Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2019	Nov. 09, 2019
Document and Entity Information
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Entity Registrant Name	Zyla Life Sciences
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		9,360,968
Entity Central Index Key	0001586105
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	8 Months Ended
Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 18,594	$ 35,323
Marketable securities, available for sale		4,988
Accounts receivable, net	26,578	8,006
Inventory	9,538	2,639
Prepaid expenses and other current assets	1,571	2,715
Other receivables		846
Total current assets	56,281	54,517
Intangible assets, net	113,980	4,281
Restricted cash	400	400
Property and equipment, net	3,513	1,059
Right of use assets, net	2,885
Goodwill	58,747
Deposits and other assets	3,242	1,676
Total assets	239,048	61,933
Current liabilities:
Accounts payable	15,807	8,561
Accrued expenses	49,625	24,584
Debt - current, net	6,990
Acquisition-related contingent consideration	2,700
Other current liabilities	976
Total current liabilities	76,098	33,145
Debt - non-current portion, net	92,630
Acquisition-related contingent consideration	15,600
Deferred income tax liability	23	24
Credit agreement	3,965	0
Other liabilities	2,329	536
Total liabilities not subject to compromise	190,645	33,705
Liabilities subject to compromise		139,588
Stockholders' equity (deficit):
Common stock	9	55
Additional paid-in capital	88,817	276,569
Accumulated other comprehensive (loss) income	(7)	869
Accumulated deficit	(40,416)	(388,853)
Total stockholders' equity (deficit)	48,403	(111,360)
Total liabilities and stockholders’ equity	$ 239,048	$ 61,933
Financial Designation, Predecessor and Successor [Fixed List]	Successor

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2019	Feb. 01, 2019	Jan. 31, 2019	Dec. 31, 2018
Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.001			$ 0.001
Common stock, authorized	100,000,000	100,000,000	275,000,000	275,000,000
Common stock, issued	9,360,968		4,774,093	56,547,101
Common stock, outstanding	9,360,968			56,547,101

Consolidated Statements of Operations - USD ($)	1 Months Ended	2 Months Ended	3 Months Ended		6 Months Ended	8 Months Ended	9 Months Ended
Consolidated Statements of Operations - USD ($)	Jan. 31, 2019	Mar. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Revenue
Revenue	$ 1,775,000		$ 22,386,000	$ 8,153,000		$ 60,230,000	$ 21,857,000
Type of Revenue		us-gaap:ProductMember	us-gaap:ProductMember		us-gaap:ProductMember
Costs and Expenses
Cost of sales (excluding amortization of product rights)	554,000		$ 10,394,000	1,773,000		37,027,000	5,553,000
Type of cost of sales		us-gaap:ProductMember	us-gaap:ProductMember		us-gaap:ProductMember
Amortization of product rights	171,000		$ 3,497,000	526,000		9,326,000	1,594,000
General and administrative	5,413,000		6,044,000	5,556,000		16,827,000	19,322,000
Sales and marketing	2,773,000		9,316,000	7,932,000		23,582,000	26,006,000
Research and development	186,000		3,000	956,000		13,000	3,258,000
Restructuring and other charges	799,000		0	13,864,000		648,000	13,864,000
Change in fair value of contingent consideration payable			795,000			3,695,000
Total costs and expenses	9,896,000		30,049,000	30,607,000		91,118,000	69,597,000
Loss from operations	(8,121,000)		(7,663,000)	(22,454,000)		(30,888,000)	(47,740,000)
Other (income) expense:
Change in fair value of warrant and derivative liability				(3,986,000)			(12,292,000)
Interest expense (income), net	(52,000)		3,749,000	32,891,000		9,577,000	40,251,000
Other (gain) loss	(140,000)		(1,122,000)	(132,000)		(1,258,000)	(158,000)
Loss on foreign currency exchange							(1,000)
Total other expense (income)	(192,000)		2,627,000	28,773,000		8,319,000	27,800,000
Reorganization items	(115,169,000)		0	0		1,209,000	0
Net (loss) income	$ 107,240,000	$ (10,483,000)	$ (10,290,000)	$ (51,227,000)		$ (40,416,000)	$ (75,540,000)
Per share information:
Net (loss) income per share of common stock, basic and diluted (in dollars per share)	$ 1.90		$ (0.72)	$ (0.93)		$ (2.82)	$ (1.45)
Weighted-average shares outstanding, basic and diluted (in shares)	56,547,101		14,333,332	55,192,542		14,333,332	51,944,358

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		8 Months Ended	9 Months Ended
	Jan. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Consolidated Statements of Comprehensive Loss
Net (loss) income	$ 107,240	$ (10,290)	$ (51,227)	$ (40,416)	$ (75,540)
Other comprehensive (loss) income:
Unrealized loss on available for sale securities			7		36
Foreign currency translation adjustments		3	(21)	(7)	(132)
Comprehensive (loss) income	$ 107,240	$ (10,287)	$ (51,241)	$ (40,423)	$ (75,636)

Consolidated Statements of Changes in Stockholders' (Deficit) Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Comprehensive Income	Total
Balance at beginning of the period at Dec. 31, 2017	$ 46	$ 254,871	$ (295,300)	$ 1,008	$ (39,375)
Balance at beginning of the period (in shares) at Dec. 31, 2017	45,939,663
Increase (Decrease) in Stockholders' Deficit
Deferred tax liability		(920)			(920)
Issuance of common stock, net of costs	$ 6	4,151			4,157
Issuance of common stock, net of costs (in shares)	5,941,538
Exchange of convertible debt and issuance of warrants	$ 1	12,497			12,498
Exchange of convertible debt and issuance of warrants (in shares)	1,000,000
Stock-based compensation expense		952			952
Unrealized loss on available for sale securities				(30)	(30)
Foreign currency translation adjustment				124	124
Net (loss) income			(12,353)		(12,353)
Balance at end of the period at Mar. 31, 2018	$ 53	271,551	(305,752)	1,102	(33,046)
Balance at end of the period (in shares) at Mar. 31, 2018	52,881,201
Balance at beginning of the period at Dec. 31, 2017	$ 46	254,871	(295,300)	1,008	(39,375)
Balance at beginning of the period (in shares) at Dec. 31, 2017	45,939,663
Increase (Decrease) in Stockholders' Deficit
Unrealized loss on available for sale securities					36
Foreign currency translation adjustment					(132)
Net (loss) income					(75,540)
Balance at end of the period at Sep. 30, 2018	$ 53	275,680	(368,940)	912	(92,295)
Balance at end of the period (in shares) at Sep. 30, 2018	56,772,101
Increase (Decrease) in Stockholders' Deficit
Cumulative adjustment - ASU 2016-09 \| ASU 2014-09			1,901		1,901
Balance at beginning of the period at Mar. 31, 2018	$ 53	271,551	(305,752)	1,102	(33,046)
Balance at beginning of the period (in shares) at Mar. 31, 2018	52,881,201
Increase (Decrease) in Stockholders' Deficit
Restricted shares of common stock issued (in shares)	1,500,000
Deferred tax liability		(60)			(60)
Issuance of common stock, net of costs		886			886
Issuance of common stock, net of costs (in shares)	1,917,172
Stock-based compensation expense		1,002			1,002
Unrealized loss on available for sale securities				59	59
Foreign currency translation adjustment				(235)	(235)
Net (loss) income			(11,961)		(11,961)
Balance at end of the period at Jun. 30, 2018	$ 53	273,379	(317,713)	926	(43,355)
Balance at end of the period (in shares) at Jun. 30, 2018	56,298,373
Increase (Decrease) in Stockholders' Deficit
Deferred tax liability		980			980
Issuance of common stock, net of costs		181			181
Issuance of common stock, net of costs (in shares)	473,728
Stock-based compensation expense		1,140			1,140
Unrealized loss on available for sale securities				7	7
Foreign currency translation adjustment				(21)	(21)
Net (loss) income			(51,227)		(51,227)
Balance at end of the period at Sep. 30, 2018	$ 53	275,680	(368,940)	912	(92,295)
Balance at end of the period (in shares) at Sep. 30, 2018	56,772,101
Balance at beginning of the period at Dec. 31, 2018	$ 55	276,569	(388,853)	869	(111,360)
Balance at beginning of the period (in shares) at Dec. 31, 2018	56,547,101
Increase (Decrease) in Stockholders' Deficit
Stock-based compensation expense		4,125			4,125
Net (loss) income			107,240		107,240
Cancellation of Predecessor common stock and stock-based compensation	$ (55)	(280,694)			(280,749)
Cancellation of Predecessor common stock and stock-based compensation (in shares)	(56,547,101)
Elimination of Predecessor accumulated deficit and accumulated other comprehensive income			281,613	(869)	280,744
Common stock issued for settlement of predecessor debt	$ 5	31,000			31,005
Common stock issued for settlement of predecessor debt (in shares)	4,774,093
Common stock issued for asset purchase	$ 4	29,784			29,788
Common stock issued for asset purchase (in shares)	4,586,875
Warrants issued for settlement of predecessor debt		14,303			14,303
Warrants issued for asset purchase		11,841			11,841
Balance at end of the period at Jan. 31, 2019	$ 9	86,928			86,937
Balance at end of the period (in shares) at Jan. 31, 2019	9,360,968
Increase (Decrease) in Stockholders' Deficit
Stock-based compensation expense		60			60
Unrealized loss on available for sale securities				(1)	(1)
Foreign currency translation adjustment				(8)	(8)
Net (loss) income			(10,483)		(10,483)
Balance at end of the period at Mar. 31, 2019	$ 9	86,988	(10,483)	(9)	76,505
Balance at end of the period (in shares) at Mar. 31, 2019	9,360,968
Balance at beginning of the period at Jan. 31, 2019	$ 9	86,928			86,937
Balance at beginning of the period (in shares) at Jan. 31, 2019	9,360,968
Increase (Decrease) in Stockholders' Deficit
Foreign currency translation adjustment					(7)
Net (loss) income					(40,416)
Balance at end of the period at Sep. 30, 2019	$ 9	88,817	(40,416)	(7)	48,403
Balance at end of the period (in shares) at Sep. 30, 2019	9,360,968
Balance at beginning of the period at Mar. 31, 2019	$ 9	86,988	(10,483)	(9)	76,505
Balance at beginning of the period (in shares) at Mar. 31, 2019	9,360,968
Increase (Decrease) in Stockholders' Deficit
Stock-based compensation expense		818			818
Foreign currency translation adjustment				(1)	(1)
Net (loss) income			(19,643)		(19,643)
Balance at end of the period at Jun. 30, 2019	$ 9	87,806	(30,126)	(10)	57,679
Balance at end of the period (in shares) at Jun. 30, 2019	9,360,968
Increase (Decrease) in Stockholders' Deficit
Stock-based compensation expense		1,011			1,011
Foreign currency translation adjustment				3	3
Net (loss) income			(10,290)		(10,290)
Balance at end of the period at Sep. 30, 2019	$ 9	$ 88,817	$ (40,416)	$ (7)	$ 48,403
Balance at end of the period (in shares) at Sep. 30, 2019	9,360,968

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	1 Months Ended	8 Months Ended	9 Months Ended
	Jan. 31, 2019	Sep. 30, 2019	Sep. 30, 2018
Operating activities:
Net (loss) income	$ 107,240	$ (40,416)	$ (75,540)
Adjustment to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	204	9,876	3,582
Non-cash impairment of property and equipment			6,886
Non-cash reorganization items	(121,144)
Change in fair value of warrant and derivative liability			(12,292)
Stock-based compensation expense	4,125	1,889	3,094
Non-cash interest and amortization of debt discount	(9)	5,156	31,043
Accretion of discount on marketable securities	(5)	(3)	(185)
Right of Use Assets		(1,031)
Change in fair value of contingent consideration		3,695
Changes in assets and liabilities:
Accounts receivable	3,865	(22,437)	(7,092)
Inventory	340	24,300	29
Prepaid expenses	(219)	(2,376)	(1,821)
Other receivables	711	128	(130)
Deposits and other assets	1	(1,570)	703
Accounts payable	103	7,470	(3,453)
Accrued expenses	5,172	2,854	5,884
Other current liabilities		(249)
Other liabilities		970	(137)
Net cash (used in) provided by operating activities	822	(6,992)	(45,787)
Investing activities:
Payments for purchase of property and equipment		(24)	(9)
Purchases of investments			(23,465)
Sales of investments		2,497
Maturity of investments		2,500	67,675
Net cash provided by investing activities		4,973	44,201
Financing activities:
Net proceeds from issuance of common stock			5,216
Payments on borrowings	(19,104)	(232)
Proceeds from credit agreement		3,770
Royalty payments in connection with the 13% Notes			(421)
Net cash provided by (used in) financing activities	(19,104)	3,538	4,795
Effect of foreign currency translation on cash and cash equivalents	6	28	(51)
Net increase (decrease) cash, cash equivalents and restricted cash	(18,276)	1,547	3,158
Cash, cash equivalents and restricted cash at beginning of period	35,723	17,447	31,490
Cash, cash equivalents and restricted cash at end of period	$ 17,447	18,994	34,648
Supplemental disclosures of cash flow information:
Cash interest payments		$ 1,735	11,893
Non-cash financing activities:
Reclassification to additional paid-in capital of derivative liability			$ 12,497

Consolidated Statements of Cash Flows (Parenthetical)	Sep. 30, 2019	Jan. 31, 2017
13% Notes
Interest rate (as a percent)	13.00%	13.00%

Organization and Description of the Business	9 Months Ended
Organization and Description of the Business	Sep. 30, 2019
Organization and Description of the Business
Organization and Description of the Business	1. Organization and Description of the Business Interim Financial Statements The consolidated financial statements of Zyla Life Sciences and its subsidiaries (“Zyla” or the “Company”) as of September 30, 2019 (Successor), the three months ended September 30, 2019 (Successor) and for the periods from February 1, 2019 through September 30, 2019 (Successor), January 1, 2019 through January 31, 2019 (Predecessor) and the three and nine months ended September 30, 2018 (Predecessor) are unaudited and reflect all adjustments (consisting only of normal recurring adjustments), which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The Company’s Consolidated Balance Sheet as of December 31, 2018 (Predecessor) has been derived from the audited financial statements as of that date contained in our Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Annual Report on Form 10-K”). The Company’s consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, contained in the Company’s 2018 Annual Report on Form 10-K, though, as described below, such prior financial statements will not be comparable to the interim financial statements due to the adoption of fresh start accounting on January 31, 2019. For additional information, see Note 3- Fresh Start Accounting. The Company’s Consolidated Statements of Operations for the period from February 1, 2019 through September 30, 2019 (Successor) are not necessarily indicative of future financial results. Organization and Business Overview Zyla Life Sciences is a commercial-stage life sciences company focused on developing and marketing important treatments for patients and healthcare providers. The Company currently has a portfolio of innovative treatments for pain and inflammation. Zyla has seven commercially available products: SPRIX® (ketorolac tromethamine) Nasal Spray, ZORVOLEX® (diclofenac), INDOCIN® (indomethacin) suppositories, VIVLODEX® (meloxicam), TIVORBEX® (indomethacin), INDOCIN® oral suspension and OXAYDO® (oxycodone HCI, USP) tablets for oral use only —CII. VIVLODEX, TIVORBEX and ZORVOLEX are SOLUMATRIX® Technology non-steroidal anti-inflammatory products. To augment its current product portfolio, the Company is seeking to acquire additional product candidates or approved products to develop and/or market. The Company plans to grow its business through its commercial revenue and potential business development opportunities. Emergence from Voluntary Reorganization Under Chapter 11 Proceedings Chapter 11 Cases On October 30, 2018, the Company entered into a definitive asset purchase agreement (the “Purchase Agreement”) to acquire the SOLUMATRIX® products and INDOCIN® products and one development product from Iroko Pharmaceuticals, Inc. and its subsidiaries (collectively, “Iroko”). To facilitate the transactions contemplated by the Purchase Agreement (the “Iroko Products Acquisition”) and to reorganize its financial structure, the Company and its wholly-owned subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) and a related Joint Plan of Reorganization (“the Plan”) on October 30, 2018. The Company requested that the Chapter 11 cases (the “Chapter 11 Cases”) be jointly administered for procedural purposes only under the caption “In re Egalet Corporation, et al., Case No. 18-12439”. Upon filing, the Company continued to operate its business as a “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company continued ordinary course operations substantially uninterrupted during the Chapter 11 Cases and sought approval from the Bankruptcy Court for relief under certain “first day” motions authorizing the Company to continue to conduct its business in the ordinary course. On January 14, 2019, the Bankruptcy Court entered the Confirmation Order confirming the Plan under Chapter 11 of the Bankruptcy Code. On January 31, 2019 (the “Effective Date”), and substantially concurrent with the consummation of the acquisition of the Iroko products named below pursuant to the Purchase Agreement (the “Iroko Products Acquisition”), the Plan became effective. Liquidity and Substantial Doubt in Going Concern Substantial Doubt Regarding Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred recurring operating losses since inception. As of September 30, 2019, the Company had an accumulated deficit of $40.4 million and a working capital deficit of $19.8 million. Even though the Company emerged from bankruptcy, it continues to have significant indebtedness and its ability to continue as a going concern is contingent upon the successful integration of the Iroko Products Acquisition, increasing its revenue, managing its expenses and complying with the terms of its new debt agreements. Refer to Note 9—Debt for additional details of these debt agreements. These factors, in combination with others described above, resulted in the conclusion that there is substantial doubt about the ability of the Company to continue as a going concern for the one-year period after the date that these financial statements are issued. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Summary of Significant Accounting Policies and Basis of Accounting	9 Months Ended
	Sep. 30, 2019
Summary of Significant Accounting Policies and Basis of Accounting
Summary of Significant Accounting Policies and Basis of Accounting	2. Summary of Significant Accounting Policies and Basis of Accounting Basis of Accounting The unaudited consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Certain information and footnotes normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q. The Company’s consolidation policy requires the consolidation of entities where a controlling financial interest is held. All intercompany balances and transactions have been eliminated in consolidation. Upon emergence from bankruptcy, the Company adopted fresh start accounting in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations, which resulted in the Company becoming a new entity for financial reporting purposes on February 1, 2019. As a result of the adoption of fresh start accounting, the Company’s unaudited consolidated financial statements subsequent to January 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019, any other interim periods or any future year or period. See Note 3 – Fresh Start Accounting for further details on the impact of fresh start accounting on the Company’s unaudited consolidated financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2018 filed on March 29, 2019 with the SEC. References to "Successor" or "Successor Company" relate to the financial position and results of operations of the reorganized Company subsequent to January 31, 2019. References to "Predecessor" or "Predecessor Company" relate to the financial position and results of operations of the Company prior to, and including, January 31, 2019. The Company’s significant accounting policies are described in Note 2 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K. Since the date of those financial statements, new accounting policies are noted below. Goodwill Goodwill is calculated as the excess of the reorganization equity value over the fair value of tangible and identifiable intangible assets pursuant to ASC 852 Reorganizations. Goodwill is not amortized but is tested for impairment at the reporting unit level at least annually or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts. A reporting unit is the same as, or one level below, an operating segment. Our operations are currently comprised of a single, entity wide reporting unit. The Company determined that no events have occurred or circumstances changed during the period from February 1, 2019 through September 30, 2019 (Successor) and the period from January 1, 2019 through January 31, 2019 (Predecessor) that would more likely than not reduce the fair value of any of the Company’s reporting units below their respective carrying amounts. However, if conditions deteriorate or there is a change in the business, it may be necessary to record impairment charges in the future. Acquisition-related contingent consideration Pursuant to the Iroko Products Acquisition, the Company has obligations relating to contingent payment consideration for future royalty obligations to Iroko based upon annual INDOCIN product net sales over $20.0 million. The Company recorded the acquisition-date fair value of these contingent liabilities, based on the likelihood of contingent earn-out payments. The earn-out payments are subsequently remeasured to fair value each reporting date. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in the Company’s Consolidated Statements of Operations. The royalty term commenced on the Effective Date and ends on the tenth anniversary of the Effective Date, January 31, 2029. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board FASB issued ASU No. 2016-02 Leases (ASC 842). In July 2018, the FASB issued ASU No. 2018-10, "Codification Improvements to Topic 842, Leases" (ASU 2018-10), which provides narrow amendments to clarify how to apply certain aspects of the new lease standard, and ASU No. 2018-11, "Leases (Topic 842)-Targeted Improvements" (ASU 2018-11), which addressed implementation issues related to the new lease standard. These and certain other lease-related ASUs have generally been codified in ASC 842. ASC 842 supersedes the lease accounting requirements in Accounting Standards Codification Topic 840, Leases (ASC 840). ASC 842 establishes a right-of-use model that requires a lessee to record a right-of-use ("ROU") asset and a lease liability on the balance sheet for all leases. Under ASC 842, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The standard also requires disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The Company adopted ASC 842 using the modified retrospective transition approach as of the effective date, which allows the Company to not adjust the comparative periods presented. The Company has elected to adopt the package of transition practical expedients and, therefore, has not reassessed whether existing or expired contracts contain a lease, the lease classification for existing or expired leases or the accounting for initial direct costs that were previously capitalized. The Company did not elect the practical expedient to use hindsight for leases existing at the adoption date. Further, the Company does not expect the amendments in ASU 2018-01: Land Easement Practical Expedient to have an effect on its financial position because it did not enter into land easement arrangements. The Company has elected, as an accounting policy, to not recognize ROU assets and lease liabilities for all short-term leases that have a lease term of 12 months or less. Upon adoption, the Predecessor Company recorded a lease liability of $2.5 million with a corresponding ROU asset of $1.9 million for its operating leases. As of the adoption date, the Company had a $0.6 million deferred rent liability which was reversed. The adoption of ASC 842 did not have a material impact on the Company’s Consolidated Statements of Operations or Consolidated Statements of Cash Flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the incurred loss impairment methodology for measuring and recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 will be effective for the Company as of January 1, 2020. The Company does not expect adoption of this ASU to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) which modifies the disclosure requirements of fair value measurements in Topic 820, Fair Value Measurement. For public companies the ASU removes disclosure requirements for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation process for Level 3 fair value measurements. The ASU modifies the disclosure requirements for investments in certain entities that calculate net asset value and clarifies that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The ASU adds the disclosure requirement for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2019 including interim periods within that fiscal year. Early adoption is permitted. The Company does not plan to early adopt this ASU and the Company does not believe there will be a material impact to the financial statements as a result of adopting this ASU.

Fresh Start Accounting

9 Months Ended

Sep. 30, 2019

Fresh Start Accounting

Fresh Start Accounting

3. Fresh Start Accounting

Upon emergence from bankruptcy, the Company adopted fresh start accounting as (i) the reorganization value of the assets of the Successor Company immediately before the date of confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims and (ii) the holders of the Predecessor Company’s voting shares immediately before confirmation of the Plan received less than 50 percent of the voting shares of the emerging entity.

