due 2024    
Fair Value Reconciliation Of Derivative Liability [Line Items]    
Balance, beginning of period 37 1,193
Fair value adjustment $ (37) (1,156)
Balance, end of period   $ 37
v3.22.4
License, Research and Collaboration Agreements - Alkermes License - Additional Information (Details) - Alkermes License Agreement
 12 Months Ended
Dec. 31, 2003
Dec. 31, 2022
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]    
License termination period 15 years  
Percentage of products under supply agreement   100.00%
v3.22.4
License, Research and Collaboration Agreements - Supply Agreement - Additional Information (Details) - USD ($)
$ in Millions
 1 Months Ended 12 Months Ended
Sep. 30, 2022
Oct. 31, 2022
Dec. 31, 2022
Dec. 31, 2020
Alkermes        
Supply Agreement        
Licensing royalties, awarded amount   $ 18.3    
Alkermes License Agreement        
Supply Agreement        
Cost Of License Payable       $ 15.0
Biogen        
Supply Agreement        
Additional payments based on the successful achievement of future regulatory or sales milestones       $ 300.0
Supply agreement | Alkermes        
Supply Agreement        
Licensing royalties, awarded amount   $ 18.3    
Supply agreement | Maximum | Patheon Inc Second Manufacturing agreement        
Supply Agreement        
Purchase requirements threshold percentage 25.00%      
Supply agreement | Alkermes License Agreement | Ampyra | Alkermes        
Supply Agreement        
Minimum agreed percentage of annual requirements for purchase     75.00%  
Supply agreement | Alkermes License Agreement | Maximum        
Supply Agreement        
Purchase requirements threshold percentage     100.00%  
v3.22.4
License, Research and Collaboration Agreements - Biogen Agreement - Additional Information (Details) - USD ($)
$ in Millions
 1 Months Ended 12 Months Ended
Oct. 31, 2022
Dec. 31, 2020
Biogen    
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]    
Additional payments based on the successful achievement of future regulatory or sales milestones   $ 300.0
Alkermes    
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]    
Licensing royalties, awarded amount $ 18.3  
v3.22.4
Income Taxes - Additional Information (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Income Tax [Line Items]      
Pre-ownership change net operating losses $ 12,200    
Change Of Control Ownership Percentage Threshold 50.00%    
Change Of Control Ownership Measurement Period 3 years    
Net decrease in valuation allowance $ 86,500    
Deferred tax assets, valuation allowance $ 106,702 $ 193,253 $ 186,491
US federal corporate tax rate 21.00% 21.00%  
Tax Year 2017 [Member]      
Income Tax [Line Items]      
Operating loss carryforwards additional $ 428,700    
Minimum      
Recent Accounting Pronouncements      
Expiration term for statute of limitations 3 years    
Maximum      
Recent Accounting Pronouncements      
Expiration term for statute of limitations 5 years    
Federal      
Income Tax [Line Items]      
Operating loss carryforwards $ 117,600    
Percentage of taxable income will be utilized in any year 80.00%    
Operating loss carryforwards additional $ 42,300    
Biotie U S      
Income Tax [Line Items]      
Operating loss carryforwards $ 120,800    
Operating loss, expected expiration beginning year 2026    
State      
Income Tax [Line Items]      
Operating loss carryforwards $ 312,900 $ 304,800  
Operating loss, expected expiration beginning year 2027    
Outside U.S.      
Income Tax [Line Items]      
Operating loss carryforwards $ 27,000    
Operating loss, expected expiration beginning year 2023    
Research [Member]      
Income Tax [Line Items]      
Tax credit carry-forwards $ 35,100 $ 35,300  
Tax credit carry-forward, expiration beginning year 2023    
Internal Revenue Code, Section 382      
Income Tax [Line Items]      
Valuation allowance on net operating loss and tax credits carryforwards $ 35,300    
Section 382, Ownership Change | State      
Income Tax [Line Items]      
Operating loss carryforwards $ 2,700    
v3.22.4
Income Taxes - Schedule of Domestic and Foreign Components of (Loss) Income Before Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Income Tax [Line Items]    
(Loss) income before taxes $ (35,247) $ (109,074)
Domestic    
Income Tax [Line Items]    
(Loss) income before taxes (60,179) (112,530)
Foreign    
Income Tax [Line Items]    
(Loss) income before taxes $ 24,932 $ 3,456
v3.22.4
Income Taxes - Schedule of Benefit from Income Taxes (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Current:    
Federal $ (243) $ 230
State (115) (182)
Foreign (37) (113)
Total (395) (65)
Deferred:    
Federal (30,234) 4,412
State (40) 711
Foreign   62
Total (30,274) 5,185
Total benefit from income taxes $ (30,669) $ 5,120
v3.22.4
Income Taxes - Schedule of Reconciliation of the Statutory U.S. Federal Income Tax Rate to the Entity's Effective Income Tax Rate (Details)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Reconciliation of statutory federal income tax rate to effective income tax rate    
U.S. federal statutory tax rate 21.00% 21.00%
State and local income taxes (0.30%) 0.40%
Stock option compensation (0.20%) (0.10%)
Stock option shortfall (8.80%) (5.00%)
GILTI Inclusion (8.30%)  
