Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2019	May 15, 2019
Document and Entity Information
Entity Registrant Name	Egalet Corp
Entity Central Index Key	0001586105
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Common Stock, Shares Outstanding		9,360,968
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 10,387
Accounts receivable, net	39,944
Inventory	23,276
Prepaid expenses and other current assets	3,258
Total current assets	76,865
Intangible assets, net	120,974
Restricted cash	400
Property and equipment, net	3,941
Right of use asset, net	1,745
Goodwill	58,747
Deposits and other assets	2,151
Total assets	264,823
Current liabilities:
Accounts payable	11,569
Accrued expenses	58,925
Debt - current, net	2,635
Acquisition-related contingent consideration	1,200
Other current liabilities	1,043
Total current liabilities	75,372
Debt - non-current portion, net	92,957
Acquisition-related contingent consideration	13,800
Deferred income tax liability	24
Credit agreement	5,000
Other liabilities	1,165
Total liabilities not subject to compromise	188,318
Commitments and contingencies (Note 17)
Stockholders' deficit:
Common stock	9
Additional paid-in capital	86,988
Accumulated other comprehensive (loss) income	(9)
Accumulated deficit	(10,483)
Total stockholders' equity (deficit)	76,505
Total liabilities and stockholder's equity (deficit)	$ 264,823
Predecessor
Current assets:
Cash and cash equivalents		$ 35,323
Marketable securities, available for sale		4,988
Accounts receivable, net		8,006
Inventory		2,639
Prepaid expenses and other current assets		2,715
Other receivables		846
Total current assets		54,517
Intangible assets, net		4,281
Restricted cash		400
Property and equipment, net		1,059
Deposits and other assets		1,676
Total assets		61,933
Current liabilities:
Accounts payable		8,561
Accrued expenses		24,584
Total current liabilities		33,145
Deferred income tax liability		24
Other liabilities		536
Total liabilities not subject to compromise		33,705
Liabilities subject to compromise		139,588
Commitments and contingencies (Note 17)
Stockholders' deficit:
Common stock		55
Additional paid-in capital		276,569
Accumulated other comprehensive (loss) income		869
Accumulated deficit		(388,853)
Total stockholders' equity (deficit)		(111,360)
Total liabilities and stockholder's equity (deficit)		$ 61,933

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

Consolidated Statements of Operations - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended
	Jan. 31, 2019	Mar. 31, 2019	Mar. 31, 2018
Revenues
Revenues		$ 15,810
Type of Revenue		us-gaap:ProductMember
Costs and Expenses
Cost of sales (excluding amortization of product rights)		$ 12,461
Type of cost of sales		us-gaap:ProductMember
Amortization of product rights		$ 2,332
General and administrative		3,365
Sales and marketing		5,131
Research and development		5
Change in fair value of contingent consideration payable		200
Costs and Expenses, Total		23,494
Loss from operations		(7,684)
Other (income) expense:
Interest expense, net		2,193
Total other expense (income)		2,193
Reorganization items		606
(Loss) income after reorganization charges and before provision (benefit) for income taxes		(10,483)
Net (loss) income		$ (10,483)	$ (12,355)
Per share information:
Net (loss) income per share of common stock, basic and diluted (in dollars per share)		$ (0.73)
Weighted-average shares outstanding, basic and diluted (in shares)		14,333,332
Predecessor
Revenues
Revenues	$ 1,775		6,261
Costs and Expenses
Cost of sales (excluding amortization of product rights)	554		2,216
Amortization of product rights	171		537
General and administrative	5,413		7,073
Sales and marketing	2,773		9,055
Research and development	186		1,303
Restructuring and other charges	799
Costs and Expenses, Total	9,896		20,184
Loss from operations	(8,121)		(13,923)
Other (income) expense:
Change in fair value of warrant and derivative liability			(5,125)
Interest expense, net	(52)		3,556
Other (gain) loss	(140)
Total other expense (income)	(192)		(1,569)
Reorganization items	(115,169)
(Loss) income after reorganization charges and before provision (benefit) for income taxes	107,240		(12,354)
Net (loss) income	$ 107,240		$ (12,354)
Per share information:
Net (loss) income per share of common stock, basic and diluted (in dollars per share)	$ 1.90		$ (0.26)
Weighted-average shares outstanding, basic and diluted (in shares)	56,547,101		47,303,659

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended
	Jan. 31, 2019	Mar. 31, 2019	Mar. 31, 2018
Net (loss) income		$ (10,483)	$ (12,355)
Other comprehensive (loss) income:
Unrealized loss on available for sale securities		(1)	(30)
Foreign currency translation adjustments		(8)	124
Comprehensive (loss) income		$ (10,492)
Predecessor
Net (loss) income	$ 107,240		(12,354)
Other comprehensive (loss) income:
Unrealized loss on available for sale securities			(30)
Foreign currency translation adjustments			124
Comprehensive (loss) income	$ 107,240		$ (12,260)