GAAP requires the adoption of fresh start accounting on the later of (i) the Plan confirmation date, or (ii) when all material conditions precedent to the Plan’s becoming effective are resolved, which occurred on January 31, 2019. Accordingly, the Company selected January 31, 2019 as the fresh start reporting date. Upon the application of fresh start accounting, the Company allocated the reorganization value to its individual assets based on their estimated fair values. Reorganization value represents the fair value of the Successor Company’s assets before considering liabilities. The excess reorganization value over the fair value of identified tangible and intangible assets is reported as goodwill.

The Bankruptcy Court confirmed the Plan based upon an estimated enterprise value of the Company between $162 million and $200 million, which was estimated using various valuation methods, including (i) comparable public company analysis, a method to estimate the value of a company relative to other publicly traded companies with similar operations and financial characteristics; (ii) discounted cash flow analysis, a calculation of the present value of the future cash flows to be generated by the asset or business based on its projection, and (iii) precedent transaction analysis, a method to estimate the value of a company by examining comparable public merger and acquisition transactions. Based upon a reevaluation of relevant factors used in determining the range of enterprise value and updated expected cash flow projections, the Company concluded the enterprise value, or fair value, was $196.6 million.

The basis of the discounted cash flow analysis used in developing the enterprise value was based on Company prepared projections that included a variety of estimates and assumptions. While the Company considers such estimates and assumptions reasonable, they are inherently subject to significant business, economic and competitive uncertainties, many of which are beyond the Company’s control and, therefore, may not be realized. Changes in these estimates and assumptions may have had a significant effect on the determination of the Company’s enterprise value. The assumptions used in the calculations for the discounted cash flow analysis, which had the most significant effect on our estimated enterprise value, included the following: forecasted revenue, costs and free cash flows through 2023, discount rate of 15.1 %. A terminal value of $217.3 million was established, which was determined using a perpetual long-term growth rate of 3%.

The four-column consolidated statement of financial position as of January 31, 2019, included herein, applies effects of the Plan and fresh start accounting to the carrying values and classifications of assets or liabilities. Upon adoption of fresh start accounting, the recorded amounts of assets and liabilities were adjusted to reflect their estimated fair values. Accordingly, the reported historical financial statements of the Predecessor Company prior to the adoption of fresh start accounting for periods ended on or prior to January 31, 2019 are not comparable to those of the Successor Company.

In applying fresh start accounting, the Company followed these principles:

·

The reorganization value, which represents the concluded enterprise value plus excess cash and cash equivalents and non-interesting bearing liabilities of the entity, was allocated to the entity’s reporting units in conformity with ASC 805, Business Combinations. The reorganization value exceeded the sum of the fair value assigned to assets and liabilities. This excess was recorded as Successor Company goodwill as of January 31, 2019.

·

Each asset and liability existing as of the fresh start accounting date, other than deferred taxes, has been stated at the fair value, and determined at appropriate risk adjusted interest rates.

·

Deferred taxes were reported in conformity with applicable income tax accounting standards, principally ASC 740, Income Taxes.

The following four-column consolidated statement of financial position table identifies the adjustments recorded to the Predecessor Company’s January 31, 2019 Consolidated Balance Sheets as a result of implementing the Plan and applying fresh start accounting:



			Plan Effects			Fresh Start
(in thousands)	Predecessor		Adjustments			Adjustments			Successor
Assets
Current assets
Cash and cash equivalents	$	36,785	$	(19,738)	(a)	$	—		$	17,047
Marketable securities, available for sale		4,994		—			—			4,994
Accounts receivable		4,141		—			—			4,141
Inventory		2,299		28,364	(b)		3,175	(h)		33,838
Prepaid expenses and other current assets		2,497		1,446	(b)		—			3,943
Other receivables		133		—			—			133
Total current assets		50,849		10,072			3,175			64,096
Intangible assets, net		4,109		90,106	(b)		29,091	(i)		123,306
Restricted cash		400		—			—			400
Property and equipment, net		1,027		3,047	(b)		—			4,074
Right of use asset, net		1,854		—			—			1,854
Goodwill		—		—			58,747	(j)		58,747
Deposits and other assets		1,676		—			—			1,676
Total assets	$	59,915	$	103,225		$	91,013		$	254,153
Liabilities and stockholders’ (deficit) equity
Current liabilities:
Accounts payable		9,839		(1,500)	(a)		—			8,339
Accrued expenses		26,617		20,183	(c)		—			46,800
Deferred revenue		52		—			(52)	(k)		—
Debt - current		—		1,492	(d)		—			1,492
Acquisition-related contingent consideration		—		1,200	(d)		—			1,200
Other current liabilities		1,030		—			—			1,030
Total current liabilities		37,538		21,375			(52)			58,861
Debt - non-current portion, net		—		93,371	(d)		—			93,371
Acquisition-related contingent consideration		—		13,600	(d)		—			13,600
Deferred income tax liabilities		24		—			—			24
Other liabilities		1,463		—			(103)	(k)		1,360
Total liabilities not subject to compromise		39,025		128,346			(155)			167,216

Liabilities subject to compromise		138,884		(138,884)	(e)		—			—

Stockholders’ (deficit) equity:
Common stock		55		(46)	(f)		—			9
Additional paid in capital		276,880		(189,952)	(f)		—			86,928
Other comprehensive income (loss)		866		—			(866)	(l)		—
Accumulated deficit		(395,795)		303,761	(g)		92,034	(l)		—
Total stockholders’ (deficit) equity		(117,994)		113,763			91,168			86,937
Total liabilities and shareholders’ (deficit) equity	$	59,915	$	103,225		$	91,013		$	254,153

Effects of Plan Adjustments

a)

Reflects cash distribution of $18.2 million and reimbursement to Iroko for transaction expenses incurred on the acquisition of $1.5 million.

b)

Reflects preliminary purchase accounting for Iroko Products Acquisition which was treated as a business combination for accounting purposes. Assets acquired and liabilities assumed are recorded at fair value on the acquisition date.



Iroko Purchase Price Allocation	(in thousands)
Iroko Note	$	45,000
Iroko Equity Value in Reorganization		41,630
Fair Value of Contingent Consideration		14,800
Iroko Promissory Note		4,500
Total Iroko Purchase Price	$	105,930

Identifiable Assets / (Liabilities)
Inventory	$	28,364
Prepaid expenses		1,446
Fixed Assets		3,047
Intangible — Indocin		90,106
Product Liability		(17,033)
Total Iroko Purchase Price	$	105,930
Goodwill attributable to Iroko acquisition	$	—

c)

Adjustments to accrued expense reflect i) $2.15 million success fees to be paid after the Effective Date upon the completion of the Iroko Products Acquisition and Chapter 11 proceedings, ii) $1.0 million transaction fees to be paid after the Effective Date for expenses Iroko incurred in connection with the acquisition, and iii) $17.03 million product related liabilities such as rebate, coupon payment, etc. assumed from Iroko.

d)

Reflects obligations entered into upon emergence to finance transactions effectuated by the Plan: i) $90.3 million in 13% Notes, net of discount for interest-free period, and a royalty rights agreement giving the right to receive payment equal to 1.5% of net sales on all reorganized entity products, ii) $4.5 million pursuant to the Interim Promissory Note, and iii) $14.8 million in contingent consideration. Specifically, the contingent consideration represents the fair value of future royalty payments due to Iroko in the event Indocin net sales exceed $20.0 million in any fiscal year between the Effective Date and January 31, 2029 (“Indocin Royalty”). The current portion of the 13% Notes, Interim Promissory Note, and Indocin Royalty is $1.1 million, $0.4 million, and $1.2 million, respectively.

e)

The adjustment to liabilities subject to compromise relates to the extinguishment of the former 13% Notes and associated royalty rights, the 5.50% and 6.50% Notes, and rejected contracts. The former 13% Notes were settled with $50.0 million in aggregate principal amount of the 13% Notes newly issued common stock of the Successor Company representing approximately 19.38% of the common stock then outstanding, and $20.0 million in cash equal to the sum of adequate protection payments of $1.8 million and cash distribution of $18.2 million. The 5.50% and 6.50% Notes were settled with newly issued common stock of the Successor Company representing approximately 31.62% of the common stock then outstanding. Contracts rejected in the Chapter 11 cases did not receive any consideration.

f)

Pursuant to the Plan, the Company’s predecessor common stock was cancelled, and new common stock and warrants were issued. The adjustment eliminated the Predecessor Company’s common stock, additional paid-in capital and recorded the Successor Company’s new $0.001 par value common stock, warrants and additional paid-in capital. The Company issued 9,360,968 shares of new common stock and additional paid-in capital of $60.8 million and $26.1 million of warrants. The warrants were valued using the Black Scholes model. Significant assumptions used in determining the fair value of such warrants at issuance include an assumed share price volatility of 60%, a risk-free rate of return of 2.43% with a 5 year term, and marketability discount between 7% and 20% for the lock-up periods.

g)

This adjustment reflects the net effect of the transaction related to the consummation of the Plan on Predecessor’s accumulated deficit. The table below provides a summary of the adjustments:


Liabilities subject to compromise	(in thousands)
13% Senior Secured Debt	$	85,438
5.50% Convertible Notes		24,650
6.50% Convertible Notes		23,888
Accrued interest		2,464
Accrued royalty rights ("Existing Senior Secured Royalty Rights")		2,119
Accrued expenses		325
Liabilities subject to compromise	$	138,884

Consideration given pursuant to the Plan:
Issuance of warrants	$	(14,303)
Issuance of new common stock		(31,004)
Issuance of new Senior Secured Notes		(45,363)
Cash payment		(18,238)
Total consideration given pursuant to the Plan	$	(108,908)

Gain on extinguishment of prepetition liabilities		29,976

Other adjustments to accumulated deficit:
Success fees		(2,150)
Reimbursement to Iroko of acquisition expense		(1,000)
Cancellation of Predecessor stock-based compensation expense		(3,814)
Tax related expenses on gain on extinguishment of prepetition liabilities		—
Total other adjustments		(6,964)

Extinguishment of Predecessor Common Stock and Additional-paid-in-capital		280,749
Total adjustments to accumulated deficit:	$	303,761

Fresh Start Adjustments

h)

A $3.2 million adjustment was recorded to adjust the Company’s legacy inventory, excluding inventory assumed from Iroko, to fair value. The Company obtained an independent third-party valuation specialist’s assistance in the determination of the fair values of inventory. The inventory valuation included an analysis of net realizable value of the work in progress inventory and finished goods. Finished goods are valued using the comparative sales method as a function of the estimated selling price less the sum of any cost to complete, costs of disposal, holding costs, and a reasonable profit allowance. Carrying value of raw materials and packaging is assumed to represent a reasonable proxy for fair value.

i)

Reflects fresh start adjustments recorded to adjust intangible assets related to the Company’s legacy products, SPRIX and OXAYDO, to fair value. The Company obtained independent-third party valuation specialist’s assistance in determination of the fair values of intangibles. SPRIX and OXAYDO intellectual property values are valued using the multi period excess earnings method under the income approach. The multi-period excess earnings method measures economic benefit indirectly by calculating the income attributable to an asset after appropriate returns are paid to complementary assets used in conjunction with the subject asset to produce contributory asset charges. Key components of the excess earnings methods include revenue, adjusted operating margin, charges for use of other assets, and discount rate.

j)

Adjustment to record the reorganization value of assets in excess of amounts allocated to identifiable tangible and intangible assets, also referred to as Successor Company goodwill. Estimated business enterprise value is developed for the combined company upon emergence from bankruptcy and therefore allocated to both identified tangible and intangible assets from the Predecessor Company and assumed from acquisition of Iroko.


	(in thousands)
Estimated business enterprise value	$	196,600
Add: Fair value of liabilities excluded from enterprise value		57,552
Less: Fair value of tangible assets		(72,099)
Less: Fair value of identified intangible assets		(123,306)
Reorganization value of assets in excess of amounts allocated to identified tangible and intangible assets (Successor company goodwill)	$	58,747

Total Successor Goodwill	$	58,747

k)

Adjustments to eliminate deferred revenue and related product advance.

l)

The Predecessor Company’s accumulated deficit and accumulated other comprehensive income was eliminated in conjunction with the adoption of fresh start accounting pursuant to ASC 852, Reorganization. The Predecessor Company recognized a $91.2 million gain related to the fresh start accounting adjustments related for revaluation of assets and liabilities as follows:


	(in thousands)
Establish Successor goodwill attributable to emergence from Chapter 11	$	58,747
Intangible fair value adjustments		29,091
Inventory fair value adjustments		3,175
Deferred revenue and product advance adjustments		155
Gain on fresh start adjustment for revaluation of assets and liabilities		91,168

Eliminate Predecessor Company Other comprehensive income		866
Total adjustment to stockholders' deficit	$	92,034

Revenue From Contracts with Customers

9 Months Ended

Sep. 30, 2019

Revenue From Contracts with Customers

Revenue From Contracts with Customers

4. Revenue From Contracts with Customers

Revenue Recognition

Under ASC 606, revenue is recognized when, or as, performance obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to customers. To recognize revenue pursuant to the provisions of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses whether the goods or services promised within each contract are distinct to determine those that are performance obligations.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer (“transaction price”). The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. To the extent that the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price to which the Company expects to be entitled after giving effect to returns, rebates, sales allowances and other variable elements with contracts between the Company and its customers. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance under the contract and all information (historical, current and forecasted) that is reasonably available. Sales taxes and other taxes collected on behalf of third parties are excluded from revenue.

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the significant financing practical expedient, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component during the period ended September 30, 2019.

The Company’s existing contracts with customers contain only a single performance obligation and, as such, the entire transaction price is allocated to the single performance obligation. Should future contracts contain multiple performance obligations, those would require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on observable prices or a cost-plus margin approach when one is not available.

The Company’s performance obligations are to provide pharmaceutical products to several wholesalers or a single specialty pharmaceutical distributor. All of the Company's performance obligations, and associated revenue, are generally transferred to customers at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring control of a promised good to a customer, which is typically upon delivery. Payments for invoices are generally due within 30 to 65 days of invoice date.

Disaggregation of Revenue

The following table reflects revenue by revenue source for the periods indicated:


	Successor		Predecessor		Successor		Predecessor
					Period from		Period from
	Three months		Three months		February 1, 2019		January 1, 2019		Nine months ended
	ended		ended		through		through		ended
(in thousands)	September 30, 2019		September 30, 2018		September 30, 2019		January 31, 2019		September 30, 2018
Product lines
INDOCIN products	$	11,240	$	—	$	30,844	$	—	$	—
SPRIX Nasal Spray		6,419		6,097		18,300		1,354		16,314
SOLUMATRIX products		1,344		—		6,166		—		—
OXAYDO		3,383		1,882		4,920		421		4,831
ARYMO ER		—		174		—		—		712
Total	$	22,386	$	8,153	$	60,230	$	1,775	$	21,857

Reserves for Variable Consideration

Revenues from product sales are recorded at the transaction price, which includes estimates of variable consideration for which reserves are established and which result from returns, rebates and sales allowances that are offered within or impacted by contracts between the Company and its customers. Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company’s historical experience, current contractual requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract as of the date of determination. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. 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 adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known.

Product Returns

Consistent with industry practice, the Company generally offers customers a limited right of return for its products. 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 estimates product return liabilities using the expected value method based on its historical sales information and other factors that it believes could significantly impact its expected returns, including product discontinuations, product recalls and expirations, of which it becomes aware. These factors include its estimate of actual and historical return rates for non-conforming product and open return requests.

Specialty Pharmacy Fees

The Company pays certain specialty pharmaceutical distributor fees based on a contractually determined rate. The Company records the fees on shipment to the distributor and recognizes the fees as a reduction of revenue in the same period the related revenue is recognized.

Wholesaler and Title Fees

The Company pays certain pharmaceutical wholesalers and its third-party logistics provider fees based on a contractually determined rate. The Company accrues these fees on shipments to the respective wholesalers and recognizes the fees as a reduction of revenue in the same period the related revenue is recognized.

Prompt Pay Discount

The Company offers cash discounts to its customers, generally 2% of the sales price, as an incentive for prompt payment. The Company estimates cash discounts using the mostly likely amount method by reducing accounts receivable by the prompt pay discount amount. The discount is recognized as a reduction of revenue in the same period as the related revenue.

Patient Discount Programs

The Company offers co-pay discount programs to patients for each of its products, in which patients receive a co-pay discount on their prescriptions. For discount amounts that are not immediately available, the Company estimates the total amount that will be redeemed using the expected value method based on the quantity of product shipped. The Company recognizes the discount as a reduction of revenue in the same period as the related revenue. As a result of actual co-pay experience related to Oxaydo product sales being more favorable than originally estimated, the Company reduced the Oxaydo co-pay sales allowance by approximately $2.3 million during the three months ended September 30, 2019.

Rebates and Chargebacks

The Company contracts with various commercial and government payor organizations for the payment of rebates and/or chargebacks with respect to utilization of its products. The Company estimates these rebates and chargebacks using the expected value method and records such estimates in the same period the related revenue is recognized, resulting in a reduction of net product sales and the establishment of an accrued expense.

The following table reflects activity in each of the net product sales allowance and reserve categories for the periods indicated:


	Successor
	Fees and
	distribution		Co-pay
(in thousands)	costs		assistance		Rebates		Returns		Total
Balances at January 31, 2019	$	605	$	19,330	$	5,498	$	7,964	$	33,397
Allowances for current period sales		22,680		115,481		21,044		4,655		163,860
Payment and Adjustment of Assumed liabilities Iroko Products Acquisition		—		(5,791)		(2,799)		(836)		(9,426)
Credits or payments made for prior period sales		(605)		(13,540)		(2,699)		(1,562)		(18,406)
Credits or payments made for current period sales		(17,032)		(93,046)		(14,370)		—		(124,448)
Balances at September 30, 2019	$	5,648	$	22,434	$	6,674	$	10,221	$	44,977

Total gross product sales									$	224,090

Total provision for product sales allowances and accruals as a percentage of total gross sales										73%



	Predecessor
	Fees and
	distribution		Co-pay
(in thousands)	costs		assistance		Rebates		Returns		Total
Balances at December 31, 2018	$	462	$	13,326	$	2,664	$	2,020	$	18,472
Allowances for current period sales		568		6,593		594		28		7,783
Assumed liabilities Iroko Products Acquisition		—		5,791		2,799		5,944		14,534
Credits or payments made for prior period sales		(361)		(6,380)		(559)		(28)		(7,328)
Credits or payments made for current period sales		(64)		—		—		—		(64)
Balances at January 31, 2019	$	605	$	19,330	$	5,498	$	7,964	$	33,397

Total gross product sales									$	9,559

Total provision for product sales allowances and accruals as a percentage of total gross sales										81%


	Predecessor
	Fees and
	distribution		Co-pay
(in thousands)	costs		assistance		Rebates		Returns		Total
Balances at December 31, 2017	$	595	$	3,644	$	579	$	—	$	4,818
Adjustment for ASU 2014-09		—		4,221		656		—		4,877
Allowances for current period sales		6,038		52,441		5,383		2,729		66,591
Adjustment related to prior period sales		—		—		180		—		180
Credits or payments made for prior period sales		(555)		(7,866)		(1,235)		—		(9,656)
Credits or payments made for current period sales		(5,448)		(40,081)		(3,341)		(650)		(49,520)
Balances at September 30, 2018	$	630	$	12,359	$	2,222	$	2,079	$	17,290

Total gross product sales									$	88,628

Total provision for product sales allowances and accruals as a percentage of total gross sales										75%

Transaction Price Allocated to Future Performance Obligations

ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of September 30, 2019. The guidance provides certain practical expedients that limit this requirement including performance obligations that are part of a contract that has an original expected duration of one year or less. All of the Company’s contracts are eligible for the practical expedient provided by ASC 606, therefore the Company elected not to disclose any remaining performance obligations.

Contract Balances from Contracts with Customers

When the Company receives consideration from a customer, or such consideration is unconditionally due from a customer prior to the transfer of goods or services to the customer under the terms of a contract, the Company records a contract liability. Contract liabilities are recognized as revenue after control of the products is transferred to the customer and all revenue recognition criteria have been met. The Company classifies contract liabilities as deferred revenue. The Company had no deferred revenue as of September 30, 2019 or December 31, 2018.

Contract assets primarily relate to rights to consideration for goods or services transferred to the customer when the right is conditional on something other than the passage of time. Contract assets are transferred to accounts receivable when the rights become unconditional. The Company had no contract assets as of September 30, 2019 or December 31, 2018.

Costs to Obtain and Fulfill a Contract

The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. When shipping and handling costs are incurred after a customer obtains control of the products, the Company has elected to account for these as costs to fulfill the promise and not as a separate performance obligation. Shipping and handling costs associated with the distribution of finished products to customers are expensed as incurred and are recorded in costs of goods sold in the accompanying consolidated statements of operations. The Company expenses incremental costs of obtaining a contract with a customer (for example, commissions) when incurred as the period of benefit is less than one year.

Investments

9 Months Ended

Sep. 30, 2019

Investments

Investments

5. Investments

Marketable Securities

The Company owned no marketable securities as of September 30, 2019.

The following table reflects marketable securities of the Predecessor Company as of December 31, 2018:


(in thousands)	Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value
Corporate notes and bonds	$	4,990	$	—	$	(2)	$	4,988
Total	$	4,990	$	—	$	(2)	$	4,988

Inventory

9 Months Ended

Sep. 30, 2019

Inventory

Inventory

6. Inventory

Inventory is stated at the lower of cost or market using actual cost net of reserve for excess and obsolete inventory. The following table reflects the components of inventory as of September 30, 2019 and December 31, 2018:


	Successor		Predecessor
	September 30,		December 31,
(in thousands)	2019		2018
Raw materials	$	1,449	$	1,374
Work in process		3,038		665
Finished goods		5,051		600
Total	$	9,538	$	2,639

As a result of the Iroko Products Acquisition as of January 31, 2019, the SOLUMATRIX and INDOCIN products inventory was acquired and reflected at fair value of $28.4 million, with $27.1 million of finished goods inventory and $1.3 million of raw materials inventory. As of September 30, 2019, the fair value of the Company’s SOLUMATRIX and INDOCIN products inventory is $5.4 million, with $3.6 million of finished goods, $1.4 million of work-in-process inventory and $0.4 million of raw materials.

As a result of fresh start accounting, the Company’s SPRIX Nasal Spray and OXAYDO inventory was adjusted to its fair value of $5.5 million as of January 31, 2019. The fair value adjustment totaled $3.2 million, with $2.2 million related to work in process inventory and $1.0 million related to finished goods inventory. As of September 30, 2019, SPRIX and OXAYDO inventory was $4.1 million and the fair value adjustment had been fully expensed.

Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2019

Intangible Assets and Goodwill

Intangible Assets and Goodwill

7. Intangible Assets and Goodwill

The following table reflects the balance of the intangible assets of the Successor Company as of September 30, 2019:


	Gross				Net		Remaining Useful
	Intangible		Accumulated		Intangible		Life
(in thousands)	Assets		Amortization		Assets		(in years)
INDOCIN product rights	$	90,106	$	(6,674)	$	83,432	8.34
SPRIX Nasal Spray product rights		31,900		(2,363)		29,537	8.34
OXAYDO product rights		1,300		(289)		1,011	2.34
Goodwill		58,747		—		58,747	N/A
Total	$	182,053	$	(9,326)	$	172,727

The following table reflects the balance of the intangible assets of the Predecessor Company as of December 31, 2018


	Gross				Net		Remaining Useful
	Intangible		Accumulated		Intangible		Life
(in thousands)	Assets		Amortization		Assets		(in years)
OXAYDO product rights	$	7,623	$	(4,330)	$	3,293	3.00
SPRIX Nasal Spray product rights		4,831		(3,843)		988	1.00
Total	$	12,454	$	(8,173)	$	4,281

As a result of fresh start accounting, the OXAYDO and SPRIX Nasal Spray product rights and their remaining useful lives were revalued. The value of the OXAYDO product rights were reduced to $1.3 million and the remaining useful life decreased to 3 years as of January 31, 2019. The SPRIX Nasal Spray product rights were increased to $31.9 million and the remaining useful life increased to 9 years as of January 31, 2019.

As a result of the Iroko Products Acquisition, the Company acquired the product rights to the INDOCIN products. The fair value of the INDOCIN product rights was determined to be $90.1 million and the remaining useful life to be 9 years as of January 31, 2019.

On January 31, 2019, the Company recognized $58.7 million of goodwill as a result of fresh start accounting adjustments. See Note 3—Fresh Start Accounting for additional details.

Accrued Expenses

9 Months Ended

Sep. 30, 2019

Accrued Expenses

Accrued Expenses

8. Accrued Expenses

The following table reflects the components of accrued expenses for the periods indicated:



	Successor		Predecessor
(in thousands)	September 30,		December 31,
	2019		2018
Sales allowances	$	38,603	$	17,174
Interest		2,714		1,049
Payroll and related		2,249		3,567
Professional services		1,680		1,847
Sales and marketing		871		—
Restructuring		733		81
Royalties		710		34
Manufacturing services		264		—
Other		1,801		832
	$	49,625	$	24,584

Debt

9 Months Ended

Sep. 30, 2019

Debt

Debt

9. Debt

Successor Company Debt

The following table reflects the Successor Company’s debt as of September 30, 2019:


	September 30, 2019
(in thousands)
Series A-1 Notes	$	50,000
Series A-2 Notes		45,000
Royalty rights obligation		5,769
Credit agreement		5,000
Interim promissory note		4,500
		110,269
Unamortized debt discounts		(5,820)
Unamortized deferred financing fees		(864)
Carrying value		103,585
Less: current portion of long-term debt		(6,990)
Net, long-term debt	$	96,595

13% Senior Secured Notes Indenture Due 2024

On the Effective Date, the Company issued $95.0 million aggregate principal amount of its 13% senior secured notes (the “13% Notes”) and entered into an indenture (the “Indenture”) governing the 13% Notes with the guarantors party thereto (the “Guarantors”) and Wilmington Savings Fund Society, previously held by U.S. Bank National Association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”). The 13% Notes were issued in two series: (x) $50.0 million of “Series A-1 Notes”, issued pursuant to the Plan to former holders of First Lien Secured Notes Claims (the “former 13% Notes”) and which was subject to an interest holiday from the Effective Date through November 1, 2019 and (y) $45.0 million of “Series A-2 Notes,” issued to Iroko and certain of its affiliates and which are subject to the rights of set-off and recoupment and related provisions set forth in the Purchase Agreement. On the Effective Date, the Company recorded a discount associated with the interest holiday on the Series A-1 Notes of $4.6 million. The obligations of the Company under the Indenture and the 13% Notes are unconditionally guaranteed on a secured basis by the Guarantors.

Interest on the 13% Notes accrues at a rate of 13% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year (each, a “Payment Date”) commencing on May 1, 2019 (subject to the interest holiday referred to above with respect to the Series A-1 Notes). On each Payment Date, the Company will also pay an installment of principal on the 13% Notes in an amount equal to 15% of the aggregate net sales of OXAYDO (oxycodone HCI, USP) tablets for oral use only —CII, SPRIX (ketorolac tromethamine) Nasal Spray, ARYMO ER, Egalet-002, the SOLUMATRIX® products and the INDOCIN products for the two consecutive fiscal quarter period most recently ended, less the amount of interest paid on the 13% Notes on such Payment Date.

The 13% Notes are senior secured obligations of the Company and will be equal in right of payment to all existing and future pari passu indebtedness of the Company, will be senior in right of payment to all existing and future subordinated indebtedness of the Company, will have the benefit of a security interest in the 13% Notes collateral and will be junior in lien priority in respect of any collateral that secures any first priority lien obligations incurred from time to time in accordance with the Indenture. The stated maturity date of the 13% Notes is January 31, 2024. Upon the occurrence of a Change of Control, subject to certain conditions, or certain Asset Sales events (each, as defined in the Indenture), holders of the 13% Notes may require the Company to repurchase for cash all or part of their 13% Notes at a repurchase price equal to 101% of the principal amount of the 13% Notes to be repurchased, plus accrued and unpaid interest to the date of repurchase.

The Company may redeem the 13% Notes at its option, in whole or in part from time to time, prior to January 31, 2020, at a redemption price equal to 100% of the principal amount of the 13% Notes being redeemed, plus accrued and unpaid interest, if any, through the redemption date, plus a make-whole premium computed using a discount rate equal to the treasury rate in respect of such redemption date plus 1%. The Company may redeem the 13% Notes at its option, in whole or in part from time to time, on or after January 31, 2020, at a redemption price equal to: (i) from and including January 31, 2020 to and including January 30, 2021, 103% of the principal amount of the 13% Notes to be redeemed and (ii) from and including January 31, 2021 and thereafter, 100% of the principal amount of the 13% Notes to be redeemed, in each case, plus accrued and unpaid interest to the redemption date. In addition, prior to January 31, 2020, the Company may redeem, at its option, up to 35% of the aggregate principal amount of the 13% Notes with the proceeds of one or more public or private equity offerings at a redemption price equal to 113.50% of the aggregate principal amount of the 13% Notes to be redeemed, plus accrued and unpaid interest to the date of redemption in accordance with the Indenture; provided that at least 65% of the aggregate principal amount of 13% Notes issued under the Indenture remains outstanding immediately after each such redemption and provided further that each such redemption occurs within 90 days of the date of closing of each such equity offering. No sinking fund is provided for the 13% Notes, which means that the Company is not required to periodically redeem or retire the 13% Notes.

Pursuant to the Indenture, the Company and its restricted subsidiaries must also comply with certain affirmative covenants, such as furnishing financial statements to the holders of the 13% Notes, and negative covenants, including limitations on the following: the incurrence of debt; the issuance of preferred and/or disqualified stock; the payment of dividends, the repurchase of shares and under certain conditions making certain other restricted payments; the prepayment, redemption or repurchase of subordinated debt; the merger, amalgamation or consolidation involving the Company; engaging in certain transactions with affiliates; and the making of investments other than those permitted by the Indenture. In addition, commencing December 31, 2019, the Company must maintain a minimum level of consolidated liquidity, based on unrestricted cash on hand and availability under any revolving credit facility, equal to the greater of (1) the quotient of the outstanding principal amount of the Notes divided by 9.5 and (2) $7.5 million.

The Indenture governing the 13% Notes contains customary events of default with respect to the 13% Notes (including the Company’s failure to make any payment of principal or interest on the 13% Notes when due and payable or the Company’s failure to comply with the minimum consolidated liquidity covenant described above), and upon certain events of default occurring and continuing, the Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding 13% Notes by notice to the Company and the Trustee, may (subject to the provisions of the Indenture) declare 100% of the principal of and accrued and unpaid interest, if any, on all the 13% Notes to be due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, as well as the then-applicable optional redemption premium under the Indenture, will be due and payable immediately. In the case of certain events of bankruptcy, insolvency or reorganization involving the Company or a Restricted Subsidiary (as defined in the Indenture), the Notes will automatically become due and payable. With respect to any event of default due to the Company’s non-compliance with the minimum liquidity covenant, the Company may, within ten business days, cure such default through the issuance of equity securities, subordinated debt securities or certain other capital contributions.

Preemptive Rights Agreements

On the Effective Date, the Company entered into preemptive rights agreements (the “Preemptive Rights Agreements”) with certain of the holders of the former 13% Notes. The Preemptive Rights Agreements provide for customary preemptive rights in favor of the parties thereto with respect to certain future issuances of debt or equity securities by the Company, subject to certain exceptions, for so long as such party continues to hold at least 2.5% of the outstanding shares of the Company’s common stock.

Collateral Agreement

On the Effective Date and in connection with its entry into the Indenture, the Company entered into a collateral agreement, dated as of the Effective Date, with the Collateral Agent and the subsidiary parties from time to time party thereto (the “Collateral Agreement”). Pursuant to the terms of the Collateral Agreement, the Notes and the related guarantees are secured by a first priority lien on substantially all of the Company’s and the Guarantors’ assets, in each case, subject to certain prior liens and other exclusions, and a pledge of 65% of the voting equity interests and 100% of the non-voting equity interests of the Company’s foreign subsidiaries (other than Egalet Limited and any Specified IP Subsidiary (as defined in the Indenture), of which 100% of the voting equity interests have been pledged) to the extent and only for so long as the Company determines in good faith that permitting a pledge of 100% of such voting Equity Interests would result in material adverse tax consequences for the Company or any of its subsidiaries, it being understood that, if a percentage less than 100% but greater than 65% of such voting equity interests may be pledged without any such material adverse tax consequences, then such percentage shall be pledged.

Royalty Rights Obligation

In connection with 13% Notes, the Company entered into royalty rights agreements (the “Royalty Rights”) with each of the holders of the 13% Notes pursuant to which the Company will pay the holders of the 13% Notes an aggregate 1.5% royalty on Net Sales (as defined in the Indenture) from the Effective Date through December 31, 2022.

The Royalty Rights were determined to be a freestanding element with respect to the 13% Notes and the Company is accounting for the Royalty Rights obligation relating to future royalties as a debt instrument. The Company has Royalty Rights obligations of $5.8 million as of September 30, 2019, which are classified as current and non-current debt in the Company’s Consolidated Balance Sheets.

The accounting for the 13% Notes requires the Company to make certain estimates and assumptions about the future net sales. The estimates of the magnitude and timing of net sales are subject to significant variability due to the extended time period associated with the financing transaction, and are thus subject to significant uncertainty. Therefore, these estimates and assumptions are likely to change, which may result in future adjustments to the portion of the debt that is classified as a current liability, the amortization of debt issuance costs and discount as well as the accretion of the interest expense. Any such adjustments could be material. On the Effective Date, the fair value of the Royalty Rights obligation associated with net product sales was estimated to be approximately $5.7 million using a probability-weighted present value analysis. On the Effective Date, the Royalty Rights obligation was recorded with an offsetting discount recognized on the 13% Notes.

Credit Agreement

On March 20, 2019, (the “Closing Date”), the Company entered into a credit agreement (the “Credit Agreement”) with Cantor Fitzgerald Securities as administrative agent and collateral agent (in such capacities, the “Agent”) and certain funds managed by Highbridge Capital Management, LLC, as lenders (collectively, the “Lenders”), which Credit Agreement consists of a $20.0 million revolving line of credit. The Company drew $5.0 million on the Closing Date and must maintain at least 25% of the commitment amount outstanding at all times. The Company will use the proceeds of the loans under the Credit Agreement for working capital purposes and to pay costs and expenses incurred by the Credit Agreement and related transactions. This arrangement will be recognized as a related party transaction as the Lenders are holders of a portion of the Company’s 13% Notes that were issued on January 31, 2019.

Advances under the Credit Agreement bear interest at the Company’s option at either the LIBOR Rate (as defined in the Credit Agreement) plus 5.00% or the Base Rate (as defined in the Credit Agreement) plus 4.00%. The Credit Agreement matures on March 20, 2022.

The obligations of the Company under the Credit Agreement are unconditionally guaranteed on a senior secured basis by the Company’s wholly-owned subsidiaries, Zyla Life Sciences US Inc. and Egalet Ltd. (collectively, the “Guarantors”). As security for the Company’s obligations under the Credit Agreement, the Company and the Guarantors have granted to the Agent, for the benefit of the Lenders and other secured parties, a first priority lien on substantially all of their tangible and intangible personal property (other than certain specified excluded assets), including proceeds and accounts related to this property and the capital stock of the Guarantors, pursuant to the terms of that certain Collateral Agreement, dated as of the Closing Date (the “Collateral Agreement”), among the Company and the Guarantors in favor of the Agent for the benefit of the Lenders and other secured parties. The Credit Agreement will (i) be equal in right of payment to all existing and future pari passu indebtedness of the Company, (ii) be senior in right of payment to the obligations of the Company pursuant to that certain Indenture, dated as of January 31, 2019 (the “Indenture”), among the Company, the Guarantors and U.S. Bank National Association, as trustee and collateral agent, and (iii) be senior in right of payment to all existing and future subordinated indebtedness of the Company.

The Company may terminate the commitments under the Credit Agreement at its option, in whole or in part from time to time, subject to a termination fee equal to (x) 1.0% from the Closing Date through March 20, 2020 and (y) 0.50% from March 20, 2020 through March 20, 2021.

Pursuant to the Credit Agreement, the Company and its subsidiaries must also comply with certain customary affirmative covenants, such as furnishing financial statements to the Lenders, and negative covenants, including limitations on the following: incurring debt; issuing preferred and/or disqualified stock; paying dividends, repurchasing shares and, under certain conditions, making certain other restricted payments; prepaying, redeeming or purchasing subordinated debt; conducting a merger or consolidation involving the Company; engaging in certain transactions with affiliates; disposing of assets under certain circumstances; and making certain investments, in each case, other than those permitted by the Credit Agreement. In addition, commencing with the fiscal quarter ending on December 31, 2019, the Company must maintain a minimum level of consolidated liquidity, based on unrestricted cash on hand and availability under any revolving credit facility, equal to the greater of (1) the quotient of the outstanding principal amount of the senior secured notes issued pursuant to the Indenture divided by 9.5 and (2) $7,500,000. As of September 30, 2019 the Company’s minimum level of consolidated liquidity is $10.0 million.

The Credit Agreement contains customary events of default (including the Company’s failure to make any payment of principal or interest when due and payable, the failure to comply with the minimum consolidated liquidity covenant or other covenants described above, or upon a Change of Control (as defined in the Credit Agreement)), and, upon such events of default occurring and continuing, the Lenders may accelerate the loans. In the event of certain events of bankruptcy, insolvency or reorganization involving the Company or its subsidiaries, the obligations under the Credit Agreement will automatically become due and payable. With respect to any event of default due to the Company’s non-compliance with the minimum liquidity covenant (described above), the Company may, within ten business days, cure such default through the issuance of equity securities, subordinated debt securities or certain other capital contributions.

On the Closing Date and in connection with its entry into of the Credit Agreement, the Company and the Guarantors entered into the Collateral Agreement, which granted a first priority lien on substantially all of the Company’s and the Guarantors’ assets, in each case subject to certain existing liens and other exclusions.

Interim Promissory Note

On the Effective Date, pursuant to the Purchase Agreement, the Company issued a $4.5 million promissory note to an affiliate of Iroko in respect of certain inventory purchases by Iroko as a part of the Iroko Products Acquisition (the “Interim Promissory Note”). The Interim Promissory Note bears interest at a rate of 8% per annum (payable by way of increasing the principal amount of the Interim Promissory Note on each interest payment date) and matures on July 31, 2020.

The following table reflects unamortized discounts and deferred financing fees on Successor Company debt as of September 30, 2019:


			Deferred
(in thousands)	Discounts		Financing Fees
Series A-1 Notes, interest holiday	$	2,414	$	—
13% Notes, Royalty Rights Obligation		3,234		—
Credit agreement		172		864
	$	5,820	$	864

The following table reflects the Company’s estimated future principal payments as of September 30, 2019, and excludes payments to be made under the Royalty Rights Obligation, which are included in the carrying value of the Company’s current and non-current debt on the Company’s Consolidated Balance Sheet as of September 30, 2019:


(in thousands)
Remainder of 2019	$	—
2020		6,558
2021		4,594
2022		12,007
2023		9,848
2024		71,493

Predecessor Company Debt

Former 13% Senior Secured Notes

In August 2016 and January 2017, the Company issued a total of $80.0 million aggregate principal amount of the 13% Notes (the “former 13% Notes”). The former 13% Notes were sold only to qualified institutional buyers within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).

The former 13% Notes were senior secured obligations of the Company and equal in right of payment to all existing and future pari passu indebtedness of the Company (including the 5.50% Notes), were senior in right of payment to all existing and future subordinated indebtedness of the Company, had the benefit of a security interest in the Notes collateral and are junior in lien priority in respect of any collateral that secures any first priority lien obligations incurred, which includes intellectual property, from time to time in accordance with the indenture governing the former 13% Notes.

On the Effective Date, in addition to the cash settlement of $20.0 million, the outstanding 13% Notes were converted into the number of shares of common stock of the Company (or Warrants) representing, in the aggregate, 19.4% of the shares outstanding as of the Effective Date and the issuance of the Series A-1 Notes of $50.0 million. As of December 31, 2018, a total of $80.0 million in principal amount of the former 13% Notes remained outstanding. Refer to Note 3 – Fresh Start Accounting for further details.

Former 5.50% Convertible Senior Notes

In April and May 2015, the Company issued through a private placement $61.0 million in aggregate principal amount of the 5.50% Convertible Senior Notes (the “5.50% Notes”).

The 5.50% Notes were general, unsecured and unsubordinated obligations of the Company and ranked senior in right of payment to all of the Company’s indebtedness that was expressly subordinated in right of payment to the 5.50% Notes. The 5.50% Notes were effectively subordinated to any secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness.

On the Effective Date, the outstanding 5.50% Notes were cancelled and the 5.50% noteholders received shares of common stock of the Successor Company (or warrants) representing, in the aggregate, 16.1 % of the shares of common stock outstanding as of the Effective Date. As of September 30, 2019, the 5.50% Notes were no longer outstanding. As of December 31, 2018, a total of $24.7 million in principal amount of the 5.50% Notes remained outstanding. Refer to Note 3 – Fresh Start Accounting for further details.

Former 6.50% Convertible Notes

In December 2017, the Company entered into exchange agreements (the “Exchange Agreements”) with certain holders (the “Holders”) of the Company’s 5.50% Notes pursuant to which the Holders agreed to exchange, in the aggregate, approximately $36.4 million of outstanding principal amount of the 5.50% Notes for, in the aggregate, (i) approximately $23.9 million of 6.50% Convertible Senior Notes due 2024 (the “6.50% Notes”) issued by the Company, (ii) a warrant exercisable for 3,500,000 shares of the Company’s common stock at an exercise price of $0.01 per share and (iii) payments, in cash, of all accrued but unpaid interest as of the closing on the 5.50% Notes exchanged in the transaction (the “Exchange”). At the closing of the Exchange, 2,500,000 warrants were exercised. The remaining 1,000,000 warrants were exercised in January 2018.

On the Effective Date, the outstanding 6.50% Notes were cancelled, and the 6.50% noteholders received shares of common stock of the Successor Company (or warrants) representing, in the aggregate, 15.5% of the shares of common stock outstanding as of the Effective Date. As of September 30, 2019, the 6.50% Notes were no longer outstanding. As of December 31, 2018, a total of $23.9 million in principal amount of the 6.50% Notes remained outstanding. Refer to Note 3 – Fresh Start Accounting for further details.

Leases

9 Months Ended

Sep. 30, 2019

Leases

Leases

10. Leases

The Company leases office space, vehicles and office equipment under operating lease arrangements. The leases have initial lease terms ranging from one to five years. Certain of the Company’s leases contain renewal options to extend the lease, which if the Company determined it is reasonably certain to exercise, that renewal option would be included in the total lease term.

The Company accounts for its leases in accordance with ASC 842. The Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the Company the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the Company has the right to control the use of the identified asset and to obtain substantially all of the economic benefits from using the underlying asset.

Right-of-use assets represent the Company’s right to control the use of an explicitly or implicitly identified fixed asset for a period of time and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating leases where the Company is the lessee are included in ROU assets, Other current liabilities and Other long-term liabilities on the Company’s consolidated balance sheets. The lease liabilities are measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how the Company determined the incremental borrowing rate (“IBR”) it uses to present value the unpaid lease payments, the lease term and lease payments.

ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its IBR. The Company’s leases do not provide an implicit rate, therefore, management uses its IBR based on the information available at commencement date in determining the present value of lease payments.

.

The lease term for all of the Company’s leases includes the noncancelable period of the lease. Lease payments included in the measurement of the lease asset or liabilities comprised of fixed payments. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company recognizes lease expense associated with its short-term leases as an expense on a straight-line basis over the lease term. Variable lease payments are presented in the Company’s consolidated statements of operations in the same line item as expense arising from fixed lease payments for operating leases.