Uncertain tax positions 0.40% 0.50%
Other nondeductible and permanent differences (7.70%) (2.60%)
U.S. write-off/expiration (255.80%)  
Valuation allowance, net of foreign tax rate differential 151.60% (9.50%)
Biotie Finland cancellation of debt exclusion 21.70%  
Federal return to provision differences (0.60%)  
Effective income tax rate (87.00%) 4.70%
v3.22.4
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Deferred tax assets:      
Net operating loss carryforward $ 74,576 $ 77,510  
Capital loss carryforward 11,100 116,717  
Tax credits 34,301 34,332  
Stock based compensation 8,896 12,257  
Contingent consideration 10,807 12,730  
Employee compensation 1,438 1,513  
Rebate and returns reserve 2,003 2,290  
Capitalized R&D 1,191 10,696  
Derivative liability   9  
Other 5,421 7,656  
Total deferred tax assets 149,733 275,710  
Valuation allowance (106,702) (193,253) $ (186,491)
Total deferred tax assets net of valuation allowance 43,031 82,457  
Deferred tax liabilities:      
Intangible assets (77,876) (83,930)  
Convertible debt (9,190) (12,842)  
Depreciation (167) 400  
Other   (15)  
Total deferred tax liabilities (87,233) (96,387)  
Net deferred tax liability $ (44,202) $ (13,930)  
v3.22.4
Income Taxes - Schedule of Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Reconciliation of unrecognized tax benefits    
Beginning of period balance $ 6,370 $ 7,093
Decreases for tax positions taken during a prior period (133) (723)
Ending period balance $ 6,237 $ 6,370
v3.22.4
Income Taxes - Reconciliation of Beginning and Ending Amounts of Valuation Allowances (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Income Tax Disclosure [Abstract]    
Valuation allowance for deferred tax assets, Balance at Beginning of Period $ 193,253 $ 186,491
Valuation allowance for deferred tax assets, Additions 233 10,028
Valuation allowance for deferred tax assets, Deductions (86,784) (3,266)
Valuation allowance for deferred tax assets, Balance at End of Period $ 106,702 $ 193,253
v3.22.4
Loss Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Basic and diluted    
Net loss $ (65,916) $ (103,954)
Weighted average common shares outstanding used in computing net loss per share—basic 19,707 10,621
Weighted average common shares outstanding used in computing net loss per share—diluted 19,707 10,621
Net loss per share—basic $ (3.34) $ (9.79)
Net loss per share—diluted $ (3.34) $ (9.79)
v3.22.4
Loss Per Share - Schedule of Antidilutive Securities Excluded from Calculation of Net Income Per Diluted Share (Details) - shares
shares in Thousands
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Stock options and restricted common shares    
Antidilutive Securities    
Anti-dilutive securities excluded from computation of earnings per share (in shares) 1,199 996
v3.22.4
Employee Benefit Plan - Additional Information (Details) - 401(k) plan - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Defined Contribution Plan Disclosure [Line Items]    
Percentage of employee earnings eligible for additional company contribution 6.00%  
Additional company contribution for each dollar of employee contribution (as a percent) 50.00%  
Company expense related to the defined contribution plan $ 0.8 $ 0.9
v3.22.4
Subsequent Events - Additional Information (Details) - USD ($)
 1 Months Ended 12 Months Ended
Jan. 31, 2023
Oct. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Mar. 13, 2023
Maximum [Member]          
Subsequent Event [Line Items]          
Capital expenditure provision in 2023       $ 1,000,000  
Capital expenditure provision in 2024       1,000,000  
Catalent          
Subsequent Event [Line Items]          
Purchase commitments in 2023       10,500,000  
Purchase commitments in 2024       $ 15,500,000  
Purchase commitment description       The New MSA, unless earlier terminated, will continue until December 31, 2030, and will be automatically extended for successive two-year periods unless either the Company or Catalent provides the other with at least 18-months’ prior written notice of non-renewal. Either party may terminate the New MSA by written notice under certain circumstances, including material breach (subject to specified cure periods) or insolvency. The Company may also terminate the New MSA upon specified regulatory events and for convenience upon 180 days’ prior written notice.  
Contribution of fund agreed       $ 2,000,000  
Catalent | Inbrija          
Subsequent Event [Line Items]          
Purchase commitments in 2023       10,500,000  
Purchase commitments in 2024       $ 15,500,000  
Catalent | Forecast [Member]          
Subsequent Event [Line Items]          
Contribution of fund agreed     $ 2,000,000    
Silicon Valley Bank          
Subsequent Event [Line Items]          
Percentage of unrestricted cash and cash equivalents       22.00%  
Silicon Valley Bank | Subsequent event          
Subsequent Event [Line Items]          
Deposit         $ 8,300,000
Alkermes          
Subsequent Event [Line Items]          
Licensing royalties, awarded amount   $ 18,300,000      
Alkermes | Subsequent event          
Subsequent Event [Line Items]          
Licensing royalties, awarded amount $ 18,300,000        
Remaining illegal royalties with pre- and post-award interest and costs $ 65,000,000