Consolidated Statements of Changes in Stockholders' (Deficit) Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Comprehensive Income (loss)	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 \| Predecessor					(30)
Unrealized loss on available for sale securities				(30)	(30)
Foreign currency translation adjustment \| Predecessor					124
Foreign currency translation adjustment				124	124
Net (loss) income \| Predecessor					(12,354)
Net (loss) income			(12,355)		(12,355)
Balance at end of the period at Mar. 31, 2018	$ 53	271,551	(305,754)	1,102	(33,048)
Balance at end of the period (in shares) at Mar. 31, 2018	52,881,201
Increase (Decrease) in Stockholders' Deficit
Cumulative adjustment - ASU 2016-09 \| ASU 2014-09			1,901		1,901
Balance at beginning of the period (Predecessor) at Dec. 31, 2018	$ 55	276,569	(388,853)	869	(111,360)
Balance at beginning of the period (in shares) (Predecessor) at Dec. 31, 2018	56,547,101
Increase (Decrease) in Stockholders' Deficit
Cancellation of Predecessor common stock and stock-based compensation \| Predecessor	$ (55)	(280,694)			(280,749)
Cancellation of Predecessor common stock and stock-based compensation (in shares) \| Predecessor	(56,547,101)
Elimination of Predecessor accumulated deficit and accumulated other comprehensive income \| Predecessor			281,613	(869)	280,744
Issuance of common stock, net of costs \| Predecessor	$ 5	31,000			31,005
Issuance of common stock, net of costs (in shares) \| Predecessor	4,774,093
Warrants issued for settlement of predecessor debt \| Predecessor		14,303			14,303
Warrants issued for asset purchase \| Predecessor		11,841			11,841
Common stock issued for asset purchase \| Predecessor	$ 4	29,784			29,788
Common stock issued for asset purchase (in shares) \| Predecessor	4,586,875
Stock-based compensation expense \| Predecessor		4,125			4,125
Net (loss) income \| Predecessor			107,240		107,240
Balance at end of the period (Predecessor) at Jan. 31, 2019					(117,994)
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

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended
	Jan. 31, 2019	Mar. 31, 2019	Mar. 31, 2018
Operating activities:
Net (loss) income		$ (10,483)
Adjustment to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		2,470
Stock-based compensation expense		60
Non-cash interest and amortization of debt discount		954
Accretion of discount on marketable securities		(3)
Change in fair value of contingent consideration		200
Changes in assets and liabilities:
Accounts receivable		(35,802)
Inventory		10,562
Prepaid expenses		(686)
Right of Use Assets		109
Other receivables		131
Deposits and other assets		(476)
Accounts payable		3,231
Accrued expenses		12,142
Other current liabilities		13
Other liabilities		(194)
Net cash (used in) provided by operating activities		(16,400)
Investing activities:
Payments for purchase of property and equipment		(6)
Sales of investments		2,497
Maturity of investments		2,500
Net cash provided by (used in) investing activities		4,991
Financing activities:
Proceeds from credit agreement		4,775
Net cash provided by (used in) financing activities		4,775
Effect of foreign currency translation on cash and cash equivalents		(26)
Net (decrease) increase in cash, cash equivalents and restricted cash		(6,660)
Cash, cash equivalents and restricted cash at beginning of period		17,447
Cash, cash equivalents and restricted cash at end of period	$ 17,447	$ 10,787
13% Notes
Financing activities:
Interest rate (as a percent)		13.00%
Predecessor
Operating activities:
Net (loss) income	107,240		$ (12,354)
Adjustment to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	204		1,210
Non-cash reorganization items	(121,144)
Change in fair value of warrant and derivative liability			(5,125)
Stock-based compensation expense	4,125		952
Non-cash interest and amortization of debt discount	(9)		496
Accretion of discount on marketable securities	(5)		(97)
Changes in assets and liabilities:
Accounts receivable	3,865		(11,234)
Inventory	340		955
Prepaid expenses	(219)		(439)
Other receivables	711		2
Deposits and other assets	1		164
Accounts payable	103		(19)
Accrued expenses	5,172		3,995
Other liabilities			(44)
Net cash (used in) provided by operating activities	822		(20,660)
Investing activities:
Payments for purchase of property and equipment			(3)
Purchases of investments			(4,265)
Maturity of investments			23,500
Net cash provided by (used in) investing activities			19,232
Financing activities:
Net proceeds from issuance of common stock			4,157
Payments on borrowings	(19,104)
Royalty payments in connection with the 13% Notes			(201)
Net cash provided by (used in) financing activities	(19,104)		3,956
Effect of foreign currency translation on cash and cash equivalents	6		61
Net (decrease) increase in cash, cash equivalents and restricted cash	(18,276)		2,589
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		34,079
Supplemental disclosures of cash flow information:
Cash interest payments			5,878
Non-cash financing activities:
Reclassification to additional paid-in capital of derivative liability			$ 12,497

Consolidated Statements of Cash Flows (Parenthetical)	Mar. 31, 2019
6.50% Notes
Interest rate (as a percent)	6.50%