The following table reflects the components of lease expense as of the periods indicated:


	Successor		Successor		Predecessor
			Period from		Period from
	Three months		February 1, 2019		January 1, 2019
	ended		through		through
(in thousands)	September 30, 2019		September 30, 2019		January 31, 2019

Operating lease expense:
Fixed lease cost	$	252	$	598	$	69
Total operating lease expense	$	252	$	598	$	69

The following table reflects supplemental balance sheet information related to leases as of September 30, 2019:


		Successor
(in thousands)	Location in Balance Sheet	As of September 30, 2019
Operating leases
Operating lease ROU asset	ROU asset - operating lease	$	2,885

Current operating lease liabilities	Other current liabilities		976
Non-current operating lease liabilities	Other liabilities		2,329
Total operating lease liability		$	3,305

The following table reflects supplement lease term and discount rate information related to leases as of September 30, 2019:


	Successor
	As of September 30, 2019

Weighted-average remaining lease term		3.18	years

Weighted-average discount rate		8.00%

The following table reflects supplemental cash flow information related to leases as of the periods indicated:


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019
	through		through
(in thousands)	September 30, 2019		January 31, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	846	$	—

Right-of-use assets obtained in exchange for lease obligations:
New operating lease - Fleet vehicles	$	2,026	$	2,478
Termination of operating lease -Fleet vehicles		(677)		—

The following table reflects future minimum lease payments under noncancelable leases as of September 30, 2019:


(in thousands)
2019 (excludes the nine months ended September 30, 2019)	$	318
2020		1,274
2021		1,227
2022		634
2023		232
Thereafter		—
Total lease payments		3,685
Less: Imputed interest		(380)
Total minimum lease payments	$	3,305

Stockholders' Equity	9 Months Ended
Stockholders' Equity	Sep. 30, 2019
Stockholders' Equity
Stockholders' Equity	11. Stockholders’ Equity Successor Preferred Stock The Successor Company’s certificate of incorporation authorizes it to issue up to 5,000,000 shares of preferred stock with a par value of $0.001 per share. As of September 30, 2019, there were no preferred shares outstanding. Common Stock The Successor Company’s certificate of incorporation authorizes it to issue up to 100,000,000 shares of common stock with a par value of $0.001 per share. As of September 30, 2019, there were 9,360,968 shares issued and outstanding. Outstanding shares were issued to holders of Predecessor first lien obligations and convertible notes claims of 4,774,093 shares and Iroko and its affiliates of 4,586,875 shares. Amended and Restated Charter and Bylaws On February 1, 2019, in accordance with the Plan, the Company’s Fourth Amended and Restated Certificate of Incorporation (as amended and restated, the “A&R Charter”) was filed with the Secretary of State of the State of Delaware, at which time the A&R Charter became effective. Among other things, the A&R Charter decreases the number of shares of authorized common stock of the Company from 275,000,000 to 100,000,000 and decreases the maximum number of directors that may serve on the Company’s Board of Directors to seven. On the Effective Date, pursuant to the Plan, the Company’s Second Amended and Restated Bylaws (the “A&R Bylaws”) became effective. Among other things, the A&R Bylaws provide for special director nomination procedures, related party transaction approval procedures and independence requirements with respect to certain directors appointed by the Supporting Noteholders pursuant to the Plan (or such directors successors), in each case, for a two-year period following the Effective Date. Effective June 3, 2019, the Company changed its name to Zyla Life Sciences by filing an amendment to the A&R Charter. A copy of the amendment to the Charter is filed as Exhibit 3.2 to this Quarterly Report on Form 10-Q. In addition, the A&R Bylaws were amended to reflect the name change to Zyla Life Sciences and to expressly permit communications between and among stockholders and directors of the Company by means of electronic transmissions. A copy of the amendment to the A&R By-laws is attached hereto as Exhibit 3.4 to this Quarterly Report on Form 10-Q. Stockholders’ Agreement On the Effective Date, the Company entered into a stockholders’ agreement (the “Stockholders’ Agreement”) with Iroko and certain of its affiliates. Pursuant to the Stockholders’ Agreement, Iroko and the other stockholder parties agreed to a customary lock-up with respect to their shares of common stock for a period of 90 days following the Effective Date and a customary standstill provision for a period of 24 months following the Effective Date, in each case, subject to certain exceptions. In addition, pursuant to the Stockholders’ Agreement, the stockholder parties are entitled to designate two nominees to the Company’s Board of Directors for so long as such entities hold at least 25% of the equity consideration received on the Effective Date. The Stockholders’ Agreement also provides for customary preemptive rights in favor of the stockholder parties with respect to future issuance of equity securities by the Company, subject to certain exceptions. Warrant Agreements On the Effective Date, the Company entered into warrant agreements (the “Warrant Agreements”) with Iroko, certain of Iroko’s affiliates and certain other parties entitled to receive shares of the Company’s common stock as consideration pursuant to the Purchase Agreement or in satisfaction of certain claims pursuant to the Plan. Pursuant to the Warrant Agreements, the Company issued warrants to purchase up to an aggregate of 4,972,365 shares of the Company’s common stock. The warrants are exercisable at any time at an exercise price of $0.001 per share, subject to certain ownership limitations including, with respect to Iroko and its affiliates, that no such exercise may increase the aggregate ownership of the Company’s outstanding common stock of such parties above 49% of the number of shares of its common stock then outstanding for a period of 18 months. All of the Company’s outstanding warrants have similar terms whereas under no circumstance may the warrants be net-cash settled. As such, all warrants are equity-classified. Predecessor In connection with the Company’s Plan of Reorganization and emergence from bankruptcy, all equity interests in the Predecessor Company were cancelled, including common stock and equity-based awards. Registration Rights Agreement On the Effective Date, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with Iroko pursuant to which the Company agreed to file with the SEC, upon Iroko’s request at any time following the date which is 180 days following the date on which any equity securities of the Company are accepted for listing on any national securities exchange, a registration statement on Form S-1 or Form S-3, and thereafter to use its commercially reasonable efforts to cause to be declared effective as promptly as practicable, one or more registration statements for the offer and resale of the Company’s common stock held by Iroko and certain of its affiliates. The Registration Rights Agreement contains other customary terms and conditions, including, without limitation, provisions with respect to blackout periods, underwriter cutbacks, reimbursement of expenses and indemnification.

Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Measurements

Fair Value Measurements

12. Fair Value Measurements

The Company measures certain assets and liabilities at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The guidance in ASC 820 outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, the Company maximizes the use of quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

·

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

·

Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

·

Level 3—Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

Cash equivalents - Cash equivalents primarily consisted of money market funds with overnight liquidity and no stated maturities. The Company classified cash equivalents as Level 1, due to their short-term maturity, and measured the fair value based on quoted prices in active markets for identical assets.

Acquisition-related contingent consideration - As of September 30, 2019, the Company had obligations to make contingent payment consideration for future royalties to Iroko based upon annual INDOCIN product net sales over $20.0 million. Pursuant to the Iroko Products Acquisition, the Company recorded the acquisition-date fair value of these contingent liabilities, based on the likelihood of contingent earn-out payments. The earn-out payments are subsequently remeasured to fair value each reporting date. The Company classified the acquisition-related contingent consideration liabilities to be settled in cash as Level 3, due to the lack of relevant observable inputs and market activity. Changes in assumptions described above could have an impact on the payout of contingent consideration.

The following table reflects fair value hierarchy information about each major category of the Company’s financial assets and liabilities measured, at fair value on a recurring basis, for the periods indicated:


(in thousands)	Fair Value Measurements as of September 30, 2019
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents (money market funds)	$	76	$	—	$	—	$	76
Total assets	$	76	$	—	$	—	$	76

Liabilities
Acquisition-related contingent consideration	$	—	$	—	$	18,300	$	18,300
Total liabilities	$	—	$	—	$	18,300	$	18,300


(in thousands)	Fair Value Measurements as of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents (money market funds)	$	22,996	$	—	$	—	$	22,996
Marketable securities, available-for-sale		—		4,988		—		4,988
Total assets	$	22,996	$	4,988	$	—	$	27,984

The following table reflects a rollforward of our Level 3 liabilities:


(in thousands)

Balance at January 31, 2019	$	14,800
Change in fair value of contingent consideration		3,500
Balance at September 30, 2019	$	18,300

The fair value of the contingent consideration was determined using an income approach based on projected INDOCIN product net sales and appropriate discount rates. The fair value of the contingent consideration is remeasured each reporting period, with changes in fair value recorded in the consolidation statements of operations. The change in fair value of the contingent consideration during the three months ended September 30, 2019 was primarily due to the product net sales forecast and discount rates.

- Definition

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

+ References + Details

Net (Loss) Income Per Common Share

9 Months Ended

Sep. 30, 2019

Net (Loss) Income Per Common Share

Net (Loss) Income Per Common Share

13. Net (Loss) Income Per Common Share

On the Effective Date the Predecessor Company's equity was cancelled and new equity was issued. Additionally, the Predecessor Company's 5.50% and 6.50% Convertible Notes were cancelled. See Note 11 – Stockholders' Equity and Note 16 – Reorganization Items for further details.

Basic net loss per common share excludes dilution for potential common stock issuances and is computed by dividing net loss by the weighted-average number of shares of common stock outstanding for the period. The 4,972,364 shares of common stock issuable upon the exercise of warrants are included in the number of outstanding shares used for the computation of basic and diluted loss per share.

The following table reflects the computation of basic and diluted weighted average shares outstanding and net income (loss) per share for the periods indicated:


	Successor		Predecessor		Successor		Predecessor
					Period from		Period from
	Three months		Three months		February 1, 2019		January 1, 2019		Nine months
	ended		ended		through		through		ended
(in thousands, except share and per share data)	September 30, 2019		September 30, 2018		September 30, 2019		January 31, 2019		September 30, 2018

Basic and diluted net income (loss) per common share calculation:
Net (loss) income per share of common stock—basic and diluted	$	(10,290)	$	(51,227)	$	(40,416)	$	107,240	$	(75,540)
Weighted average common stock outstanding		14,333,332		55,192,542		14,333,332		56,547,101		51,944,358
Net (loss) income per share of common stock—basic and diluted	$	(0.72)	$	(0.93)	$	(2.82)	$	1.90	$	(1.45)

Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Stock-Based Compensation

Stock-Based Compensation

14. Stock-Based Compensation

Successor

2019 Stock-Based Incentive Compensation Plan

In March 2019, the Company adopted its 2019 Stock-Based Incentive Compensation Plan (the “2019 Stock Plan”) for the benefit of employees, non-employee directors and consultants of the Company and its subsidiaries and affiliates. The 2019 Stock Plan is designed to attract and retain valued employees, consultants and non-employee directors by offering them a greater stake in the Company’s success and a closer identity with it, and to encourage ownership of the Company’s stock by such persons. Under the 2019 Stock Plan, 2,150,000 shares of the Company’s common stock are reserved for issuance, including 1,433,333 shares reserved for grants to executives and 716,667 shares reserved for persons other than executives, subject to equitable adjustment based on the effect of certain corporate transactions. The Stock Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). In the discretion of the Compensation Committee, the right of a 2019 Stock Plan participant to exercise or receive a grant or settlement of any award, and the timing thereof, may be subject to performance goals as may be specified by the Compensation Committee. Awards granted to executives that are forfeited or otherwise terminate will once again be available for issuance to executives under the 2019 Stock Plan. Similarly, awards granted to persons other than executives that are forfeited or otherwise terminate will once again be available for issuance to persons who are not executives under the Stock Plan. Any award granted under the 2019 Stock Plan, including a common stock award, will be subject to mandatory repayment by the participant to the Company pursuant to the terms of any “clawback” or recoupment policy that is directly applicable to the 2019 Stock Plan and set forth in an award agreement or as required by applicable law.

For restricted stock awards and restricted stock units that vest subject to the satisfaction of service requirements, stock-based compensation expense is measured based on the fair value of the award on the date of grant and is recognized as expense on a straight-line basis over the requisite service period. All of the restricted stock awards and restricted stock units reflected above vest based on performance conditions or over time as stipulated in the individual award agreements. In the event of a change in control, the unvested awards will be accelerated and fully vested immediately prior to the change in control.

Shares Reserved for Future Issuance Under the 2019 Plan

The following table reflects the Company’s shares that are reserved under its 2019 Stock Plan as of September 30, 2019:


Shares initially reserved under the 2019 Plan		2,150,000
Time-based restricted stock units granted under the 2019 Plan		(801,000)
Performance-based restricted stock units granted under the 2019 Plan		(509,000)
Stock options granted under the Plan		(572,000)
Restricted stock units and stock options forfeited		199,000
Remaining shares available for future grant		467,000

The estimated grant date fair value of the Company’s stock-based awards is amortized ratably over the award’s service periods. The following table reflects stock-based compensation expense recognized for the periods indicated:



	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Nine months
	through		through		ended
	September 30, 2019		January 31, 2019		September 30, 2018
(in thousands)
General and administrative	$	1,832	$	3,466	$	2,749
Sales and marketing		57		436		175
Research and development		—		223		170
Total stock-based compensation expense	$	1,889	$	4,125	$	3,094

Restricted Stock Awards

Time-Based Restricted Stock Unit Award Agreement

Time-based restricted stock units granted under the 2019 Stock Plan will be awarded pursuant to a time-based restricted stock unit agreement with the Company. On March 26, 2019, the Compensation Committee approved a form of time-based Restricted Stock Unit Award Agreement (the “Time RSU Agreement”). The Time RSU Agreement provides for grants of restricted stock units (“RSUs”), with two potential vesting schedules: (i) 1/3 of the RSUs vesting on each of the first three anniversaries of the date of grant; and (ii) 100% of the RSUs vesting on the first anniversary of the date of grant, in each case subject to the participant’s continued employment with the Company through each such anniversary date. In the event of a change of control (as defined in the 2019 Stock Plan) prior to a termination of the participant’s service, any remaining unvested time-based RSUs will vest and be settled immediately prior to the change of control.

Performance-Based Restricted Stock Unit Award Agreement

Performance-based RSUs granted under the 2019 Stock Plan will be awarded pursuant to a performance-based restricted stock unit agreement with the Company. On March 26, 2019, the Compensation Committee approved a form of performance-based Restricted Stock Unit Award Agreement (the “Performance RSU Agreement”). The Performance RSU Agreement provides for grants of RSUs, which only vest if the Company achieves at least 75% of its 2019 Corporate Goals, as set by the Company’s Board of Directors in March 2019, with the exact number of performance-based RSUs vesting pro-rated based on the level of achievement between 75% and 100%. 2019 Corporate Goals include financial performance, business development goals and other corporate metrics. Assuming those parameters are satisfied, the performance-based RSUs have two potential issuance schedules: (i) one with 50% of the performance-based RSUs eligible for issuance on each of March 1, 2020 and March 1, 2021 and (ii) one with 100% of the performance-based RSUs eligible for issuance on March 1, 2020, in each case subject to the participant’s continued employment with the Company through each such anniversary date. In the event of a change of control (as defined in the 2019 Stock Plan) prior to a termination of the participant’s service, any remaining unvested performance-based RSUs will vest and be settled immediately prior to the change of control.

The following table reflects the Company’s restricted stock award (RSU) activity for the periods indicated:


		Weighted-average
	Number of	Grant Date Fair
	Shares	Value per Share
Unvested at January 31, 2019	—	$	—
Granted	1,310,000	$	6.07
Forfeited, Successor period	(179,000)	$	6.07
Vested restricted stock awards	—	$	—
Unvested at September 30, 2019	1,131,000	$	6.07

During the nine months ended September 30, 2019, the Compensation Committee of the Company granted the following to certain executives of the Company:

·

Time-based RSUs -

o 557,000 are eligible to vest ratably over three years beginning on the respective first anniversary; and,

o

144,000 are eligible to vest 100% on the first anniversary of the date of grant.

·

Performance-based RSUs -

o

367,000 are eligible to vest as follows: a maximum of 50% are eligible to vest on each of March 1, 2020 and March 1, 2021 (provided that at least 75% of the Company’s 2019 Corporate Goals are attained — ratably, between 75% and 100% attainment); and,

o

142,000 of the performance-based RSUs are eligible to vest as follows: a maximum of 100% are eligible to vest on March 1, 2020 (provided that at least 75% of the Company’s 2019 Corporate Goals are attained - ratably, between 75% and 100% attainment).

During the nine months ended September 30, 2019, the Compensation Committee of the Company granted 100,000 time-based RSUs to certain Directors of the Company. The Directors’ RSUs vest ratably over three years.

As of September 30, 2019, unrecognized stock-based compensation expense related to RSUs under the 2019 Plan was $5.1 million which will be recognized over the weighted-average remaining period of 1.8 years.

Stock Option Grants

The following table reflects the Company’s stock option grant activity for the periods indicated:


	Stock Options Outstanding
				Weighted-average
				Remaining
	Number of	Weighted-Average		Contractual
	Shares	Exercise Price		Term (in years)
Outstanding at January 31, 2019	—	$	-
Granted, Successor period	572,000		2.77	9.7
Exercised	—		—
Forfeited or cancelled	(20,000)		2.81
Outstanding at September 30, 2019	552,000	$	2.77
Vested or expected to vest at September 30, 2019	—	$	—
Exercisable at September 30, 2019	—	$	—

The per-share weighted-average grant date fair value of the stock options granted to employees during the Successor period February 1, 2019 through September 30, 2019 and nine months ended September 30, 2018 was $1.92 and $0.50, respectively, per share on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:


	Successor
	Period from
	February 1, 2019
	through
	September 30, 2019

Risk-free interest rate		2.27	%
Expected term of options (in years)		6.00
Expected volatility		80.00	%
Dividend yield		—

The weighted-average valuation assumptions were determined as follows:

·

Risk-free interest rate: The Company based the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term.

·

Expected term of options: The Company estimated the expected life of its employee stock options using the “simplified” method, as prescribed in Staff Accounting Bulletin (“SAB”) No. 107, “Share Based Payments”, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to its lack of sufficient historical data.

·

Expected stock price volatility: The Company estimated the expected volatility based on its actual historical volatility of the Company’s stock price. The Company calculated the historical volatility by using daily closing prices over a period of the expected term of the associated award. A decrease in the expected volatility would have decreased the fair value of the underlying instrument.

·

Expected annual dividend yield: The Company estimated the expected dividend yield based on consideration of its historical dividend experience and future dividend expectations. The Company has not historically declared or paid dividends to stockholders. Moreover, it does not intend to pay dividends in the future, but instead expects to retain any earnings to invest in the continued growth of the business. Accordingly, the Company assumed an expected dividend yield of 0.0%.

As of September 30, 2019, there was $0.9 million of total unrecognized stock-based compensation expense related to stock options under the 2019 Plan, which will be recognized over the weighted-average remaining period of 2.7 years.

Predecessor

The Predecessor Company’s common stock was cancelled and new common stock was issued on the Effective Date. Accordingly, the Predecessor Company’s then existing stock-based compensation awards were also cancelled, which resulted in the recognition of any previously unamortized expense on the date of cancellation. Stock-based compensation for the Successor and Predecessor periods are not comparable.

The Predecessor Company had granted stock-based awards that were cancelled upon emergence from bankruptcy. In conjunction with the cancellation, the Predecessor Company accelerated the unrecognized stock-based compensation expense and recorded $4.1 million of compensation expense in the period from January 1, 2019 to January 31, 2019.

Restructuring and Other Charges

9 Months Ended

Sep. 30, 2019

Restructuring and Other Charges

Restructuring and Other Charges

15. Restructuring and Other Charges

There were no restructuring and other charges during the three months ended September 30, 2019. The following table reflects the Company’s restructuring and other charges for the periods indicated:


	Predecessor		Successor		Predecessor
			Period from		Period from
	Three months		February 1, 2019		January 1, 2019		Nine months
	ended		through		through		ended
(in thousands)	September 30, 2018		September 30, 2019		January 31, 2019		September 30, 2018

Severance	$	—	$	648	$	776	$	—
Professional fees		2,580		—		23		2,580
ARYMO write down of assets		8,184		—		—		8,184
Halo termination fee		3,100		—		—		3,100
Total restructuring and other costs	$	13,864	$	648	$	799	$	13,864

Restructuring and other charges for the Successor period February 1, 2019 through September 30, 2019 reflect severance fees related to the reduction of executive officers. Restructuring and other charges for Predecessor period January 1, 2019 through January 31, 2019 primarily reflect severance costs related to the closure of the Denmark facility.

Reorganization items

9 Months Ended

Sep. 30, 2019

Reorganization items

Reorganization items

16. Reorganization items

There were no reorganization items during the three months ended September 30, 2019 or the three or nine months ended September 30, 2018. The following table reflects reorganization items for the periods indicated. See Note 3—Fresh Start Accounting for further details.


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019
	through		through
(in thousands)	September 30, 2019		January 31, 2019

Professional fees	$	553	$	2,612
Iroko acquisition related fees		50		2,138
Legal fees		—		713
Other reorganization expenses		—		473
Bankruptcy fees		606		42
Gain on extinguishment of debt		—		(29,976)
Revaluation of assets and liabilities		—		(91,171)
Total reorganization items	$	1,209	$	(115,169)