Organization and Description of the Business	3 Months Ended
Organization and Description of the Business	Mar. 31, 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 Egalet Corporation and its subsidiaries (“Egalet” or the “Company”) as of March 31, 2019 (Successor) and for the periods from February 1, 2019 through March 31, 2019 (Successor), January 1, 2019 through January 31, 2019 (Predecessor) and the three months ended March 31, 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 March 31, 2019 (Successor) are not necessarily indicative of future financial results. 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 Iroko Products Acquisition was consummated, and the Plan became effective, on January 31, 2019. 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 (the “Iroko Products Acquisition”), the Plan became effective. Organization and Business Overview The Company is a commercial-stage life sciences company focused on developing and marketing important treatments for patients and healthcare providers. Egalet currently has a portfolio of innovative treatments for different types of pain and inflammation. The Company has seven commercially available products: SPRIX® (ketorolac tromethamine) Nasal Spray, ZORVOLEX® (diclofenac), VIVLODEX® (meloxicam), TIVORBEX® (indomethacin), INDOCIN® (indomethacin) suppositories, INDOCIN® oral suspension and OXAYDO® (oxycodone HCI, USP) tablets for oral use only —CII. 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. Liquidity and Substantial Doubt in Going Concern Substantial Doubt Regarding Going Concern The accompanying 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 March 31, 2019, the Company had an accumulated deficit of $10.5 million and working capital of $1.5 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 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	3 Months Ended
	Mar. 31, 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 March 31, 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 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. 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.

Fresh Start Accounting

3 Months Ended

Mar. 31, 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 operation 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. 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

3 Months Ended

Mar. 31, 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 March 31, 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 summarizes revenue by revenue source for the Successor period February 1, 2019 through March 31, 2019 and the Predecessor periods January 1, 2019 through January 31, 2019 and the three months ended March 31, 2018:


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
(in thousands)	March 31, 2019		January 31, 2019		March 31, 2018
Product lines
SPRIX Nasal Spray	$	3,830	$	1,354	$	4,814
OXAYDO		673		421		1,260
INDOCIN products		7,499		—		—
SOLUMATRIX products		3,808		—		—
ARYMO ER		—		—		187
Total	$	15,810	$	1,775	$	6,261

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 Fees

The Company pays certain pharmaceutical wholesalers fees based on a contractually determined rate. The Company accrues the fees on shipment 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.

Commercial and Government Rebates

The Company contracts with various commercial and government payor organizations, primarily private insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. The Company estimates these rebates 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 summarizes activity in each of the net product sales allowance and reserve categories for the Successor period February 1, 2019 through March 31, 2019 and the Predecessor periods January 1, 2019 through January 31, 2019 and the three months ended March 31, 2018:


	Successor
(in thousands)	Fees and distribution costs		Co-pay assistance		Rebates		Returns		Total
Balances at January 31, 2019	$	2,680	$	19,330	$	3,423	$	7,964	$	33,397
Allowances for current period sales		11,161		29,602		3,900		1,262		45,925
Credits or payments made for prior period sales		—		(935)		(692)		(76)		(1,703)
Credits or payments made for current period sales		(921)		(23,474)		(1,016)		—		(25,411)
Balances at March 31, 2019	$	12,920	$	24,523	$	5,615	$	9,150	$	52,208

Total gross product sales									$	61,735

Total provision for product sales allowances and accruals as a percentage of total gross sales										74%



	Predecessor
(in thousands)	Fees and distribution costs		Co-pay 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		595		28		7,784
Assumed liabilities Iroko Acquisition		2,076		5,791		723		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		(65)		—		—		—		(65)
Balances at January 31, 2019	$	2,680	$	19,330	$	3,423	$	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
(in thousands)	Fees and distribution costs		Co-pay 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		2,067		19,541		2,058		277		23,943
Adjustment related to prior period sales		—		—		180		—		180
Credits or payments made for prior period sales		(541)		(6,755)		(797)		—		(8,093)
Credits or payments made for current period sales		(1,333)		(7,979)		(133)		(115)		(9,560)
Balances at March 31, 2018	$	788	$	12,672	$	2,543	$	162	$	16,165

Total gross product sales									$	30,384

Total provision for product sales allowances and accruals as a percentage of total gross sales										79%

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 March 31, 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 March 31, 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 March 31, 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

3 Months Ended

Mar. 31, 2019

Investments

Investments

5. Investments

Marketable Securities

The Company owned no marketable securities as of March 31, 2019.

Marketable securities consisted of the following 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

3 Months Ended

Mar. 31, 2019

Inventory

Inventory

6. Inventory

Inventory is stated at fair value as of March 31, 2019. Inventory as of December 31, 2018 is stated at the lower of cost or market using actual cost net of reserve for excess and obsolete inventory. The following represents the components of inventory at March 31, 2019 and December 31, 2018:


	Successor		Predecessor
	March 31,		December 31,
(in thousands)	2019		2018
Raw materials	$	2,677	$	1,374
Work in process		843		665
Finished goods		19,756		600
Total	$	23,276	$	2,639

As a result of the Iroko Products Acquisition as of January 31, 2019, the SOLUMATRIX products and the INDOCIN products inventory was acquired and added at its fair value of $28.4 million, with $27.1 million of finished goods inventory and $1.3 million of raw materials inventory.

As a result of fresh start accounting, the Company’s SPRIX Nasal Spray and OXAYDO inventory was adjusted to its fair value 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.

Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2019

Intangible Assets and Goodwill

Intangible Assets and Goodwill

7. Intangible Assets and Goodwill

The following represents the balance of the intangible assets of the Successor Company at March 31, 2019:


	Gross				Net		Remaining Useful
	Intangible		Accumulated		Intangible		Life
(in thousands)	Assets		Amortization		Assets		(in years)
OXAYDO product rights	$	1,300	$	(72)	$	1,228	2.84
SPRIX Nasal Spray product rights		31,900		(591)		31,309	8.84
INDOCIN product rights		90,106		(1,669)		88,437	8.84
Goodwill		58,747		—		58,747	N/A
Total	$	182,053	$	(2,332)	$	179,721

The following represents the balance of the intangible assets of the Predecessor Company at 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

3 Months Ended

Mar. 31, 2019

Accrued Expenses

Accrued Expenses

8. Accrued Expenses

Accrued expenses were as follows:



	Successor		Predecessor
(in thousands)	March 31,		December 31,
	2019		2018
Sales allowances	$	47,683	$	17,174
Professional services		4,490		1,847
Payroll and related		1,684		3,567
Interest		1,036		—
Royalties		601		1,049
Sales and marketing		683		81
Restructuring		621		—
Manufacturing services		14		34
Other		2,113		832
	$	58,925	$	24,584

Debt

3 Months Ended

Mar. 31, 2019

Debt

Debt

9. Debt

Successor Company Debt

The following table summarizes the Successor Company’s debt as of March 31, 2019:


	March 31, 2019
(in thousands)
Series A-1 Notes	$	50,000
Series A-2 Notes		45,000
Royalty rights obligation		5,778
Credit agreement		5,000
Interim promissory note		4,500
		110,278
Unamortized debt discounts		(9,433)
Unamortized deferred financing fees		(253)
Carrying value		100,592
Less: current portion of long-term debt		(2,635)
Net, long-term debt	$	97,957

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 U.S. Bank National Association, a national banking 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 will be 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 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 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 $5.5 million as of March 31, 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, Egalet 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.

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.

At March 31, 2019, unamortized discounts and deferred financing fees on debt consist of the following:


			Deferred
(in thousands)	Discounts		Financing Fees
Series A-1 Notes, interest holiday	$	4,008	$	—
13% Notes, Royalty Rights Obligation		5,227		—
Credit agreement		198		253
	$	9,433	$	253

The following table sets forth the Company’s estimated future principal payments as of March 31, 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 at March 31, 2019:


(in thousands)
Remainder of 2019	$	217
2020		6,672
2021		4,632
2022		12,050
2023		9,897
2024		71,092

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 March 31, 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 March 31, 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

3 Months Ended

Mar. 31, 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 components of lease expense were as follows:


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

Operating lease expense:
Fixed lease cost	$	139	$	69	$	—
Variable lease cost		—		—		—
Short-term lease cost		—		—		—
Total operating lease expense	$	139	$	69	$	—

Supplemental balance sheet information related to leases was as follows:


		Successor
(in thousands)	Location in Balance Sheet	As of March 31, 2019
Operating leases
Operating lease ROU asset	ROU asset - operating lease	$	1,745

Current operating lease liabilities	Other current liabilities		1,043
Non-current operating lease liabilities	Other liabilities		1,165
Total operating lease liability		$	2,208

Supplement lease term and discount rate information related to leases was as follows:


	Successor
	As of March 31, 2019
Weighted-average remaining lease terms

Weighted-average remaining lease term		2.54	years

Weighted-average discount rate		8.0%

Supplemental cash flow information related to leases was as follows:


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

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	211	$	—	$	—

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	2,478	$	—

Future minimum lease payments under noncancelable leases as of March 31, 2019 were as follows:


(in thousands)
2019 (excludes the three months ended March 31, 2019)	$	953
2020		809
2021		555
2022		93
2023		—
Thereafter		—
Total lease payments		2,410
Less: Imputed interest		(202)
Total minimum lease payments	$	2,208

Stockholders' Equity	3 Months Ended
Stockholders' Equity	Mar. 31, 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 values of $0.001 per share. As of March 31, 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 March 31, 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 Board 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. 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 have 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 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 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, underwrite cutbacks, reimbursement of expenses and indemnification.

Fair Value Measurements

3 Months Ended

Mar. 31, 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 March 31, 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 fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis:


(in thousands)	Fair Value Measurements as of March 31, 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	$	—	$	—	$	15,000	$	15,000
Total liabilities	$	—	$	—	$	15,000	$	15,000


(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

- 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

3 Months Ended

Mar. 31, 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. 4,972,364 shares of common stock issuable upon the exercise of warrants “penny warrants” are included in the number of outstanding shares used for the computation of basic and diluted loss per share.