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2019
Commitments and Contingencies
Commitments and Contingencies	17. Commitments and Contingencies Legal Proceedings On January 27, 2017 and February 10, 2017, respectively, two putative securities class actions were filed in the U.S. District Court for the Eastern District of Pennsylvania that named as defendants Egalet Corporation and former officers Robert S. Radie, Stanley J. Musial and Jeffrey M. Dayno (the “Officer Defendants” and together with Egalet Corporation, the “Defendants”). These two complaints, captioned Mineff v. Egalet Corp. et al., No. 2:17-cv-00390-MMB and Klein v. Egalet Corp. et al., No. 2:17-cv-00617-MMB, assert securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) on behalf of putative classes of persons who purchased or otherwise acquired Egalet Corporation securities between December 15, 2015 and January 9, 2017 and seek damages, interest, attorneys’ fees and other expenses. On May 1, 2017, the Court entered an order consolidating the two cases (the “Securities Class Action Litigation”) before it, appointing the Egalet Investor Group (consisting of Joseph Spizzirri, Abdul Rahiman and Kyle Kobold) as lead plaintiff and approving their selection of lead and liaison counsel. On July 3, 2017, the plaintiffs filed their consolidated amended complaint, which named the same Defendants and also asserted claims for purported violations of Sections 10(b) and 20(a) of the Exchange Act. Plaintiffs brought their claims individually and on behalf of a putative class of all persons who purchased or otherwise acquired shares of Egalet between November 4, 2015 and January 9, 2017 inclusive. The consolidated amended complaint based its claims on allegedly false and/or misleading statements and/or failures to disclose information about the likelihood that ARYMO ER would be approved for intranasal abuse-deterrent labeling. The Defendants moved to dismiss the consolidated amended complaint on September 1, 2017 (the “Motion to Dismiss”), the plaintiffs filed their opposition on October 31, 2017, and the Defendants filed their reply on December 8, 2017. The Court heard oral arguments on the Motion to Dismiss on February 20, 2018 and entered an order pursuant to which the plaintiffs filed a motion for leave to file a second amended complaint on March 6, 2018. The Defendants responded on March 20, 2018 and the plaintiffs filed their reply on March 27, 2018. The Court heard oral arguments on the plaintiffs’ motion for leave to file a second amended complaint on July 12, 2018. On August 2, 2018, the Court granted the Defendants’ Motion to Dismiss and dismissed the Securities Class Action Litigation with prejudice. On August 31, 2018, plaintiffs filed their notice of appeal with the United States Court of Appeal for the Third Circuit. On November 7, 2018, the Defendants filed a notice of suggestion of bankruptcy and unopposed motion to stay the appeal as to the Officer Defendants (the appeal was automatically stayed as to the Company upon the Chapter 11 filing). On February 6, 2019, the Officer Defendants filed a Notice of Lifting of Automatic Stay of Proceedings and Discharge of Subordinated Claims, as plaintiffs’ claim against the Company was extinguished as part of the bankruptcy, which restarted the appellate process. On April 22, 2019, plaintiffs filed their brief with the United States Court of Appeals for the Third Circuit. Defendants filed their brief on May 22, 2019 and Plaintiffs filed their reply on June 12, 2019. The Company disputes the allegations in the lawsuit and intend to defend these actions vigorously. The Company cannot determine the likelihood of, nor can it reasonably estimate the range of, any potential loss, if any, from these lawsuits. In March 2018, Novitium Pharma LLC (“Novitium”) notified iCeutica Pty Ltd. and Iroko Pharmaceuticals, LLC that Novitium had submitted an ANDA to FDA requesting permission to manufacture and market a generic version of VIVLODEX® (meloxicam). In the notice, Novitium alleges that its generic product will not infringe any claim of U.S. Patent Nos. 9,526,734; 9,526,734; and 9,649,318. On April 20, 2018, Plaintiffs iCeutica Pty Ltd and Iroko Pharmaceuticals, LLC filed a complaint in the District Court for the District of Delaware alleging infringement of United States Patent Nos. 9,526,734, 9,649,318, and 9,808,468 by Novitium under 35 U.S.C. sections 271(e)(2) and 271(a)-(c). With the Company’s acquisition of certain assets of Iroko and the assignment of Iroko’s exclusive license to U.S. Patent Nos. 9,526,734; 9,526,734; and 9,649,318 to the Company, Egalet was substituted for Iroko as a Plaintiff in this matter. The Company cannot determine the likelihood of, nor can it reasonably estimate the range of, any potential loss, if any, from this lawsuit. On May 1, 2019, the Company was served in a lawsuit entitled International Brotherhood of Electrical Workers Local 728 Family Healthcare Plan v. Allergan, PLC, et al., which was filed in the Philadelphia County Court of Common Pleas (and subsequently coordinated with similar cases and transferred to the Delaware County Court of Common Pleas) on March 29, 2019 in which the Company was named as a defendant. In the lawsuit, plaintiff alleges that the Company, along with numerous other named defendants, manufactured, promoted, sold and distributed branded and generic opioid pharmaceutical products in the Commonwealth of Pennsylvania, State of Florida and the City of Philadelphia. Plaintiffs assert that the defendants’ conduct has exacted a financial burden on the plaintiff which has unnecessarily spent considerably more on costs directly attributable to opioid use and over-use in the Commonwealth of Pennsylvania and City of Philadelphia. The Company disputes the allegations made in this lawsuit and intends to defend these actions vigorously. The Company cannot determine the likelihood of, nor can it reasonably estimate the range of, any potential loss, if any, from this lawsuit. On June 27, 2019, the Company was served in a lawsuit entitled L/S 150 Rouse Boulevard, LP vs. Zyla Life Sciences (f/k/a Egalet Corporation), Iroko Pharmaceuticals, Inc. and Iroko Pharmaceuticals LLC, which was filed in the Philadelphia County Court of Common Pleas on June 26, 2019. The Complaint alleges that Iroko’s assets were fraudulently transferred to the Company in an attempt to avoid further payments under the lease for Iroko’s build-to-suit office space and seeks to impose a constructive trust on the Iroko assets that were transferred to the Company and/or on other Company property. In addition, L/S 150 Rouse was seeking a declaratory judgment that the Company is a successor-in-interest to Iroko and had successor liability for Iroko’s debts to L/S 150 Rouse. The amount of accelerated rent at issue is $8,731,141. L/S 150 Rouse was also seeking attorneys’ fees and litigation fees and costs. Damages related to this matter were indemnifiable under the Purchase Agreement and related documents. Iroko and various CRG entities assumed the defense of this matter and settled the suit with L/S 150 Rouse with no payment by the Company. The suit was dismissed with prejudice on October 9, 2019. On August 7, 2019, the Company filed a lawsuit in the Court of Chancery of the State of Delaware against iCeutica Inc. and iCeutica Pty Ltd. (together, the “Defendants”) seeking, among other things, declaratory and injunctive relief relating to the Defendants’ demand under the iCeutica License Agreement described below, for reimbursement for patent activities in countries outside the United States which the Company has expressly told the Defendants are unreasonable in light of the Company’s current plans. The Company asked the Court to prohibit the Defendants from terminating the license agreement and to toll the cure period under the License Agreement pending resolution of the dispute. On August 30, 2019, the Court granted a Status Quo Order that extended the cure period until 30 days after the date of the Court’s decision on the merits in the case. The Company cannot assess the likelihood of, nor can it reasonably estimate the range of, any potential loss, if any, from this lawsuit. Cosette Pharmaceuticals Supply Agreement On January 31, 2019, as part of Asset Purchase Agreement to acquire products from Iroko, the Company assumed a Collaborative License, Exclusive Manufacture and Global Supply Agreement with Cosette Pharmaceuticals, Inc. (formerly G&W Laboratories, Inc.) (the “Supply Agreement”) for the manufacture and supply of INDOCIN Suppositories to Zyla for commercial distribution in the United States. The Company is obligated to purchase all of its requirements for INDOCIN Suppositories from Cosette Pharmaceuticals, Inc., and are required to meet minimum purchase requirements for the calendar years 2019 and 2020. The term of the Supply Agreement extends through July 31, 2023, and there are no minimum requirements in any of the other subsequent years. Total commitments to Cosette Pharmaceuticals, Inc are $6.5 million in each of years 2019 and 2020. Catalent Pharma Solutions Commercial Supply Agreement On January 31, 2019, as part of the Iroko Products Purchase Agreement, the Company assumed a Commercial Supply Agreement (“CSA”) with Catalent Pharma Solutions (“Catalent”) for the manufacture of certain SOLUMATRIX products. Based on the CSA, the Company is obligated to purchase certain minimum amounts of manufacturing and product maintenance services on an annual basis for the term of the contract (“Minimum Requirement”) through September 2021. Total commitments to Catalent are $1.0 million through the period ending September 2021. Jubilant HollisterStier Manufacturing and Supply Agreement On July 30, 2019, the Company entered into a Manufacturing and Supply Agreement (the “Agreement”) with Jubilant HollisterStier LLC (“JHS”) pursuant to which the Company engaged JHS to provide certain services related to the manufacture and supply of SPRIX® (ketorolac tromethamine) Nasal Spray for the Company’s commercial use. Under the Agreement, JHS will be responsible for supplying a minimum of 75% of the Company’s annual requirements of SPRIX through July 30, 2022. The Company has agreed to purchase a minimum number of batches of SPRIX per calendar year from JHS over the term of the Agreement. Total commitments to JHS are $0.7 million through the period ending July 30, 2022.

Acquisitions and License and Collaboration Agreements	9 Months Ended
Acquisitions and License and Collaboration Agreements	Sep. 30, 2019
Acquisitions and License and Collaboration Agreements
Acquisitions and License and Collaboration Agreements	18. Acquisitions and License and Collaboration Agreements Purchase Agreement with Iroko On October 30, 2018, the Company entered into the Purchase Agreement with Iroko pursuant to which, upon the terms and subject to the conditions set forth therein, the Company acquired certain assets and rights of Iroko, referred to in the Purchase Agreement as the “Transferred Assets,” and assumed certain liabilities of Iroko, referred to in the Purchase Agreement as the “Assumed Liabilities,” including assets related to Iroko’s marketed products, the SOLUMATRIX products under the iCeutica License Agreement and the INDOCIN products. The Iroko Products Acquisition was completed on January 31, 2019. iCeutica License Agreement Pursuant to the Purchase Agreement, on the Effective Date, the Company assumed the rights and obligations of Iroko and its subsidiaries pursuant to the Amended and Restated Nano-Reformulated Compound License Agreement, dated October 30, 2018 (the “iCeutica License”), with iCeutica Inc. and iCeutica Pty Ltd. (collectively, “iCeutica”) to license certain technology and intellectual property related to iCeutica’s SOLUMATRIX® technology, meloxicam and certain other rights of iCeutica. Pursuant to the iCeutica License, iCeutica granted to the Company (as the assignee of Iroko) a sole and exclusive, world-wide right and license under certain iCeutica intellectual property to make, use, sell, offer and import certain products made from the compounds indomethacin, diclofenac, naproxen and meloxicam. In consideration of the grant of the iCeutica License, the Company is obligated to pay to iCeutica a mid-single digit royalty on all Net Sales of any licensed products, including pro rata portions of any combination products that include a licensed product. The iCeutica License will terminate on a country-by-country basis upon the expiration of the last-to-expire of any licensed patent rights in such country, and otherwise twenty years after the date of the first commercial introduction of a licensed product in such country. Either party may terminate the license in its entirety if the other party materially breaches the License Agreement, subject to applicable cure periods. The iCeutica License also contains customary provisions for an agreement of this type related to intellectual property matters, confidentiality, representations and warranties and indemnification. Iroko Royalty Arrangement Pursuant to the Purchase Agreement, on the Effective Date, the Company was also obligated to pay to Iroko a 5% royalty payment on Net Sales of TIVORBEX, ZORVOLEX and the development product acquired on a quarterly basis. In May 2019, the Company agreed to pay approximately $0.8 million to satisfy the royalty payment terminating any obligation for future payments with respect to this agreement. Collaboration and License Agreement with Acura In January 2015, the Company entered into the OXAYDO License Agreement with Acura to commercialize OXAYDO tablets containing Acura’s Aversion Technology. OXAYDO (formerly known as Oxecta®) is currently approved by the FDA for marketing in the United States. in 5 mg and 7.5 mg strengths but was not actively marketed at the time of the OXAYDO License Agreement. Under the terms of the OXAYDO License Agreement, Acura transferred the approved New Drug Application (“NDA”) for OXAYDO to the Company and the Company was granted an exclusive license under Acura’s intellectual property rights for development and commercialization of OXAYDO worldwide in all strengths. Under the OXAYDO License Agreement, Acura will be entitled to a one-time $12.5 million milestone payment when OXAYDO net sales reach a level of $150.0 million in a calendar year. In addition, Acura receives from the Company, a tiered royalty percentage based on sales thresholds. Based on the Company’s current level of net sales, the royalty percentage payable to Acura is in the mid-single digits; however, the percentage may increase in future years in the event the Company achieves the higher sales thresholds set forth in the License Agreement. In addition, in any calendar year in which net sales exceed a specified threshold, Acura is entitled receive a double-digit royalty on all OXAYDO net sales in that year. The Company’s royalty payment obligations commenced on the first commercial sale of OXAYDO and expire, on a country-by-country basis, upon the expiration of the last to expire valid patent claim covering OXAYDO in such country (or if there are no patent claims in such country, then upon the expiration of the last valid claim in the U.S.). Royalties will be reduced upon the entry of generic equivalents, as well for payments required to be made by the Company to acquire intellectual property rights to commercialize OXAYDO, with an aggregate minimum floor. The term of the Acura license agreement expires, in its entirety, upon the final expiration of any such patent claim in any country. OXAYDO is currently sold in the United States and is covered by six U.S. patents that expire between 2023 and 2025. Patents covering OXAYDO in foreign jurisdictions expire in 2024. Either the Company or Acura may terminate the license agreement for certain customary reasons, including cause, insolvency or patent challenge. The Company may terminate the license agreement upon 90 days prior written notice. Purchase Agreement with Luitpold In January 2015, the Company entered into and consummated the transactions contemplated by the SPRIX Purchase Agreement with Luitpold (the “SPRIX Purchase Agreement”), pursuant to which the Company acquired certain assets and liabilities associated with SPRIX Nasal Spray and the Company was assigned an exclusive license with Recordati Ireland Ltd. (“Recordati”) for intranasal formulations of ketorolac tromethamine (the “Licensed Product”), the active ingredient in SPRIX Nasal Spray. The Company is required to pay a fixed, single-digit royalty to Recordati on net sales of the Licensed Product. The exclusive term of the license agreement expires, on a country-by-country basis, on the later of the final expiration of any patent right in such country that contains a valid claim covering the Licensed Product, or ten years from the date of the first commercial sale of the Licensed Product in such country, and thereafter the Company will retain a non-exclusive, perpetual license in such country. In addition, during the exclusivity period with respect to the United States, Canada and Latin America, the royalty payable to Recordati is decreased if no patent containing a valid claim is in force in the country at the time of sale. SPRIX Nasal Spray is currently sold in the United States and the patent expired in December 2018 and the first commercial sale of SPRIX Nasal Spray in the United States occurred in May 2011.

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2019
Income Taxes
Income Taxes	19. Income Taxes The Company had a deferred tax liability of $23,000 and $24,000 as of September 30, 2019 and December 31, 2018, respectively. The Company maintains a full valuation allowance against all net deferred tax assets for federal and foreign purposes except for the net deferred tax liability as management has determined that it is not more likely than not that the Company will realize these future tax benefits. The Tax Cuts and Jobs Act (the "Tax Act"), enacted on December 22, 2017, became effective January 1, 2018. The Tax Act had significant changes to U.S. tax law, including the lowering of U.S. corporate income tax rates, implementing a territorial tax system, imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries and modified the taxation of other income and expense items. Due to the valuation allowance on the Company’s deferred tax assets, these provisions do not have any material impact on the Company. The Tax Act contains additional international provisions which may impact the Company prospectively, including the tax on Global Intangible Low-Taxed Income. The Company does not believe the impact will be material given the historical losses in its international subsidiary and projected future losses.

Summary of Significant Accounting Policies and Basis of Accounting (Policies)	9 Months Ended
	Sep. 30, 2019
Summary of Significant Accounting Policies and Basis of Accounting
Basis of Accounting	Basis of Accounting The unaudited consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Certain information and footnotes normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q. The Company’s consolidation policy requires the consolidation of entities where a controlling financial interest is held. All intercompany balances and transactions have been eliminated in consolidation. Upon emergence from bankruptcy, the Company adopted fresh start accounting in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations, which resulted in the Company becoming a new entity for financial reporting purposes on February 1, 2019. As a result of the adoption of fresh start accounting, the Company’s unaudited consolidated financial statements subsequent to January 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019, any other interim periods or any future year or period. See Note 3 – Fresh Start Accounting for further details on the impact of fresh start accounting on the Company’s unaudited consolidated financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2018 filed on March 29, 2019 with the SEC. References to "Successor" or "Successor Company" relate to the financial position and results of operations of the reorganized Company subsequent to January 31, 2019. References to "Predecessor" or "Predecessor Company" relate to the financial position and results of operations of the Company prior to, and including, January 31, 2019. The Company’s significant accounting policies are described in Note 2 of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K. Since the date of those financial statements, new accounting policies are noted below.
Goodwill	Goodwill Goodwill is calculated as the excess of the reorganization equity value over the fair value of tangible and identifiable intangible assets pursuant to ASC 852 Reorganizations. Goodwill is not amortized but is tested for impairment at the reporting unit level at least annually or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts. A reporting unit is the same as, or one level below, an operating segment. Our operations are currently comprised of a single, entity wide reporting unit. The Company determined that no events have occurred or circumstances changed during the period from February 1, 2019 through September 30, 2019 (Successor) and the period from January 1, 2019 through January 31, 2019 (Predecessor) that would more likely than not reduce the fair value of any of the Company’s reporting units below their respective carrying amounts. However, if conditions deteriorate or there is a change in the business, it may be necessary to record impairment charges in the future.
Acquisition-related contingent consideration	Acquisition-related contingent consideration Pursuant to the Iroko Products Acquisition, the Company has obligations relating to contingent payment consideration for future royalty obligations to Iroko based upon annual INDOCIN product net sales over $20.0 million. The Company recorded the acquisition-date fair value of these contingent liabilities, based on the likelihood of contingent earn-out payments. The earn-out payments are subsequently remeasured to fair value each reporting date. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in the Company’s Consolidated Statements of Operations. The royalty term commenced on the Effective Date and ends on the tenth anniversary of the Effective Date, January 31, 2029.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board FASB issued ASU No. 2016-02 Leases (ASC 842). In July 2018, the FASB issued ASU No. 2018-10, "Codification Improvements to Topic 842, Leases" (ASU 2018-10), which provides narrow amendments to clarify how to apply certain aspects of the new lease standard, and ASU No. 2018-11, "Leases (Topic 842)-Targeted Improvements" (ASU 2018-11), which addressed implementation issues related to the new lease standard. These and certain other lease-related ASUs have generally been codified in ASC 842. ASC 842 supersedes the lease accounting requirements in Accounting Standards Codification Topic 840, Leases (ASC 840). ASC 842 establishes a right-of-use model that requires a lessee to record a right-of-use ("ROU") asset and a lease liability on the balance sheet for all leases. Under ASC 842, leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The standard also requires disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The Company adopted ASC 842 using the modified retrospective transition approach as of the effective date, which allows the Company to not adjust the comparative periods presented. The Company has elected to adopt the package of transition practical expedients and, therefore, has not reassessed whether existing or expired contracts contain a lease, the lease classification for existing or expired leases or the accounting for initial direct costs that were previously capitalized. The Company did not elect the practical expedient to use hindsight for leases existing at the adoption date. Further, the Company does not expect the amendments in ASU 2018-01: Land Easement Practical Expedient to have an effect on its financial position because it did not enter into land easement arrangements. The Company has elected, as an accounting policy, to not recognize ROU assets and lease liabilities for all short-term leases that have a lease term of 12 months or less. Upon adoption, the Predecessor Company recorded a lease liability of $2.5 million with a corresponding ROU asset of $1.9 million for its operating leases. As of the adoption date, the Company had a $0.6 million deferred rent liability which was reversed. The adoption of ASC 842 did not have a material impact on the Company’s Consolidated Statements of Operations or Consolidated Statements of Cash Flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the incurred loss impairment methodology for measuring and recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 will be effective for the Company as of January 1, 2020. The Company does not expect adoption of this ASU to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) which modifies the disclosure requirements of fair value measurements in Topic 820, Fair Value Measurement. For public companies the ASU removes disclosure requirements for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation process for Level 3 fair value measurements. The ASU modifies the disclosure requirements for investments in certain entities that calculate net asset value and clarifies that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The ASU adds the disclosure requirement for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2019 including interim periods within that fiscal year. Early adoption is permitted. The Company does not plan to early adopt this ASU and the Company does not believe there will be a material impact to the financial statements as a result of adopting this ASU.

Fresh Start Accounting (Tables)

9 Months Ended

Sep. 30, 2019

Fresh Start Accounting

Schedule of consolidated balance sheets as a result of implementing the Plan and applying fresh start accounting



			Plan Effects			Fresh Start
(in thousands)	Predecessor		Adjustments			Adjustments			Successor
Assets
Current assets
Cash and cash equivalents	$	36,785	$	(19,738)	(a)	$	—		$	17,047
Marketable securities, available for sale		4,994		—			—			4,994
Accounts receivable		4,141		—			—			4,141
Inventory		2,299		28,364	(b)		3,175	(h)		33,838
Prepaid expenses and other current assets		2,497		1,446	(b)		—			3,943
Other receivables		133		—			—			133
Total current assets		50,849		10,072			3,175			64,096
Intangible assets, net		4,109		90,106	(b)		29,091	(i)		123,306
Restricted cash		400		—			—			400
Property and equipment, net		1,027		3,047	(b)		—			4,074
Right of use asset, net		1,854		—			—			1,854
Goodwill		—		—			58,747	(j)		58,747
Deposits and other assets		1,676		—			—			1,676
Total assets	$	59,915	$	103,225		$	91,013		$	254,153
Liabilities and stockholders’ (deficit) equity
Current liabilities:
Accounts payable		9,839		(1,500)	(a)		—			8,339
Accrued expenses		26,617		20,183	(c)		—			46,800
Deferred revenue		52		—			(52)	(k)		—
Debt - current		—		1,492	(d)		—			1,492
Acquisition-related contingent consideration		—		1,200	(d)		—			1,200
Other current liabilities		1,030		—			—			1,030
Total current liabilities		37,538		21,375			(52)			58,861
Debt - non-current portion, net		—		93,371	(d)		—			93,371
Acquisition-related contingent consideration		—		13,600	(d)		—			13,600
Deferred income tax liabilities		24		—			—			24
Other liabilities		1,463		—			(103)	(k)		1,360
Total liabilities not subject to compromise		39,025		128,346			(155)			167,216

Liabilities subject to compromise		138,884		(138,884)	(e)		—			—

Stockholders’ (deficit) equity:
Common stock		55		(46)	(f)		—			9
Additional paid in capital		276,880		(189,952)	(f)		—			86,928
Other comprehensive income (loss)		866		—			(866)	(l)		—
Accumulated deficit		(395,795)		303,761	(g)		92,034	(l)		—
Total stockholders’ (deficit) equity		(117,994)		113,763			91,168			86,937
Total liabilities and shareholders’ (deficit) equity	$	59,915	$	103,225		$	91,013		$	254,153

Effects of Plan Adjustments

a)

Reflects cash distribution of $18.2 million and reimbursement to Iroko for transaction expenses incurred on the acquisition of $1.5 million.

b)

Reflects preliminary purchase accounting for Iroko Products Acquisition which was treated as a business combination for accounting purposes. Assets acquired and liabilities assumed are recorded at fair value on the acquisition date.