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


	Successor		Predecessor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three Months
	through		through		Ended
(in thousands, except share and per share data)	March 31, 2019		January 31, 2019		March 31, 2018

Basic and diluted net income (loss) per common share calculation:
Net (loss) income per share of common stock—basic and diluted	$	(10,483)	$	107,240	$	(12,354)
Weighted average common stock outstanding		14,333,332		56,547,101		47,303,659
Net (loss) income per share of common stock—basic and diluted	$	(0.73)	$	1.90	$	(0.26)

Stock-Based Compensation

3 Months Ended

Mar. 31, 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 will be administered by the Compensation Committee of the Board (the “Compensation Committee”). In the discretion of the 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 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.

On March 26, 2019, the Compensation Committee of the Company granted 511,000 time-based RSUs and 509,000 performance-based RSUs to certain executive officers of the Company. 367,000 of the time-based RSUs vest ratably over three years. 144,000 of the time-based RSUs vest 100% on the first anniversary of the date of grant. 367,000 of the performance-based RSUs 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). 142,000 of the performance-based RSUs are scheduled 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).

The Company used the Black-Scholes model to estimate the compensation cost for the March 2019 Grant. The Company recognized stock-based compensation expense of $60,000 in the Successor period February 1, 2019 through March 31, 2019.

As of March 31, 2019, there was $6.1 million of total unrecognized stock-based compensation expense, related to restricted stock units under the 2019 Plan.

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. Participants holding time-based RSUs will be entitled to receive the benefit of any dividends paid on shares in the form of additional RSUs, the number of which will be determined by a formula set forth in the Time RSU Agreement.

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 Board 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. Participants holding performance-based RSUs will be entitled to receive the benefit of any dividends paid on shares in the form of additional restricted stock units, the number of which will be determined by a formula set forth in the Performance RSU Agreement.

Shares Available for Future Grant Under Equity Compensation Plans

As of March 31, 2019, the Company has reserved the following shares to be granted under its 2019 Stock Plan:


Shares initially reserved under the 2019 Plan		2,150,000
Time-based restricted stock units granted under the 2019 Plan		(511,000)
Performance-based restricted stock units granted under the 2019 Plan		(509,000)
Remaining shares available for future grant		1,130,000

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

3 Months Ended

Mar. 31, 2019

Restructuring and Other Charges

Restructuring and Other Charges

15. Restructuring and Other Charges

The following table presents a summary of the Company’s restructuring and other charges for the Successor period February 1, 2019 through March 31, 2019 and the Predecessor periods January 1, 2019 through January 31, 2019 and the three months ended March 31, 2018:


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

Severance	$	—	$	776	$	—
Professional fees		—		23		—
Total restructuring and other costs	$	—	$	799	$	—

Restructuring and other charges for the Predecessor period January 1, 2019 through January 31, 2019 primarily reflect severance costs related to the closure of the Denmark facility.

Reorganization items

3 Months Ended

Mar. 31, 2019

Reorganization items

Reorganization items

16. Reorganization items

The Company incurred reorganization items of $606,000 subsequent to the bankruptcy filing in the Successor period February 1, 2019 through March 31, 2019 and a gain of $115.2 million in the Predecessor period January 1, 2019 through January 31, 2019 related to its Chapter 11 filing. See Note 3—Fresh Start Accounting for further details.


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

Professional fees	$	—	$	2,612	$	—
Iroko acquisition related fees		—		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	$	606	$	(115,169)	$	—

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 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 current officer Robert S. Radie and former officers 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 us 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. 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. 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 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. In January 2017, Lupin Pharmaceuticals, Inc. and Lupin Limited (together “Lupin”) notified iCeutica Pty Ltd. and Iroko Pharmaceuticals, LLC that Lupin had submitted an Abbreviated New Drug Application (“ANDA”) to United States Food and Drug Administration (“FDA”) requesting permission to manufacture and market a generic version of VIVLODEX® (meloxicam). In the notice, Lupin alleges that U.S. Patent No. 9,526,734 covering meloxicam is invalid as obvious and that Lupin’s generic product will not infringe any claim of the patent. On February 10, 2017, Plaintiffs iCeutica Pty Ltd. and Iroko Pharmaceuticals, LLC filed a complaint in the District Court for the District of Maryland alleging infringement of U.S. Patent No. 9,526,734 by Lupin under 35 U.S.C. sections 271(e)(2) and 271(a)-(b). On June 5, 2017, Lupin sent a second notice alleging that U.S. Patent No. 9,649,318 was invalid and not infringed. Plaintiffs filed an amended complaint alleging infringement of U.S. Patent Nos. 9,526,734 and 9,649,318 by the Lupin defendants under 35 U.S.C. sections 271(e)(2) and 271(a)-(b) on July 7, 2017. On February 1, 2018, the district court granted Lupin’s motion for summary judgment on non-infringement and dismissed Plaintiffs’ amended complaint. Plaintiffs filed a timely notice of appeal to the United States Court of Appeals for the Federal Circuit and filed their opening brief on July 13, 2018. Lupin filed its answering brief on October 22, 2018 and Plaintiffs filed their reply brief on January 4, 2019. 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 has been 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. 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 has been 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 October 30, 2018, the Company filed the Bankruptcy Petitions in the U. S. Bankruptcy Court for the District of Delaware. 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 intended 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 Debtors to continue to conduct its business in the ordinary course. On January 14, 2019, the Court entered the Confirmation Order confirming the Plan under Chapter 11 of the Bankruptcy Code. On the Effective Date, and substantially concurrent with the consummation of the Iroko Products Acquisition, the Plan became effective. On March 26, 2019, the Bankruptcy Court issued a final decree closing the Chapter 11 Cases.

Acquisitions and License and Collaboration Agreements	3 Months Ended
Acquisitions and License and Collaboration Agreements	Mar. 31, 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, intellectual property and expertise 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 until the expiration of the last-to-expire of any 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 is 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. 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, 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	3 Months Ended
Income Taxes	Mar. 31, 2019
Income Taxes
Income Taxes	19. Income Taxes The Company had a deferred tax liability of $24,000 as of March 31, 2019 and March 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. 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)	3 Months Ended
	Mar. 31, 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 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 March 31, 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	Recent Accounting Pronouncements In February 2016, the 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. 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.

Fresh Start Accounting (Tables)

3 Months Ended

Mar. 31, 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. 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)

3 Months Ended

Mar. 31, 2019

Revenue From Contracts with Customers

Schedule of disaggregation of revenue


	Successor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three months
	through		through		ended
(in thousands)	March 31, 2019		January 31, 2019		March 31, 2018
Product lines
SPRIX Nasal Spray	$	3,830	$	1,354	$	4,814
OXAYDO		673		421		1,260
INDOCIN products		7,499		—		—
SOLUMATRIX products		3,808		—		—
ARYMO ER		—		—		187
Total	$	15,810	$	1,775	$	6,261

Schedule of net product sales allowance and reserve


	Successor
(in thousands)	Fees and distribution costs		Co-pay assistance		Rebates		Returns		Total
Balances at January 31, 2019	$	2,680	$	19,330	$	3,423	$	7,964	$	33,397
Allowances for current period sales		11,161		29,602		3,900		1,262		45,925
Credits or payments made for prior period sales		—		(935)		(692)		(76)		(1,703)
Credits or payments made for current period sales		(921)		(23,474)		(1,016)		—		(25,411)
Balances at March 31, 2019	$	12,920	$	24,523	$	5,615	$	9,150	$	52,208

Total gross product sales									$	61,735

Total provision for product sales allowances and accruals as a percentage of total gross sales										74%



	Predecessor
(in thousands)	Fees and distribution costs		Co-pay 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		595		28		7,784
Assumed liabilities Iroko Acquisition		2,076		5,791		723		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		(65)		—		—		—		(65)
Balances at January 31, 2019	$	2,680	$	19,330	$	3,423	$	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
(in thousands)	Fees and distribution costs		Co-pay 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		2,067		19,541		2,058		277		23,943
Adjustment related to prior period sales		—		—		180		—		180
Credits or payments made for prior period sales		(541)		(6,755)		(797)		—		(8,093)
Credits or payments made for current period sales		(1,333)		(7,979)		(133)		(115)		(9,560)
Balances at March 31, 2018	$	788	$	12,672	$	2,543	$	162	$	16,165

Total gross product sales									$	30,384

Total provision for product sales allowances and accruals as a percentage of total gross sales										79%

Investments (Tables)

3 Months Ended

Mar. 31, 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)

3 Months Ended

Mar. 31, 2019

Inventory

Schedule of components of inventory


	Successor		Predecessor
	March 31,		December 31,
(in thousands)	2019		2018
Raw materials	$	2,677	$	1,374
Work in process		843		665
Finished goods		19,756		600
Total	$	23,276	$	2,639

Intangible Assets and Goodwill (Tables)

3 Months Ended

Mar. 31, 2019

Intangible Assets

Schedule of indefinite-lived intangible assets

The following represents the balance of the intangible assets of the Successor Company at March 31, 2019:


	Gross				Net		Remaining Useful
	Intangible		Accumulated		Intangible		Life
(in thousands)	Assets		Amortization		Assets		(in years)
OXAYDO product rights	$	1,300	$	(72)	$	1,228	2.84
SPRIX Nasal Spray product rights		31,900		(591)		31,309	8.84
INDOCIN product rights		90,106		(1,669)		88,437	8.84
Goodwill		58,747		—		58,747	N/A
Total	$	182,053	$	(2,332)	$	179,721

The following represents the balance of the intangible assets of the Predecessor Company at 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)

3 Months Ended

Mar. 31, 2019

Accrued Expenses

Schedule of accrued expenses



	Successor		Predecessor
(in thousands)	March 31,		December 31,
	2019		2018
Sales allowances	$	47,683	$	17,174
Professional services		4,490		1,847
Payroll and related		1,684		3,567
Interest		1,036		—
Royalties		601		1,049
Sales and marketing		683		81
Restructuring		621		—
Manufacturing services		14		34
Other		2,113		832
	$	58,925	$	24,584