Iroko Purchase Price Allocation	(in thousands)
Iroko Note	$	45,000
Iroko Equity Value in Reorganization		41,630
Fair Value of Contingent Consideration		14,800
Iroko Promissory Note		4,500
Total Iroko Purchase Price	$	105,930

Identifiable Assets / (Liabilities)
Inventory	$	28,364
Prepaid expenses		1,446
Fixed Assets		3,047
Intangible — Indocin		90,106
Product Liability		(17,033)
Total Iroko Purchase Price	$	105,930
Goodwill attributable to Iroko acquisition	$	—

c)

Adjustments to accrued expense reflect i) $2.15 million success fees to be paid after the Effective Date upon the completion of the Iroko Products Acquisition and Chapter 11 proceedings, ii) $1.0 million transaction fees to be paid after the Effective Date for expenses Iroko incurred in connection with the acquisition, and iii) $17.03 million product related liabilities such as rebate, coupon payment, etc. assumed from Iroko.

d)

Reflects obligations entered into upon emergence to finance transactions effectuated by the Plan: i) $90.3 million in 13% Notes, net of discount for interest-free period, and a royalty rights agreement giving the right to receive payment equal to 1.5% of net sales on all reorganized entity products, ii) $4.5 million pursuant to the Interim Promissory Note, and iii) $14.8 million in contingent consideration. Specifically, the contingent consideration represents the fair value of future royalty payments due to Iroko in the event Indocin net sales exceed $20.0 million in any fiscal year between the Effective Date and January 31, 2029 (“Indocin Royalty”). The current portion of the 13% Notes, Interim Promissory Note, and Indocin Royalty is $1.1 million, $0.4 million, and $1.2 million, respectively.

e)

The adjustment to liabilities subject to compromise relates to the extinguishment of the former 13% Notes and associated royalty rights, the 5.50% and 6.50% Notes, and rejected contracts. The former 13% Notes were settled with $50.0 million in aggregate principal amount of the 13% Notes newly issued common stock of the Successor Company representing approximately 19.38% of the common stock then outstanding, and $20.0 million in cash equal to the sum of adequate protection payments of $1.8 million and cash distribution of $18.2 million. The 5.50% and 6.50% Notes were settled with newly issued common stock of the Successor Company representing approximately 31.62% of the common stock then outstanding. Contracts rejected in the Chapter 11 cases did not receive any consideration.

f)

Pursuant to the Plan, the Company’s predecessor common stock was cancelled, and new common stock and warrants were issued. The adjustment eliminated the Predecessor Company’s common stock, additional paid-in capital and recorded the Successor Company’s new $0.001 par value common stock, warrants and additional paid-in capital. The Company issued 9,360,968 shares of new common stock and additional paid-in capital of $60.8 million and $26.1 million of warrants. The warrants were valued using the Black Scholes model. Significant assumptions used in determining the fair value of such warrants at issuance include an assumed share price volatility of 60%, a risk-free rate of return of 2.43% with a 5 year term, and marketability discount between 7% and 20% for the lock-up periods.

g)

This adjustment reflects the net effect of the transaction related to the consummation of the Plan on Predecessor’s accumulated deficit. The table below provides a summary of the adjustments:


Liabilities subject to compromise	(in thousands)
13% Senior Secured Debt	$	85,438
5.50% Convertible Notes		24,650
6.50% Convertible Notes		23,888
Accrued interest		2,464
Accrued royalty rights ("Existing Senior Secured Royalty Rights")		2,119
Accrued expenses		325
Liabilities subject to compromise	$	138,884

Consideration given pursuant to the Plan:
Issuance of warrants	$	(14,303)
Issuance of new common stock		(31,004)
Issuance of new Senior Secured Notes		(45,363)
Cash payment		(18,238)
Total consideration given pursuant to the Plan	$	(108,908)

Gain on extinguishment of prepetition liabilities		29,976

Other adjustments to accumulated deficit:
Success fees		(2,150)
Reimbursement to Iroko of acquisition expense		(1,000)
Cancellation of Predecessor stock-based compensation expense		(3,814)
Tax related expenses on gain on extinguishment of prepetition liabilities		—
Total other adjustments		(6,964)

Extinguishment of Predecessor Common Stock and Additional-paid-in-capital		280,749
Total adjustments to accumulated deficit:	$	303,761

Fresh Start Adjustments

h)

A $3.2 million adjustment was recorded to adjust the Company’s legacy inventory, excluding inventory assumed from Iroko, to fair value. The Company obtained an independent third-party valuation specialist’s assistance in the determination of the fair values of inventory. The inventory valuation included an analysis of net realizable value of the work in progress inventory and finished goods. Finished goods are valued using the comparative sales method as a function of the estimated selling price less the sum of any cost to complete, costs of disposal, holding costs, and a reasonable profit allowance. Carrying value of raw materials and packaging is assumed to represent a reasonable proxy for fair value.

i)

Reflects fresh start adjustments recorded to adjust intangible assets related to the Company’s legacy products, SPRIX and OXAYDO, to fair value. The Company obtained independent-third party valuation specialist’s assistance in determination of the fair values of intangibles. SPRIX and OXAYDO intellectual property values are valued using the multi period excess earnings method under the income approach. The multi-period excess earnings method measures economic benefit indirectly by calculating the income attributable to an asset after appropriate returns are paid to complementary assets used in conjunction with the subject asset to produce contributory asset charges. Key components of the excess earnings methods include revenue, adjusted operating margin, charges for use of other assets, and discount rate.

j)

Adjustment to record the reorganization value of assets in excess of amounts allocated to identifiable tangible and intangible assets, also referred to as Successor Company goodwill. Estimated business enterprise value is developed for the combined company upon emergence from bankruptcy and therefore allocated to both identified tangible and intangible assets from the Predecessor Company and assumed from acquisition of Iroko.


	(in thousands)
Estimated business enterprise value	$	196,600
Add: Fair value of liabilities excluded from enterprise value		57,552
Less: Fair value of tangible assets		(72,099)
Less: Fair value of identified intangible assets		(123,306)
Reorganization value of assets in excess of amounts allocated to identified tangible and intangible assets (Successor company goodwill)	$	58,747

Total Successor Goodwill	$	58,747

k)

Adjustments to eliminate deferred revenue and related product advance.

l)

The Predecessor Company’s accumulated deficit and accumulated other comprehensive income was eliminated in conjunction with the adoption of fresh start accounting pursuant to ASC 852, Reorganization. The Predecessor Company recognized a $91.2 million gain related to the fresh start accounting adjustments related for revaluation of assets and liabilities as follows:


	(in thousands)
Establish Successor goodwill attributable to emergence from Chapter 11	$	58,747
Intangible fair value adjustments		29,091
Inventory fair value adjustments		3,175
Deferred revenue and product advance adjustments		155
Gain on fresh start adjustment for revaluation of assets and liabilities		91,168

Eliminate Predecessor Company Other comprehensive income		866
Total adjustment to stockholders' deficit	$	92,034

Revenue from Contracts with Customers (Tables)

9 Months Ended

Sep. 30, 2019

Revenue From Contracts with Customers

Schedule of disaggregation of revenue


	Successor		Predecessor		Successor		Predecessor
					Period from		Period from
	Three months		Three months		February 1, 2019		January 1, 2019		Nine months ended
	ended		ended		through		through		ended
(in thousands)	September 30, 2019		September 30, 2018		September 30, 2019		January 31, 2019		September 30, 2018
Product lines
INDOCIN products	$	11,240	$	—	$	30,844	$	—	$	—
SPRIX Nasal Spray		6,419		6,097		18,300		1,354		16,314
SOLUMATRIX products		1,344		—		6,166		—		—
OXAYDO		3,383		1,882		4,920		421		4,831
ARYMO ER		—		174		—		—		712
Total	$	22,386	$	8,153	$	60,230	$	1,775	$	21,857

Schedule of net product sales allowance and reserve


	Successor
	Fees and
	distribution		Co-pay
(in thousands)	costs		assistance		Rebates		Returns		Total
Balances at January 31, 2019	$	605	$	19,330	$	5,498	$	7,964	$	33,397
Allowances for current period sales		22,680		115,481		21,044		4,655		163,860
Payment and Adjustment of Assumed liabilities Iroko Products Acquisition		—		(5,791)		(2,799)		(836)		(9,426)
Credits or payments made for prior period sales		(605)		(13,540)		(2,699)		(1,562)		(18,406)
Credits or payments made for current period sales		(17,032)		(93,046)		(14,370)		—		(124,448)
Balances at September 30, 2019	$	5,648	$	22,434	$	6,674	$	10,221	$	44,977

Total gross product sales									$	224,090

Total provision for product sales allowances and accruals as a percentage of total gross sales										73%



	Predecessor
	Fees and
	distribution		Co-pay
(in thousands)	costs		assistance		Rebates		Returns		Total
Balances at December 31, 2018	$	462	$	13,326	$	2,664	$	2,020	$	18,472
Allowances for current period sales		568		6,593		594		28		7,783
Assumed liabilities Iroko Products Acquisition		—		5,791		2,799		5,944		14,534
Credits or payments made for prior period sales		(361)		(6,380)		(559)		(28)		(7,328)
Credits or payments made for current period sales		(64)		—		—		—		(64)
Balances at January 31, 2019	$	605	$	19,330	$	5,498	$	7,964	$	33,397

Total gross product sales									$	9,559

Total provision for product sales allowances and accruals as a percentage of total gross sales										81%


	Predecessor
	Fees and
	distribution		Co-pay
(in thousands)	costs		assistance		Rebates		Returns		Total
Balances at December 31, 2017	$	595	$	3,644	$	579	$	—	$	4,818
Adjustment for ASU 2014-09		—		4,221		656		—		4,877
Allowances for current period sales		6,038		52,441		5,383		2,729		66,591
Adjustment related to prior period sales		—		—		180		—		180
Credits or payments made for prior period sales		(555)		(7,866)		(1,235)		—		(9,656)
Credits or payments made for current period sales		(5,448)		(40,081)		(3,341)		(650)		(49,520)
Balances at September 30, 2018	$	630	$	12,359	$	2,222	$	2,079	$	17,290

Total gross product sales									$	88,628

Total provision for product sales allowances and accruals as a percentage of total gross sales										75%

Investments (Tables)

9 Months Ended

Sep. 30, 2019

Investments

Schedule of marketable securities


(in thousands)	Cost Basis		Unrealized Gains		Unrealized Losses		Fair Value
Corporate notes and bonds	$	4,990	$	—	$	(2)	$	4,988
Total	$	4,990	$	—	$	(2)	$	4,988

Inventory (Tables)

9 Months Ended

Sep. 30, 2019

Inventory

Schedule of components of inventory


	Successor		Predecessor
	September 30,		December 31,
(in thousands)	2019		2018
Raw materials	$	1,449	$	1,374
Work in process		3,038		665
Finished goods		5,051		600
Total	$	9,538	$	2,639

Intangible Assets and Goodwill (Tables)

9 Months Ended

Sep. 30, 2019

Intangible Assets

Schedule of indefinite-lived intangible assets

The following table reflects the balance of the intangible assets of the Successor Company as of September 30, 2019:


	Gross				Net		Remaining Useful
	Intangible		Accumulated		Intangible		Life
(in thousands)	Assets		Amortization		Assets		(in years)
INDOCIN product rights	$	90,106	$	(6,674)	$	83,432	8.34
SPRIX Nasal Spray product rights		31,900		(2,363)		29,537	8.34
OXAYDO product rights		1,300		(289)		1,011	2.34
Goodwill		58,747		—		58,747	N/A
Total	$	182,053	$	(9,326)	$	172,727

The following table reflects the balance of the intangible assets of the Predecessor Company as of December 31, 2018


	Gross				Net		Remaining Useful
	Intangible		Accumulated		Intangible		Life
(in thousands)	Assets		Amortization		Assets		(in years)
OXAYDO product rights	$	7,623	$	(4,330)	$	3,293	3.00
SPRIX Nasal Spray product rights		4,831		(3,843)		988	1.00
Total	$	12,454	$	(8,173)	$	4,281

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2019

Accrued Expenses

Schedule of accrued expenses

:



	Successor		Predecessor
(in thousands)	September 30,		December 31,
	2019		2018
Sales allowances	$	38,603	$	17,174
Interest		2,714		1,049
Payroll and related		2,249		3,567
Professional services		1,680		1,847
Sales and marketing		871		—
Restructuring		733		81
Royalties		710		34
Manufacturing services		264		—
Other		1,801		832
	$	49,625	$	24,584

Debt (Tables)

9 Months Ended

Sep. 30, 2019

Debt

Summary of the Successor Company's debt


	September 30, 2019
(in thousands)
Series A-1 Notes	$	50,000
Series A-2 Notes		45,000
Royalty rights obligation		5,769
Credit agreement		5,000
Interim promissory note		4,500
		110,269
Unamortized debt discounts		(5,820)
Unamortized deferred financing fees		(864)
Carrying value		103,585
Less: current portion of long-term debt		(6,990)
Net, long-term debt	$	96,595

Schedule of unamortized discounts and deferred financing fees on debt


			Deferred
(in thousands)	Discounts		Financing Fees
Series A-1 Notes, interest holiday	$	2,414	$	—
13% Notes, Royalty Rights Obligation		3,234		—
Credit agreement		172		864
	$	5,820	$	864

Schedule of Company's estimated future principal payments


(in thousands)
Remainder of 2019	$	—
2020		6,558
2021		4,594
2022		12,007
2023		9,848
2024		71,493

Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases

Schedule of components of lease expense


	Successor		Successor		Predecessor
			Period from		Period from
	Three months		February 1, 2019		January 1, 2019
	ended		through		through
(in thousands)	September 30, 2019		September 30, 2019		January 31, 2019

Operating lease expense:
Fixed lease cost	$	252	$	598	$	69
Total operating lease expense	$	252	$	598	$	69

Schedule of supplemental balance sheet information


		Successor
(in thousands)	Location in Balance Sheet	As of September 30, 2019
Operating leases
Operating lease ROU asset	ROU asset - operating lease	$	2,885

Current operating lease liabilities	Other current liabilities		976
Non-current operating lease liabilities	Other liabilities		2,329
Total operating lease liability		$	3,305

Schedule of supplemental lease term and discount rate information


	Successor
	As of September 30, 2019

Weighted-average remaining lease term		3.18	years

Weighted-average discount rate		8.00%

Schedule of supplemental cash flow information


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019
	through		through
(in thousands)	September 30, 2019		January 31, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	846	$	—

Right-of-use assets obtained in exchange for lease obligations:
New operating lease - Fleet vehicles	$	2,026	$	2,478
Termination of operating lease -Fleet vehicles		(677)		—

Schedule of future minimum lease payments


(in thousands)
2019 (excludes the nine months ended September 30, 2019)	$	318
2020		1,274
2021		1,227
2022		634
2023		232
Thereafter		—
Total lease payments		3,685
Less: Imputed interest		(380)
Total minimum lease payments	$	3,305

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Measurements

Schedule of information about each major category of financial assets and liabilities measured at fair value on a recurring basis


(in thousands)	Fair Value Measurements as of September 30, 2019
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents (money market funds)	$	76	$	—	$	—	$	76
Total assets	$	76	$	—	$	—	$	76

Liabilities
Acquisition-related contingent consideration	$	—	$	—	$	18,300	$	18,300
Total liabilities	$	—	$	—	$	18,300	$	18,300


(in thousands)	Fair Value Measurements as of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents (money market funds)	$	22,996	$	—	$	—	$	22,996
Marketable securities, available-for-sale		—		4,988		—		4,988
Total assets	$	22,996	$	4,988	$	—	$	27,984

Summary of changes in the fair value of Level 3 liabilities


(in thousands)

Balance at January 31, 2019	$	14,800
Change in fair value of contingent consideration		3,500
Balance at September 30, 2019	$	18,300

Net (Loss) Per Common Share (Tables)

9 Months Ended

Sep. 30, 2019

Net (Loss) Income Per Common Share

Schedule of computation of basic and diluted net loss per share


	Successor		Predecessor		Successor		Predecessor
					Period from		Period from
	Three months		Three months		February 1, 2019		January 1, 2019		Nine months
	ended		ended		through		through		ended
(in thousands, except share and per share data)	September 30, 2019		September 30, 2018		September 30, 2019		January 31, 2019		September 30, 2018

Basic and diluted net income (loss) per common share calculation:
Net (loss) income per share of common stock—basic and diluted	$	(10,290)	$	(51,227)	$	(40,416)	$	107,240	$	(75,540)
Weighted average common stock outstanding		14,333,332		55,192,542		14,333,332		56,547,101		51,944,358
Net (loss) income per share of common stock—basic and diluted	$	(0.72)	$	(0.93)	$	(2.82)	$	1.90	$	(1.45)

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Stock-Based Compensation

Schedule of shares available for future grant


Shares initially reserved under the 2019 Plan		2,150,000
Time-based restricted stock units granted under the 2019 Plan		(801,000)
Performance-based restricted stock units granted under the 2019 Plan		(509,000)
Stock options granted under the Plan		(572,000)
Restricted stock units and stock options forfeited		199,000
Remaining shares available for future grant		467,000

Schedule of stock-based compensation expense recognized



	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Nine months
	through		through		ended
	September 30, 2019		January 31, 2019		September 30, 2018
(in thousands)
General and administrative	$	1,832	$	3,466	$	2,749
Sales and marketing		57		436		175
Research and development		—		223		170
Total stock-based compensation expense	$	1,889	$	4,125	$	3,094

Schedule of Stock options outstanding under Equity compensation plans


	Stock Options Outstanding
				Weighted-average
				Remaining
	Number of	Weighted-Average		Contractual
	Shares	Exercise Price		Term (in years)
Outstanding at January 31, 2019	—	$	-
Granted, Successor period	572,000		2.77	9.7
Exercised	—		—
Forfeited or cancelled	(20,000)		2.81
Outstanding at September 30, 2019	552,000	$	2.77
Vested or expected to vest at September 30, 2019	—	$	—
Exercisable at September 30, 2019	—	$	—

Schedule of weighted-average assumptions


	Successor
	Period from
	February 1, 2019
	through
	September 30, 2019

Risk-free interest rate		2.27	%
Expected term of options (in years)		6.00
Expected volatility		80.00	%
Dividend yield		—

Summary of status and change in restricted stock awards


		Weighted-average
	Number of	Grant Date Fair
	Shares	Value per Share
Unvested at January 31, 2019	—	$	—
Granted	1,310,000	$	6.07
Forfeited, Successor period	(179,000)	$	6.07
Vested restricted stock awards	—	$	—
Unvested at September 30, 2019	1,131,000	$	6.07

Restructuring and Other Charges (Tables)

9 Months Ended

Sep. 30, 2019

Restructuring and Other Charges

Schedule of restructuring and other charges


	Predecessor		Successor		Predecessor
			Period from		Period from
	Three months		February 1, 2019		January 1, 2019		Nine months
	ended		through		through		ended
(in thousands)	September 30, 2018		September 30, 2019		January 31, 2019		September 30, 2018

Severance	$	—	$	648	$	776	$	—
Professional fees		2,580		—		23		2,580
ARYMO write down of assets		8,184		—		—		8,184
Halo termination fee		3,100		—		—		3,100
Total restructuring and other costs	$	13,864	$	648	$	799	$	13,864

Reorganization items (Tables)

9 Months Ended

Sep. 30, 2019

Reorganization items

Schedule of reorganization items


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019
	through		through
(in thousands)	September 30, 2019		January 31, 2019

Professional fees	$	553	$	2,612
Iroko acquisition related fees		50		2,138
Legal fees		—		713
Other reorganization expenses		—		473
Bankruptcy fees		606		42
Gain on extinguishment of debt		—		(29,976)
Revaluation of assets and liabilities		—		(91,171)
Total reorganization items	$	1,209	$	(115,169)

Organization and Description of the Business (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) product	Jan. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Liquidity [Abstract]
Number of Products \| product	7
Working capital	$ 19,800
Accumulated deficit	$ (40,416)	$ (395,795)	$ (388,853)
Substantial doubt about going concern of the company within one year	true

Summary of Significant Accounting Policies and Basis of Accounting - Net product sales, Product sale allowances and Collaboration revenues (Details) - USD ($) $ in Thousands	Jan. 31, 2019	Sep. 30, 2019	Feb. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right of use assets, net	$ 1,854	$ 2,885	$ 1,854
Lease Liability		$ 3,305
Accounting Standards Update 2016-02 \| Measurement period adjustments
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right of use assets, net	2,500
Lease Liability	1,900
Deferred Rent	(600)
Iroko
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Threshold Net Sales for Future Royalty Payments	$ 20,000

Fresh Start Accounting (Details) - USD ($) $ in Millions	8 Months Ended	13 Months Ended
Fresh Start Accounting (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jan. 31, 2019
Fresh-Start Adjustment [Line Items]
Predecessor Successor Fixed list	Successor	Predecessor
Percentage of voting shares of emerging entity to qualify for fresh-start accounting		50.00%
Enterprise value		$ 196.6
Terminal Value		$ 217.3
Discount rate
Fresh-Start Adjustment [Line Items]
Percentage of voting shares of emerging entity to qualify for fresh-start accounting		15.10%
Growth rate
Fresh-Start Adjustment [Line Items]
Percentage of voting shares of emerging entity to qualify for fresh-start accounting		3.00%
Maximum
Fresh-Start Adjustment [Line Items]
Enterprise value		$ 200.0
Minimum
Fresh-Start Adjustment [Line Items]
Enterprise value		$ 162.0

Fresh Start Accounting - Consolidated Statement of Financial Position (Details) - USD ($) $ in Thousands	8 Months Ended	13 Months Ended
	Sep. 30, 2019	Jan. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Feb. 01, 2019	Jan. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 18,594	$ 36,785			$ 17,047		$ 35,323
Marketable securities, available for sale		4,994			4,994		4,988
Accounts receivable, net	26,578	4,141			4,141		8,006
Inventory	9,538	2,299			33,838		2,639
Prepaid expenses and other current assets	1,571	2,497			3,943		2,715
Other receivables		133			133		846
Total current assets	56,281	50,849			64,096		54,517
Intangible assets, net	113,980	4,109			123,306		4,281
Restricted cash	400	400			400		400
Property and equipment, net	3,513	1,027			4,074		1,059
Right of use assets, net	2,885	1,854			1,854
Goodwill.	58,747				58,747
Deposits and other assets	3,242	1,676			1,676		1,676
Total assets	239,048	59,915			254,153		61,933
Current liabilities:
Accounts payable	15,807	9,839			8,339		8,561
Accrued expenses	49,625	26,617			46,800		24,584
Deferred revenue	0	52					0
Debt - current, net	6,990				1,492
Acquisition-related contingent consideration	2,700				1,200
Other current liabilities	976	1,030			1,030
Total current liabilities	76,098	37,538			58,861		33,145
Debt - non-current portion, net	92,630				93,371
Acquisition-related contingent consideration	15,600				13,600
Deferred income tax liability	23	24			24		24
Other liabilities	2,329	1,463			1,360		536
Total liabilities not subject to compromise	190,645	39,025			167,216		33,705
Liabilities subject to compromise		138,884					139,588
Stockholders' equity (deficit):
Common stock	9	55			9		55
Additional paid-in capital	88,817	276,880			86,928		276,569
Other comprehensive income (loss)	(7)	866					869
Accumulated deficit	(40,416)	(395,795)					(388,853)
Total stockholders' equity (deficit)	48,403	86,937	$ 57,679	$ 76,505		$ (117,994)	(111,360)	$ (92,295)	$ (43,355)	$ (33,046)	$ (39,375)
Total liabilities and stockholders’ equity	$ 239,048	$ 59,915			$ 254,153		$ 61,933
Predecessor Successor Fixed list	Successor	Predecessor
Plan Effects Adjustments
Current assets:
Cash and cash equivalents		$ (19,738)
Inventory		28,364
Prepaid expenses and other current assets		1,446
Total current assets		10,072
Intangible assets, net		90,106
Property and equipment, net		3,047
Total assets		103,225
Current liabilities:
Accounts payable		(1,500)
Accrued expenses		20,183
Debt - current, net		1,492
Acquisition-related contingent consideration		1,200
Total current liabilities		21,375
Debt - non-current portion, net		93,371
Acquisition-related contingent consideration		13,600
Total liabilities not subject to compromise		128,346
Liabilities subject to compromise		138,884
Stockholders' equity (deficit):
Common stock		(46)
Additional paid-in capital		(189,952)
Accumulated deficit		303,761
Total stockholders' equity (deficit)		113,763
Total liabilities and stockholders’ equity		103,225
Fresh Start Adjustments
Current assets:
Inventory		3,175
Total current assets		3,175
Intangible assets, net		29,091
Goodwill.		58,747
Total assets		91,013
Current liabilities:
Deferred revenue		(52)
Total current liabilities		(52)
Other liabilities		(103)
Total liabilities not subject to compromise		(155)
Stockholders' equity (deficit):
Other comprehensive income (loss)		(866)
Accumulated deficit		92,034
Total stockholders' equity (deficit)		91,168
Total liabilities and stockholders’ equity		$ 91,013

Fresh Start Accounting - Cash and cash equivalents (Details) $ in Millions	Jan. 31, 2019 USD ($)
Fresh-Start Adjustment [Line Items]
Cash and cash equivalents	$ 18.2
Iroko
Fresh-Start Adjustment [Line Items]
Cash and cash equivalents	$ 1.5

Fresh Start Accounting - Iroko Acquisition (Details) - USD ($) $ in Thousands	1 Months Ended
	Jan. 31, 2019	Sep. 30, 2019	Feb. 01, 2019
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Goodwill attributable to Iroko acquisition		$ 58,747	$ 58,747
Iroko \| Plan Effects Adjustments
Iroko Purchase Price Allocation
Iroko Promissory Note	$ 45,000
Iroko Equity Value in Reorganization	41,630
Fair Value of Contingent Consideration	14,800
Total Iroko Purchase Price	105,930
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Inventory	28,364
Prepaid expenses	1,446
Fixed Assets	3,047
Intangible - Indocin	90,106
Product Liability	(17,033)
Total Iroko Purchase Price	105,930
Iroko \| Plan Effects Adjustments \| Unsecured Promissory Note
Iroko Purchase Price Allocation
Iroko Promissory Note	$ 4,500

Fresh Start Accounting - Adjustments to accrued expense (Details) $ in Thousands	Jan. 31, 2019 USD ($)
Transaction Fees to be Paid [Member]
Fresh-Start Adjustment [Line Items]
Adjustments to accrued expense	$ 1,000
Iroko \| Plan Effects Adjustments \| Success Fees to be Paid [Member]
Fresh-Start Adjustment [Line Items]
Adjustments to accrued expense	2,150
Iroko \| Plan Effects Adjustments \| Product Related Liabilities [Member]
Fresh-Start Adjustment [Line Items]
Adjustments to accrued expense	$ 17,030

Fresh Start Accounting - Obligations (Details) $ in Millions		1 Months Ended
	Jan. 31, 2019 USD ($)	Jan. 31, 2019 USD ($)
Iroko
Fresh-Start Adjustment [Line Items]
Threshold net sales for future royalty payments	$ 20.0
Plan Effects Adjustments
Fresh-Start Adjustment [Line Items]
Long term debt	$ 90.3	$ 90.3
Interest rate (as a percent)	13.00%	13.00%
Percentage of royalty right payment to aggregate net sale		1.50%
Contingent consideration	$ 14.8	$ 14.8
Royalty	1.2	1.2
Plan Effects Adjustments \| Iroko
Fresh-Start Adjustment [Line Items]
Threshold net sales for future royalty payments		20.0
Plan Effects Adjustments \| First lien
Fresh-Start Adjustment [Line Items]
Contingent consideration	1.1	1.1
Plan Effects Adjustments \| Unsecured Promissory Note
Fresh-Start Adjustment [Line Items]
Long term debt	4.5	4.5
Contingent consideration	$ 0.4	$ 0.4

Fresh Start Accounting - Liabilities subject to compromise (Details) - USD ($) $ in Millions		1 Months Ended
	Jan. 31, 2019	Jan. 31, 2019	Sep. 30, 2019	Dec. 31, 2017	Jan. 31, 2017
13% Notes
Fresh-Start Adjustment [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			13.00%		13.00%
5.50% Notes
Fresh-Start Adjustment [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			5.50%
6.50% Notes
Fresh-Start Adjustment [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			6.50%
Face Value				$ 23.9
Plan Effects Adjustments
Fresh-Start Adjustment [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	13.00%	13.00%
Plan Effects Adjustments \| 13% Notes
Fresh-Start Adjustment [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	13.00%	13.00%
Percentage of new equity issued for settlement		19.38%
Repayment of adequate protection and cash distribution	$ 20.0	$ 20.0
Repayment of adequate protection		1.8
Repayment of first lien cash distribution		$ 18.2
Plan Effects Adjustments \| 5.50% Notes and 6.50% Notes
Fresh-Start Adjustment [Line Items]
Percentage of new equity issued for settlement		31.62%
Plan Effects Adjustments \| 5.50% Notes
Fresh-Start Adjustment [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.50%	5.50%
Percentage of new equity issued for settlement	16.10%
Plan Effects Adjustments \| 6.50% Notes
Fresh-Start Adjustment [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	6.50%	6.50%
Percentage of new equity issued for settlement	15.50%
Plan Effects Adjustments \| New Secured Notes [Member]
Fresh-Start Adjustment [Line Items]
Face Value	$ 50.0	$ 50.0

Fresh Start Accounting - Common stock (Details) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2019 USD ($) $ / shares shares	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2019 $ / shares	Dec. 31, 2018 $ / shares
Fresh-Start Adjustment [Line Items]
Common stock, par value (in dollars per share) \| $ / shares					$ 0.001	$ 0.001
Shares issued		$ 181	$ 886	$ 4,157
Additional Paid-in Capital
Fresh-Start Adjustment [Line Items]
Shares issued		$ 181	$ 886	$ 4,151
Plan Effects Adjustments
Fresh-Start Adjustment [Line Items]
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001
Shares issued (in shares) \| shares	9,360,968
Shares issued	$ (31,004)
Plan Effects Adjustments \| Additional Paid-in Capital
Fresh-Start Adjustment [Line Items]
Shares issued	60,800
Warrants	$ 26,100
Expected volatility \| Plan Effects Adjustments
Fresh-Start Adjustment [Line Items]
Warrants measurement input	60.000
Risk-free interest rate \| Plan Effects Adjustments
Fresh-Start Adjustment [Line Items]
Warrants measurement input	2.4300
Expected term \| Plan Effects Adjustments
Fresh-Start Adjustment [Line Items]
Term					5 years
Measurement Input, Discount for Lack of Marketability [Member] \| Plan Effects Adjustments \| Minimum
Fresh-Start Adjustment [Line Items]
Warrants measurement input	7.00
Measurement Input, Discount for Lack of Marketability [Member] \| Plan Effects Adjustments \| Maximum
Fresh-Start Adjustment [Line Items]
Warrants measurement input	20.00

Fresh Start Accounting - Accumulated deficit (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Dec. 31, 2018	Jan. 31, 2017
Liabilities Subject to Compromise
Liabilities subject to compromise	$ 138,884					$ 139,588
Consideration given pursuant to the Plan
Issuance of warrants	14,303
Issuance of new common stock		$ 181	$ 886	$ 4,157
Gain on extinguishment of prepetition liabilities	29,976
Other adjustments to accumulated deficit"
Extinguishment of Predecessor Common Stock and Additional-paid-in-capital	$ 280,744
Plan Effects Adjustments
Liabilities Subject to Compromise
Interest rate (as a percent)	13.00%
Accrued interest	$ 2,464
Accrued royalty rights ("Existing Senior Secured Royalty Rights")	2,119
Accrued expenses	325
Liabilities subject to compromise	138,884
Consideration given pursuant to the Plan
Issuance of warrants	(14,303)
Issuance of new common stock	(31,004)
Issuance of new Senior Secured Notes	(45,363)
Cash payment	(18,238)
Total consideration given pursuant to the Plan	(108,908)
Gain on extinguishment of prepetition liabilities	29,976
Other adjustments to accumulated deficit"
Success fees	(2,150)
Reimbursement to Iroko of Acquisition expense	(1,000)
Cancellation of Predecessor stock-based compensation expense	(3,814)
Other adjustments to accumulated deficit"	(6,964)
Extinguishment of Predecessor Common Stock and Additional-paid-in-capital	280,749
Total adjustments to accumulated deficit	$ 303,761
13% Notes
Liabilities Subject to Compromise
Interest rate (as a percent)					13.00%		13.00%
13% Notes \| Plan Effects Adjustments
Liabilities Subject to Compromise
Interest rate (as a percent)	13.00%
Debt	$ 85,438
5.50% Notes
Liabilities Subject to Compromise
Interest rate (as a percent)					5.50%
5.50% Notes \| Plan Effects Adjustments
Liabilities Subject to Compromise
Interest rate (as a percent)	5.50%
Debt	$ 24,650
6.50% Notes
Liabilities Subject to Compromise
Interest rate (as a percent)					6.50%
6.50% Notes \| Plan Effects Adjustments
Liabilities Subject to Compromise
Interest rate (as a percent)	6.50%
Debt	$ 23,888

Fresh Start Accounting - Inventory (Details) - Fresh Start Adjustments $ in Thousands	Jan. 31, 2019 USD ($)
Fresh-Start Adjustment [Line Items]
Inventory	$ 3,175
Iroko
Fresh-Start Adjustment [Line Items]
Inventory	$ 3,200

Fresh Start Accounting - Goodwill (Details) - Fresh Start Adjustments $ in Thousands	Jan. 31, 2019 USD ($)
Fresh-Start Adjustment [Line Items]
Enterprise value	$ 196,600
Add: Fair value of liabilities excluded from enterprise value	57,552
Less: Fair value of tangible assets	(72,099)
Less: Fair value of identified intangible assets	(123,306)
Reorganization value of assets in excess of amounts allocated to identified tangible and intangible assets (Successor company goodwill)	58,747
Total Successor Goodwill	$ 58,747

Fresh Start Accounting - Adjustment to Stockholders' Deficit (Details) - Fresh Start Adjustments $ in Thousands	1 Months Ended
	Jan. 31, 2019 USD ($)
Fresh-Start Adjustment [Line Items]
Establish Successor goodwill attributable to emergence from Chapter 11	$ 58,747
Intangible fair value adjustments	29,091
Inventory fair value adjustments	3,175
Deferred revenue and product advance adjustments	155
Gain on fresh start adjustment for revaluation of assets and liabilities	91,168
Eliminate Predecessor Company Other comprehensive income	866
Total adjustment to stockholders' deficit	$ 92,034

Revenue from Contracts with Customers - Disaggregation of Revenue (Details) $ in Thousands	1 Months Ended	3 Months Ended		8 Months Ended	9 Months Ended		13 Months Ended
	Jan. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2019	Sep. 30, 2018 USD ($)	Jan. 31, 2019
Disaggregation of Revenue [Line Items]
Total	$ 1,775	$ 22,386	$ 8,153	$ 60,230		$ 21,857
Cash discounts					2.00
Co pay sales allowance reduced		2,300
Predecessor Successor Fixed list				Successor			Predecessor
INDOCIN
Disaggregation of Revenue [Line Items]
Total		11,240		$ 30,844
SPRIX Nasal Spray
Disaggregation of Revenue [Line Items]
Total	1,354	6,419	6,097	18,300		16,314
SOLUMATRIX Products
Disaggregation of Revenue [Line Items]
Total		1,344		6,166
OXAYDO tablets
Disaggregation of Revenue [Line Items]
Total	$ 421	$ 3,383	1,882	$ 4,920		4,831
ARYMO ER
Disaggregation of Revenue [Line Items]
Total			$ 174			$ 712
Minimum
Disaggregation of Revenue [Line Items]
Period in which payments for invoices are due					30 days
Maximum
Disaggregation of Revenue [Line Items]
Period in which payments for invoices are due					65 days

Revenue from Contracts with Customers - Reserves for Variable Consideration (Details) $ in Thousands	1 Months Ended	3 Months Ended	8 Months Ended	9 Months Ended	13 Months Ended
	Jan. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Jan. 31, 2019 USD ($)
Net product sales allowance and reserve [Abstract]
Balances at beginning of period	$ 18,472		$ 33,397	$ 4,818	$ 4,818
Allowances for current period sales	7,783		163,860	66,591
Payment and Adjustment of Assumed liabilities Iroko Products Acquisition			(9,426)
Assumed liabilities Iroko Products Acquisition	14,534
Adjustments				180
Credits or payments mad for prior period sales	(7,328)		(18,406)	(9,656)
Credits or payments made for current period sales	(64)		(124,448)	(49,520)
Balances at end of period	33,397	$ 44,977	44,977	17,290	$ 33,397
Total gross product sales	$ 9,559		$ 224,090	$ 88,628
Total provision for product sales allowances and accruals as a percentage of total gross sales	81	73		75
Predecessor Successor Fixed list			Successor		Predecessor
Fees and distribution costs
Net product sales allowance and reserve [Abstract]
Balances at beginning of period	$ 462		$ 605	$ 595	$ 595
Allowances for current period sales	568		22,680	6,038
Credits or payments mad for prior period sales	(361)		(605)	(555)
Credits or payments made for current period sales	(64)		(17,032)	(5,448)
Balances at end of period	605	$ 5,648	5,648	630	605
Co-pay assistance
Net product sales allowance and reserve [Abstract]
Balances at beginning of period	13,326		19,330	3,644	3,644
Allowances for current period sales	6,593		115,481	52,441
Payment and Adjustment of Assumed liabilities Iroko Products Acquisition			(5,791)
Assumed liabilities Iroko Products Acquisition	5,791
Credits or payments mad for prior period sales	(6,380)		(13,540)	(7,866)
Credits or payments made for current period sales			(93,046)	(40,081)
Balances at end of period	19,330	22,434	22,434	12,359	19,330
Rebates
Net product sales allowance and reserve [Abstract]
Balances at beginning of period	2,664		5,498	579	579
Allowances for current period sales	594		21,044	5,383
Payment and Adjustment of Assumed liabilities Iroko Products Acquisition			(2,799)
Assumed liabilities Iroko Products Acquisition	2,799
Adjustments				180
Credits or payments mad for prior period sales	(559)		(2,699)	(1,235)
Credits or payments made for current period sales			(14,370)	(3,341)
Balances at end of period	5,498	6,674	6,674	2,222	5,498
Returns
Net product sales allowance and reserve [Abstract]
Balances at beginning of period	2,020		7,964
Allowances for current period sales	28		4,655	2,729
Payment and Adjustment of Assumed liabilities Iroko Products Acquisition			(836)
Assumed liabilities Iroko Products Acquisition	5,944
Credits or payments mad for prior period sales	(28)		(1,562)
Credits or payments made for current period sales				(650)
Balances at end of period	$ 7,964	$ 10,221	$ 10,221	2,079	$ 7,964
ASU 2014-09
Net product sales allowance and reserve [Abstract]
Adjustments				4,877
ASU 2014-09 \| Co-pay assistance
Net product sales allowance and reserve [Abstract]
Adjustments				4,221
ASU 2014-09 \| Rebates
Net product sales allowance and reserve [Abstract]
Adjustments				$ 656

Revenue from Contracts with Customers - Transaction Price Allocated to Future Performance Obligations (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Jan. 31, 2019	Dec. 31, 2018
Costs to Obtain and Fulfill a Contract
Practical expedient performance obligation	true
Deferred revenue	$ 0	$ 52	$ 0
Contract assets	$ 0		$ 0

Revenue from Contracts with Customers - Costs to Obtain and Fulfill a Contract (Details)	9 Months Ended
	Sep. 30, 2019
Costs to Obtain and Fulfill a Contract
Practical expedient, incremental costs of obtaining contracts as an expense when incurred as the period of benefit is less than one year	true

Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Feb. 01, 2019	Jan. 31, 2019	Dec. 31, 2018
Marketable Securities
Marketable Securities	$ 0
Cost Basis				$ 4,990
Unrealized Losses				(2)
Fair Value		$ 4,994	$ 4,994	4,988
Corporate notes and bonds
Marketable Securities
Cost Basis				4,990
Unrealized Losses				(2)
Fair Value				$ 4,988

Inventory (Details) - USD ($) $ in Thousands	8 Months Ended	13 Months Ended
Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 31, 2019	Feb. 01, 2019	Dec. 31, 2018
Inventory
Raw materials	$ 1,449			$ 1,374
Work in process	3,038			665
Finished goods	5,051			600
Total	$ 9,538	$ 2,299	$ 33,838	$ 2,639
Predecessor Successor Fixed list	Successor	Predecessor

Inventory - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Feb. 01, 2019	Jan. 31, 2019	Dec. 31, 2018
Inventory [Line Items]
Inventory	$ 9,538	$ 33,838	$ 2,299	$ 2,639
Work in process	3,038			665
Finished goods	5,051			600
Raw materials	1,449			$ 1,374
SPRIX Nasal Spray and OXAYDO
Inventory [Line Items]
Inventory	4,100		5,500
Plan Effects Adjustments
Inventory [Line Items]
Inventory			28,364
Fresh Start Adjustments
Inventory [Line Items]
Inventory			3,175
Fresh Start Adjustments \| SPRIX Nasal Spray and OXAYDO
Inventory [Line Items]
Inventory			3,200
Work in process			2,200
Finished goods			1,000
Iroko \| Plan Effects Adjustments \| SOLUMATRIX products and INDOCIN products
Inventory [Line Items]
Inventory	5,400		28,400
Work in process	1,400
Finished goods	3,600		27,100
Raw materials	$ 400		$ 1,300

Intangible Assets and Goodwill - Balance of Intangible Assets and Impairment (Details) - USD ($) $ in Thousands	1 Months Ended	8 Months Ended	9 Months Ended	12 Months Ended	13 Months Ended
	Jan. 31, 2019	Sep. 30, 2019	Sep. 30, 2019	Dec. 31, 2018	Jan. 31, 2019	Feb. 01, 2019
Finite-lived intangible assets
Accumulated Amortization		$ (9,326)	$ (9,326)	$ (8,173)
Gross Intangible Assets		182,053	182,053	12,454
Net Intangible Assets	$ 4,109	113,980	113,980	4,281	$ 4,109	$ 123,306
Net Intangible Assets		$ 172,727	172,727
Predecessor Successor Fixed list		Successor			Predecessor
OXAYDO product rights
Finite-lived intangible assets
Gross Intangible Assets		$ 1,300	1,300	7,623
Accumulated Amortization		(289)	(289)	(4,330)
Net Intangible Assets		1,011	$ 1,011	$ 3,293
Remaining Useful Life			2 years 4 months 2 days	3 years
SPRIX Nasal Spray product rights
Finite-lived intangible assets
Gross Intangible Assets		31,900	$ 31,900	$ 4,831
Accumulated Amortization		(2,363)	(2,363)	(3,843)
Net Intangible Assets		29,537	$ 29,537	$ 988
Remaining Useful Life			8 years 4 months 2 days	1 year
INDOCIN
Finite-lived intangible assets
Gross Intangible Assets		90,106	$ 90,106
Accumulated Amortization		(6,674)	(6,674)
Net Intangible Assets		83,432	$ 83,432
Remaining Useful Life			8 years 4 months 2 days
INDOCIN \| Iroko
Finite-lived intangible assets
Gross Intangible Assets	$ 90,100				$ 90,100
Goodwill
Finite-lived intangible assets
Gross Intangible Assets		58,747	$ 58,747
Net Intangible Assets		$ 58,747	$ 58,747
Goodwill \| Iroko
Finite-lived intangible assets
Remaining Useful Life	9 years
Fresh Start Adjustments
Finite-lived intangible assets
Net Intangible Assets	$ 29,091				29,091
Fresh Start Adjustments \| OXAYDO product rights
Finite-lived intangible assets
Gross Intangible Assets	$ 1,300				1,300
Remaining Useful Life	3 years
Fresh Start Adjustments \| SPRIX Nasal Spray product rights
Finite-lived intangible assets
Gross Intangible Assets	$ 31,900				31,900
Remaining Useful Life	9 years
Fresh Start Adjustments \| Goodwill
Finite-lived intangible assets
Gross Intangible Assets	$ 58,700				$ 58,700

Accrued Expenses (Details) - USD ($) $ in Thousands	8 Months Ended	13 Months Ended
Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 31, 2019	Feb. 01, 2019	Dec. 31, 2018
Accrued Expenses
Sales allowances	$ 38,603			$ 17,174
Interest	2,714			1,049
Payroll and related	2,249			3,567
Professional services	1,680			1,847
Sales and marketing	871
Restructuring	733			81
Royalties	710			34
Manufacturing services	264
Other	1,801			832
Total	$ 49,625	$ 26,617	$ 46,800	$ 24,584
Predecessor Successor Fixed list	Successor	Predecessor

Debt - Summary of company's debt (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 31, 2019
Debt Instrument [Line Items]
Long-term debt, Gross	$ 110,269
Unamortized debt discount	(5,820)
Unamortized deferred financing fees	(864)
Carrying value	103,585
Less: current portion of long-term debt	(6,990)
Net, long-term debt	96,595
Series A-1 Notes
Debt Instrument [Line Items]
Long-term debt, Gross	50,000
Unamortized debt discount	(2,414)	$ (4,600)
Series A-2 Notes
Debt Instrument [Line Items]
Long-term debt, Gross	45,000
Royalty rights obligation
Debt Instrument [Line Items]
Long-term debt, Gross	5,769
Unamortized debt discount	(3,234)
Credit agreement
Debt Instrument [Line Items]
Long-term debt, Gross	5,000
Unamortized debt discount	(172)
Unamortized deferred financing fees	(864)
Interim promissory note
Debt Instrument [Line Items]
Long-term debt, Gross	$ 4,500