Debt (Tables)

3 Months Ended

Mar. 31, 2019

Debt

Summary of the Successor Company's debt


	March 31, 2019
(in thousands)
Series A-1 Notes	$	50,000
Series A-2 Notes		45,000
Royalty rights obligation		5,778
Credit agreement		5,000
Interim promissory note		4,500
		110,278
Unamortized debt discounts		(9,433)
Unamortized deferred financing fees		(253)
Carrying value		100,592
Less: current portion of long-term debt		(2,635)
Net, long-term debt	$	97,957

Schedule of unamortized discounts and deferred financing fees on debt


			Deferred
(in thousands)	Discounts		Financing Fees
Series A-1 Notes, interest holiday	$	4,008	$	—
13% Notes, Royalty Rights Obligation		5,227		—
Credit agreement		198		253
	$	9,433	$	253

Schedule of Company's estimated future principal payments


(in thousands)
Remainder of 2019	$	217
2020		6,672
2021		4,632
2022		12,050
2023		9,897
2024		71,092

Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases

Schedule of components of lease expense


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

Operating lease expense:
Fixed lease cost	$	139	$	69	$	—
Variable lease cost		—		—		—
Short-term lease cost		—		—		—
Total operating lease expense	$	139	$	69	$	—

Schedule of supplemental balance sheet information


		Successor
(in thousands)	Location in Balance Sheet	As of March 31, 2019
Operating leases
Operating lease ROU asset	ROU asset - operating lease	$	1,745

Current operating lease liabilities	Other current liabilities		1,043
Non-current operating lease liabilities	Other liabilities		1,165
Total operating lease liability		$	2,208

Schedule of supplemental lease term and discount rate information


	Successor
	As of March 31, 2019
Weighted-average remaining lease terms

Weighted-average remaining lease term		2.54	years

Weighted-average discount rate		8.0%

Schedule of supplemental cash flow information


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

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	211	$	—	$	—

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	2,478	$	—

Schedule of future minimum lease payments


(in thousands)
2019 (excludes the three months ended March 31, 2019)	$	953
2020		809
2021		555
2022		93
2023		—
Thereafter		—
Total lease payments		2,410
Less: Imputed interest		(202)
Total minimum lease payments	$	2,208

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 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 March 31, 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	$	—	$	—	$	15,000	$	15,000
Total liabilities	$	—	$	—	$	15,000	$	15,000


(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

Net Loss Per Common Share (Tables)

3 Months Ended

Mar. 31, 2019

Net (Loss) Income Per Common Share

Schedule of computation of basic and diluted net loss per share


	Successor		Predecessor		Predecessor
	Period from		Period from
	February 1, 2019		January 1, 2019		Three Months
	through		through		Ended
(in thousands, except share and per share data)	March 31, 2019		January 31, 2019		March 31, 2018

Basic and diluted net income (loss) per common share calculation:
Net (loss) income per share of common stock—basic and diluted	$	(10,483)	$	107,240	$	(12,354)
Weighted average common stock outstanding		14,333,332		56,547,101		47,303,659
Net (loss) income per share of common stock—basic and diluted	$	(0.73)	$	1.90	$	(0.26)

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 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		(511,000)
Performance-based restricted stock units granted under the 2019 Plan		(509,000)
Remaining shares available for future grant		1,130,000

Restructuring and Other Charges (Tables)

3 Months Ended

Mar. 31, 2019

Restructuring and Other Charges

Schedule of restructuring and other charges


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

Severance	$	—	$	776	$	—
Professional fees		—		23		—
Total restructuring and other costs	$	—	$	799	$	—

Reorganization items (Tables)

3 Months Ended

Mar. 31, 2019

Reorganization items

Schedule of reorganization items


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

Professional fees	$	—	$	2,612	$	—
Iroko acquisition related fees		—		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	$	606	$	(115,169)	$	—

Organization and Description of the Business (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) product
Liquidity [Abstract]
Number of Products \| product	7
Working capital	$ 1,500
Retained Earnings (Accumulated Deficit)	$ (10,483)
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	Mar. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right of use asset, net	$ 1,854	$ 1,745
Lease Liability		$ 2,208
Predecessor
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right of use asset, net	1,854
Accounting Standards Update 2016-02 \| Measurement period adjustments \| Predecessor
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right of use asset, net	2,500
Lease Liability	1,900
Iroko
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Threshold Net Sales for Future Royalty Payments	$ 20,000