Debt - Agreements (Details) - USD ($)		1 Months Ended	3 Months Ended		8 Months Ended	9 Months Ended
Debt - Agreements (Details) - USD ($)	Jan. 31, 2019	Jan. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Feb. 01, 2019	Dec. 31, 2018	Jan. 31, 2018	Dec. 31, 2017	Jan. 31, 2017
Subsequent Events
Discounts			$ 5,820,000		$ 5,820,000
Repurchase price of principal amount of the Notes, plus accrued and unpaid interest	101.00%
Cash and cash equivalents	$ 36,785,000	$ 36,785,000	18,594,000		18,594,000		$ 17,047,000	$ 35,323,000
Net product sales		1,775,000	22,386,000	$ 8,153,000	60,230,000	$ 21,857,000
Current liabilities	$ 37,538,000	$ 37,538,000	$ 76,098,000		$ 76,098,000		$ 58,861,000	$ 33,145,000
Exercise price of warrants (in dollars per share)							$ 0.001
Common stock, authorized	275,000,000	275,000,000	100,000,000		100,000,000		100,000,000	275,000,000
Severance and related expenses		$ 776,000			$ 648,000
Common stock issued	4,774,093	4,774,093	9,360,968		9,360,968			56,547,101
Warrants issued							4,972,365
Common stock outstanding			9,360,968		9,360,968			56,547,101
INDOCIN
Subsequent Events
Net product sales			$ 11,240,000		$ 30,844,000
Preemptive Rights Agreements \| Minimum \| Iroko
Subsequent Events
Ownership percent held	2.50%	2.50%
Collateral Agreement
Subsequent Events
Percentage of non-voting equity interest pledged	100.00%
Collateral Agreement \| Minimum
Subsequent Events
Percentage of voting equity interest pledged	65.00%
Collateral Agreement \| Maximum
Subsequent Events
Percentage of voting equity interest pledged	100.00%
Royalty Rights Agreements \| Iroko
Subsequent Events
Percentage of royalty right payment to aggregate net sale	1.50%
13% Notes
Subsequent Events
Interest rate (as a percent)			13.00%		13.00%						13.00%
Unrestricted cash on hand and availability under any revolving credit facility equal to quotient of the outstanding principal amount of the Notes	9.5
Minimum unrestricted cash on hand and availability under any revolving credit facility	$ 7,500,000
Percentage of notes holder who may declare default	25.00%
Percentage of principal and accrued and unpaid interest on the Notes due and payable in the event of default	100.00%
Threshold period within which the entity has to cure default	10 days
13% Notes \| Period prior to January 31, 2020
Subsequent Events
Redemption price of debt (as a percent)	100.00%
Redemption price, percentage of principal amount redeemed	35.00%
Redemption price percentage with condition	113.50%
Percentage of principal amount of notes to be outstanding for a redemption price of 113.5%	65.00%
Threshold period for occurring redemption from the date of closing of equity offering	90 days
13% Notes \| Period from and including January 31, 2020 to and including January 30, 2021
Subsequent Events
Redemption price of debt (as a percent)	103.00%
13% Notes \| Period from and including January 31, 2021
Subsequent Events
Redemption price of debt (as a percent)	100.00%
13% Notes \| Asset Purchase Agreement
Subsequent Events
Interest rate (as a percent)	13.00%	13.00%
Aggregate principal amount of debt issued	$ 95,000,000	$ 95,000,000
Repayments of principal balance based on percentage of product sale	15.00%
Series A-2 Notes \| Asset Purchase Agreement \| Iroko
Subsequent Events
Aggregate principal amount of debt issued	$ 45,000,000	45,000,000
Series A-1 Notes
Subsequent Events
Discounts	4,600,000	4,600,000	$ 2,414,000		$ 2,414,000
Series A-1 Notes \| Asset Purchase Agreement
Subsequent Events
Aggregate principal amount of debt issued	$ 50,000,000	$ 50,000,000
Unsecured Promissory Note \| Asset Purchase Agreement \| Iroko
Subsequent Events
Interest rate (as a percent)	8.00%	8.00%
Principal amount of notes issued as consideration	$ 4,500,000
6.50% Notes
Subsequent Events
Interest rate (as a percent)			6.50%		6.50%
Aggregate principal amount of debt issued										$ 23,900,000
Exercise price of warrants (in dollars per share)										$ 0.01
Warrants issued									1,000,000	2,500,000

Debt - Revolving Credit Agreement (Details) - USD ($)		9 Months Ended
Debt - Revolving Credit Agreement (Details) - USD ($)	Mar. 20, 2019	Sep. 30, 2019
LIBOR
Subsequent Events
Basis spread (as a percent)	5.00%
Base rate
Subsequent Events
Basis spread (as a percent)	4.00%
Revolving Credit Agreement
Subsequent Events
Maximum borrowings	$ 20,000,000
Amount of line of credit drawn	$ 5,000,000
Interest rate (as a percent)	13.00%
Percent of termination fee from the Closing Date through March 20, 2020	1.00%
Percent of termination fee from March 20, 2020 through March 20, 2021	0.50%
Minimum amount of consolidated liquidity		$ 10,000,000
Threshold period within which the entity has to cure default	10 days
Revolving Credit Agreement \| Minimum
Subsequent Events
Percent of commitment amount outstanding to be maintained	25.00%
Maintenance of consolidated liquidity	9.5
Denominator of consolidated liquidity	$ 7,500,000

Debt - Interim Promissory Note (Details) - USD ($) $ in Thousands	Jan. 31, 2019	Sep. 30, 2019
Debt Instrument [Line Items]
Discounts		$ 5,820
Deferred Financing Fees		864
Series A-1 Notes
Debt Instrument [Line Items]
Discounts	$ 4,600	2,414
Royalty rights obligation
Debt Instrument [Line Items]
Discounts		3,234
Credit agreement
Debt Instrument [Line Items]
Discounts		172
Deferred Financing Fees		$ 864
Asset Purchase Agreement \| Unsecured Promissory Note \| Iroko
Debt Instrument [Line Items]
Principal amount of notes issued as consideration	$ 4,500
Interest rate (as a percent)	8.00%

Debt - Estimated Future Principal Payments (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Long-term Debt, Fiscal Year Maturity [Abstract]
2020	$ 6,558
2021	4,594
2022	12,007
2023	9,848
2024	$ 71,493

Debt - Convertible Senior Notes (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended	9 Months Ended
	Jan. 31, 2019	Jan. 31, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Feb. 01, 2019	Dec. 31, 2018	Jan. 31, 2018	Dec. 31, 2017	Jan. 31, 2017	Apr. 30, 2015
Long-term Debt
Common stock, par value (in dollars per share)				$ 0.001			$ 0.001
Exercise price (in dollars per share)						$ 0.001
Number of shares callable by warrants						4,972,365
Carrying amount				$ 110,269
Gain (loss) on extinguishment of debt		$ 29,976
Unamortized debt discount				(5,820)
Carrying value				$ 103,585
common stock shares authorized	275,000,000	275,000,000		100,000,000		100,000,000	275,000,000
Change In Fair Value Of Derivative Liability			$ 3,986		$ 12,292
Substantial doubt about going concern of the company within one year				true
Plan Effects Adjustments
Long-term Debt
Interest rate (as a percent)	13.00%	13.00%
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Gain (loss) on extinguishment of debt		$ 29,976
Proceeds from issuance of debt		$ 45,363
Percentage of royalty right payment to aggregate net sale		1.50%
Consideration paid		$ (18,238)
13% Notes
Long-term Debt
Interest rate (as a percent)				13.00%						13.00%
13% Notes \| Maximum \| Initial closing
Long-term Debt
Maximum borrowings										$ 80,000
13% Notes \| Plan Effects Adjustments
Long-term Debt
Percentage of new equity issued for settlement		19.38%
Interest rate (as a percent)	13.00%	13.00%
Repayment of adequate protection and cash distribution	$ 20,000	$ 20,000
5.50% Notes
Long-term Debt
Interest rate (as a percent)				5.50%
Convertible debt outstanding							$ 24,700
Principal amount of debt converted									$ 36,400
5.50% Notes \| Private placement
Long-term Debt
Interest rate (as a percent)											5.50%
Aggregate principal amount of debt issued											$ 61,000
5.50% Notes \| Plan Effects Adjustments
Long-term Debt
Percentage of new equity issued for settlement	16.10%
Interest rate (as a percent)	5.50%	5.50%
6.50% Notes
Long-term Debt
Interest rate (as a percent)				6.50%
Convertible debt outstanding							23,900
Aggregate principal amount of debt issued									$ 23,900
Warrant exercisable (in shares)									3,500,000
Exercise price (in dollars per share)									$ 0.01
Number of shares callable by warrants								1,000,000	2,500,000
6.50% Notes \| Plan Effects Adjustments
Long-term Debt
Percentage of new equity issued for settlement	15.50%
Interest rate (as a percent)	6.50%	6.50%
Series A-1 Notes
Long-term Debt
Carrying amount				$ 50,000
Unamortized debt discount	$ (4,600)	$ (4,600)		$ (2,414)
Series A-1 Notes \| Plan Effects Adjustments
Long-term Debt
Convertible debt outstanding							$ 80,000
Aggregate principal amount of debt issued	$ 50,000	$ 50,000

Leases - (Details)	9 Months Ended
Leases - (Details)	Sep. 30, 2019
Leases
Renewal options to extend	true
Minimum
Leases
Initial lease terms	1 year
Maximum
Leases
Initial lease terms	5 years

Leases - Components of lease expense (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	8 Months Ended	13 Months Ended
	Jan. 31, 2019	Sep. 30, 2019	Sep. 30, 2019	Jan. 31, 2019
Components of lease expense
Predecessor Successor Fixed list			Successor	Predecessor
Fixed lease cost	$ 69	$ 252	$ 598
Total operating lease expense	$ 69	$ 252	$ 598

Leases - Balance sheet information (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Feb. 01, 2019	Jan. 31, 2019
Balance sheet information:
Operating lease ROU asset	$ 2,885	$ 1,854	$ 1,854
Financial position	us-gaap:OperatingLeaseRightOfUseAsset
Current operating lease liabilities	$ 976
Financial position	us-gaap:OtherLiabilitiesCurrent
Non-current operating lease liabilities	$ 2,329
Financial position	us-gaap:OtherLiabilitiesNoncurrent
Total operating leas liability	$ 3,305
Financial position	us-gaap:OtherLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent

Leases - Lease term and discount rate information (Details)	Sep. 30, 2019
Leases
Weighted-average remaining lease term	3 years 2 months 5 days
Weighted-average discount rate	8.00%

Leases - Cash flow information (Details) - USD ($) $ in Thousands	1 Months Ended	8 Months Ended	13 Months Ended
	Jan. 31, 2019	Sep. 30, 2019	Jan. 31, 2019
Leases
Predecessor Successor Fixed list		Successor	Predecessor
Operating cash flows from operating leases		$ 846
New Operating Lease Fleet Vehicles
Leases
Right-of-use assets obtained in exchange for lease obligations - New operating leases	$ 2,478	2,026
Termination Of Operating Lease Fleet Vehicles
Leases
Right-of-use assets obtained in exchange for lease obligations - Termination of operating lease		$ (677)

Leases - Future minimum lease payments (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Future minimum lease payments:
2019 (excludes the nine months ended September 30, 2019)	$ 318
2020	1,274
2021	1,227
2022	634
2023	232
Total lease payments	3,685
Less: Imputed interest	(380)
Total minimum lease payments	$ 3,305

Stockholders Equity (Details) - $ / shares	Sep. 30, 2019	Feb. 01, 2019	Jan. 31, 2019	Dec. 31, 2018
Preferred shares authorized	5,000,000
Preferred shares, par value	$ 0.001
Preferred shares outstanding	0
common stock shares authorized	100,000,000	100,000,000	275,000,000	275,000,000
Common stock, par value (in dollars per share)	$ 0.001			$ 0.001
Common stock, issued	9,360,968		4,774,093	56,547,101
Common stock, outstanding	9,360,968			56,547,101
Iroko and affiliates
Common stock, issued	4,586,875

Stockholders Equity - Amended and Restated Charter and Bylaws (Details)	Feb. 01, 2019 USD ($) $ / shares shares	Sep. 30, 2019 shares	Jan. 31, 2019 shares	Dec. 31, 2018 shares
Equity [Abstract]
Common Stock, Shares Authorized \| shares	100,000,000	100,000,000	275,000,000	275,000,000
Number of board of directors \| $	7
Term of the changes under A&R Charter	2 years
Lock up period	90 days
Standstill period	24 months
Number of nominee to board of directors \| $	2
Percentage of equity consideration received on effective date	25.00%
Warrants issued \| shares	4,972,365
Exercise price (in dollars per share) \| $ / shares	$ 0.001
Percentage of increase in aggregate ownership	49.00%
Outstanding period	18 months
Terms of registration right agreement	180 days

Fair Value Measurements (Details) - USD ($) $ in Thousands	8 Months Ended
Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Feb. 01, 2019	Jan. 31, 2019	Dec. 31, 2018
Fair Value Measurements
Marketable securities, available for sale		$ 4,994	$ 4,994	$ 4,988
Iroko \| INDOCIN
Fair Value Measurements
Contingent payment consideration	$ 20,000
Recurring basis
Fair Value Measurements
Cash equivalents (money market funds and commercial paper)	76			22,996
Marketable securities, available for sale				4,988
Total assets	76			27,984
Acquisition-related contingent consideration	18,300
Total liabilities	18,300
Recurring basis \| Level 1
Fair Value Measurements
Cash equivalents (money market funds and commercial paper)	76			22,996
Total assets	76			22,996
Recurring basis \| Level 2
Fair Value Measurements
Marketable securities, available for sale				4,988
Total assets				$ 4,988
Recurring basis \| Level 3
Fair Value Measurements
Acquisition-related contingent consideration	18,300
Total liabilities	18,300
Changes in the fair value of Level 3 liabilities
Beginning balance	14,800
Change in fair value of contingent consideration	3,500
Ending balance	$ 18,300

Net (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended					8 Months Ended	9 Months Ended		13 Months Ended
	Jan. 31, 2019	Mar. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	Jan. 31, 2019
Basic and diluted net loss per common share calculation:
Predecessor Successor Fixed list								Successor			Predecessor
Shares excluded from the calculation of diluted weighted average shares outstanding, as they would be anti-dilutive									4,972,364
Net (loss) income	$ 107,240	$ (10,483)	$ (10,290)	$ (19,643)	$ (51,227)	$ (11,961)	$ (12,353)	$ (40,416)		$ (75,540)
Weighted-average common stock outstanding	56,547,101		14,333,332		55,192,542			14,333,332		51,944,358
Net (loss) income per share of common stock, basic and diluted (in dollars per share)	$ 1.90		$ (0.72)		$ (0.93)			$ (2.82)		$ (1.45)
5.50% Notes
Basic and diluted net loss per common share calculation:
Interest rate (as a percent)			5.50%					5.50%	5.50%
6.50% Notes
Basic and diluted net loss per common share calculation:
Interest rate (as a percent)			6.50%					6.50%	6.50%

Stock-Based Compensation - 2019 Stock-Based Incentive Compensation Plan (Details) $ in Thousands		1 Months Ended	8 Months Ended	9 Months Ended
	Mar. 26, 2019 item	Jan. 31, 2019 USD ($)	Sep. 30, 2019 USD ($) shares	Sep. 30, 2019 USD ($) shares	Sep. 30, 2018 USD ($)	Mar. 31, 2019 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense recognized \| $		$ 4,125	$ 1,889		$ 3,094
Share-based Compensation \| $		$ 4,125	$ 1,889		$ 3,094
Equity Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining period over which unrecognized compensation expense will be recognized				2 years 8 months 12 days
2019 Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock initially reserved for issuance (in shares)			2,150,000	2,150,000
2019 Stock Plan \| Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense \| $			$ 5,100	$ 5,100
Weighted average remaining period over which unrecognized compensation expense will be recognized				1 year 9 months 18 days
2019 Stock Plan \| Time-Based Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan				801,000
Vesting percentage per year	0.33%
Number of anniversaries of grant date \| item	3
Vesting percentage	100.00%
2019 Stock Plan \| Performance-Based Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan				509,000
Vesting percentage per year	50.00%
Vesting percentage	100.00%
2019 Stock Plan \| Performance-Based Restricted Stock Unit \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of goal attainment for vesting percentage	100.00%
2019 Stock Plan \| Performance-Based Restricted Stock Unit \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of goal attainment for vesting percentage	75.00%
2019 Stock Plan \| Equity Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense \| $			$ 900	$ 900
2019 Stock Plan \| Executives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock initially reserved for issuance (in shares)						1,433,333
2019 Stock Plan \| Executives \| Time-Based Restricted Stock Unit \| Tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan				557,000
Vesting period				3 years
2019 Stock Plan \| Executives \| Time-Based Restricted Stock Unit \| Tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan				144,000
Vesting percentage				100.00%
2019 Stock Plan \| Executives \| Performance-Based Restricted Stock Unit \| Tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan				367,000
2019 Stock Plan \| Executives \| Performance-Based Restricted Stock Unit \| Tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan				142,000
2019 Stock Plan \| Executives \| Performance-Based Restricted Stock Unit \| Maximum \| Tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage per year				50.00%
Percentage of goal attainment for vesting percentage				100.00%
2019 Stock Plan \| Executives \| Performance-Based Restricted Stock Unit \| Maximum \| Tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage per year				100.00%
Percentage of goal attainment for vesting percentage				100.00%
2019 Stock Plan \| Executives \| Performance-Based Restricted Stock Unit \| Minimum \| Tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of goal attainment for vesting percentage				75.00%
2019 Stock Plan \| Executives \| Performance-Based Restricted Stock Unit \| Minimum \| Tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of goal attainment for vesting percentage				75.00%
2019 Stock Plan \| Other than executives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock initially reserved for issuance (in shares)						716,667
2019 Stock Plan \| Other than executives \| Time-Based Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan				100,000
Vesting period				3 years

Stock-Based Compensation - Equity Compensation Plans (Details) - 2019 Stock Plan	9 Months Ended
	Sep. 30, 2019 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares initially reserved under the 2019 Plan	2,150,000
Stock options granted under the Plan	(572,000)
Restricted stock units forfeited	199,000
Remaining shares available for future grant	467,000
Time-Based Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan	(801,000)
Performance-Based Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan	(509,000)

Stock-Based Compensation - Restricted Stock (Details) - Unvested Restricted Stock Awards	8 Months Ended
	Sep. 30, 2019 $ / shares shares
Shares
Restricted stock units granted under the 2019 Plan \| shares	1,310,000
Forfeited, Successor period (in shares) \| shares	(179,000)
Unvested balance at the end of the period (in shares) \| shares	1,131,000
Weighted-average Grant Date Fair Value per Share
Granted (in dollars per share) \| $ / shares	$ 6.07
Forfeited, Successor period (in dollars per share) \| $ / shares	6.07
Outstanding balance at the end of the period (in dollars per share) \| $ / shares	$ 6.07

Stock-Based Compensation - Stock Plans (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended					8 Months Ended	9 Months Ended	13 Months Ended
	Jan. 31, 2019	Mar. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 31, 2019	Dec. 31, 2018
Shares of common stock reserved for issuance:
Predecessor Successor Fixed list								Successor		Predecessor
Common stock shares issued	(4,774,093)		(9,360,968)					(9,360,968)		(4,774,093)	(56,547,101)
Expected term of options								6 years
Total stock-based compensation expense	$ 4,125							$ 1,889	$ 3,094
Share-based Compensation	4,125							$ 1,889	3,094
Weighted average assumptions:
Risk free interest rate (as a percent)								2.27%
Expected term of options								6 years
Expected volatility (as a percent)								80.00%
Dividend yield (as a percent)								0.00%
Unrecognized compensation expense and recognition period disclosure
Stock-based compensation expense	4,125	$ 60	$ 1,011	$ 818	$ 1,140	$ 1,002	$ 952
General and administrative
Shares of common stock reserved for issuance:
Total stock-based compensation expense	3,466							$ 1,832	2,749
Sales and marketing
Shares of common stock reserved for issuance:
Total stock-based compensation expense	436							$ 57	175
Research and development
Shares of common stock reserved for issuance:
Total stock-based compensation expense	$ 223								$ 170
Unvested Restricted Stock Awards
Shares of common stock reserved for issuance:
Restricted stock units granted under the 2019 Plan								1,310,000
Granted (in dollars per share)								$ 6.07
Stock options
Shares of common stock reserved for issuance:
Weighted average remaining period over which unrecognized compensation expense will be recognized								9 years 8 months 12 days
Options Outstanding, Number of Shares
Granted, Successor period (in shares)								572,000
Forfeited or cancelled (in shares)								(20,000)
Balance at end of the period (in shares)			552,000					552,000
Options Outstanding, Weighted-Average Exercise Price
Granted, Successor period (in dollars per share)								$ 2.77
Forfeited or cancelled (in dollars per share)								2.81
Outstanding at end of the period (in dollars per share)			$ 2.77					$ 2.77
Unrecognized compensation expense and recognition period disclosure
Weighted average remaining period over which unrecognized compensation expense will be recognized								9 years 8 months 12 days
Employee
Options, additional disclosures
Weighted average grant date fair value of the options granted (in dollars per share)								$ 1.92	$ 0.50

Restructuring and Other Charges (Details) - USD ($)	1 Months Ended	3 Months Ended		8 Months Ended	9 Months Ended	13 Months Ended
Restructuring and Other Charges (Details) - USD ($)	Jan. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 31, 2019
Restructuring and Other Charges
Predecessor Successor Fixed list				Successor		Predecessor
Severance	$ 776,000			$ 648,000
Professional fees	23,000		$ 2,580,000		$ 2,580,000
ARYMO write down of equipment			8,184,000		8,184,000
Halo termination fee			3,100,000		3,100,000
Total restructuring and other costs	$ 799,000	$ 0	$ 13,864,000	$ 648,000	$ 13,864,000

Reorganization items (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		8 Months Ended	9 Months Ended	13 Months Ended
Reorganization items (Details) - USD ($) $ in Thousands	Jan. 31, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 31, 2019
Reorganization items
Predecessor Successor Fixed list				Successor		Predecessor
Professional Fees	$ 2,612			$ 553
Iroko acquisition related fees	2,138			50
Legal fees	713
Other reorganization expenses	473
Bankruptcy fees	42			606
Gain on extinguishment of debt	(29,976)
Revaluation of assets and liabilities	(91,171)
Total reorganization items	$ (115,169)	$ 0	$ 0	$ 1,209	$ 0

Commitments and Contingencies (Detail)	Aug. 30, 2019	Jul. 30, 2019 USD ($)	Feb. 10, 2017 security	Jan. 27, 2017 security	Jun. 27, 2019 USD ($)	Jan. 31, 2019 USD ($)
Loss Contingencies [Line Items]
Number of putative securities \| security			2	2
Cosette Pharmaceuticals Supply Agreement
Loss Contingencies [Line Items]
Purchase obligation						$ 6,500,000
Catalent Pharma Solutions Commercial Supply Agreement
Loss Contingencies [Line Items]
Purchase obligation						$ 1,000,000
Jubilant HollisterStier Manufacturing and Supply Agreement
Loss Contingencies [Line Items]
Percentage of requirements to be purchased under the agreement		75.00%
Purchase obligation		$ 700,000
Pending Litigation
Loss Contingencies [Line Items]
Accelerated Rent					$ 8,731,141
Pending Litigation \| I Ceutica Inc. and I Ceutica Pty Ltd \| Maximum
Loss Contingencies [Line Items]
Cure period	30 days

Acquisitions and License and Collaboration Agreements - Shionogi and Acura (Details) $ in Millions	1 Months Ended	9 Months Ended
	Jan. 31, 2015 USD ($)	Sep. 30, 2019 item	May 31, 2019 USD ($)
SPRIX Nasal Spray product rights
License and collaboration agreement
Purchase agreement term from date of first commercial sale	10 years
OXAYDO tablets
License and collaboration agreement
Number of U.S. patents that expire between 2023 and 2025 \| item		6
Collaboration and License Agreement \| Acura
License and collaboration agreement
Period of written notice to terminate license agreement		90 days
Collaboration and License Agreement \| Acura \| OXAYDO tablets
License and collaboration agreement
Milestone payment payable upon achievement of net product sales in calendar year threshold	$ 12.5
Net product sales threshold in calendar year to be met for one-time milestone payment	$ 150.0
Collaboration and License Agreement \| iCeutica
License and collaboration agreement
License agreement term after date of first commercial introduction		20 years
Iroko \| Royalty Agreements
License and collaboration agreement
Percentage of royalty to pay		5.00%
Payment agreed to terminate royalty agreement			$ 0.8

Income Taxes (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Income Taxes
Deferred tax liability	$ 23,000	$ 24,000