Fresh Start Accounting (Details) $ in Millions	Jan. 31, 2019 USD ($)
Fresh-Start Adjustment [Line Items]
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	Mar. 31, 2019	Jan. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 10,387	$ 17,047
Marketable securities, available for sale		4,994
Accounts receivable, net	39,944	4,141
Inventory	23,276	33,838
Prepaid expenses and other current assets	3,258	3,943
Other receivables		133
Total current assets	76,865	64,096
Intangible assets, net	120,974	123,306
Restricted cash	400	400
Property and equipment, net	3,941	4,074
Right of use asset, net	1,745	1,854
Goodwill	58,747	58,747
Deposits and other assets	2,151	1,676
Total assets	264,823	254,153
Current liabilities:
Accounts payable	11,569	8,339
Accrued expenses	58,925	46,800
Deferred revenue	0		$ 0
Debt - current, net	2,635	1,492
Acquisition-related contingent consideration	1,200	1,200
Other current liabilities	1,043	1,030
Total current liabilities	75,372	58,861
Debt - non-current portion, net	92,957	93,371
Acquisition-related contingent consideration	13,800	13,600
Deferred income tax liability	24	24
Other liabilities	1,165	1,360
Total liabilities not subject to compromise	188,318	167,216
Stockholders' deficit:
Common stock	9	9
Additional paid-in capital	86,988	86,928
Other comprehensive income (loss)	(9)
Accumulated deficit	(10,483)
Total stockholders' equity (deficit)	76,505	86,937		$ (33,048)	$ (39,375)
Total liabilities and stockholder's equity (deficit)	$ 264,823	254,153
Predecessor
Current assets:
Cash and cash equivalents		36,785	35,323
Marketable securities, available for sale		4,994	4,988
Accounts receivable, net		4,141	8,006
Inventory		2,299	2,639
Prepaid expenses and other current assets		2,497	2,715
Other receivables		133	846
Total current assets		50,849	54,517
Intangible assets, net		4,109	4,281
Restricted cash		400	400
Property and equipment, net		1,027	1,059
Right of use asset, net		1,854
Deposits and other assets		1,676	1,676
Total assets		59,915	61,933
Current liabilities:
Accounts payable		9,839	8,561
Accrued expenses		26,617	24,584
Deferred revenue		52
Other current liabilities		1,030
Total current liabilities		37,538	33,145
Deferred income tax liability		24	24
Other liabilities		1,463	536
Total liabilities not subject to compromise		39,025	33,705
Liabilities subject to compromise		138,884	139,588
Stockholders' deficit:
Common stock		55	55
Additional paid-in capital		276,880	276,569
Other comprehensive income (loss)		866	869
Accumulated deficit		(395,795)	(388,853)
Total stockholders' equity (deficit)		(117,994)	(111,360)
Total liabilities and stockholder's equity (deficit)		59,915	$ 61,933
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' deficit:
Common stock		(46)
Additional paid-in capital		(189,952)
Accumulated deficit		303,761
Total stockholders' equity (deficit)		113,763
Total liabilities and stockholder's equity (deficit)		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' deficit:
Other comprehensive income (loss)		(866)
Accumulated deficit		92,034
Total stockholders' equity (deficit)		91,168
Total liabilities and stockholder's equity (deficit)		$ 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	Mar. 31, 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 Equity Value in Reorganization	41,630
Fair Value of Contingent Consideration	14,800
Iroko Promissory Note	45,000
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	Mar. 31, 2019	Dec. 31, 2017	Aug. 31, 2016
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	Mar. 31, 2018 USD ($)	Mar. 31, 2019 $ / shares
Fresh-Start Adjustment [Line Items]
Common stock, par value (in dollars per share) \| $ / shares			$ 0.001
Shares issued		$ 4,157
Additional Paid-in Capital
Fresh-Start Adjustment [Line Items]
Shares issued		$ 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	Mar. 31, 2018	Mar. 31, 2019	Aug. 31, 2016
Consideration given pursuant to the Plan
Issuance of new common stock		$ 4,157
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	2 Months Ended	3 Months Ended
	Jan. 31, 2019 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2019	Mar. 31, 2018 USD ($)
Disaggregation of Revenue [Line Items]
Total		$ 15,810
Cash discounts			2
SPRIX Nasal Spray
Disaggregation of Revenue [Line Items]
Total		3,830
OXAYDO tablets
Disaggregation of Revenue [Line Items]
Total		673
INDOCIN
Disaggregation of Revenue [Line Items]
Total		7,499
SOLUMATRIX Products
Disaggregation of Revenue [Line Items]
Total		$ 3,808
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
Predecessor
Disaggregation of Revenue [Line Items]
Total	$ 1,775			$ 6,261
Predecessor \| SPRIX Nasal Spray
Disaggregation of Revenue [Line Items]
Total	1,354			4,814
Predecessor \| OXAYDO tablets
Disaggregation of Revenue [Line Items]
Total	$ 421			1,260
Predecessor \| ARYMO ER
Disaggregation of Revenue [Line Items]
Total				$ 187

Revenue from Contracts with Customers - Reserves for Variable Consideration (Details) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended
	Jan. 31, 2019 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)
Net product sales allowance and reserve [Abstract]
Balances at beginning of period		$ 33,397
Allowances for current period sales		45,925
Credits or payments mad for prior period sales		(1,703)
Credits or payments made for current period sales		(25,411)
Balances at end of period	$ 33,397	52,208
Total gross product sales		$ 61,735
Total provision for product sales allowances and accruals as a percentage of total gross sales		74
Fees and distribution costs
Net product sales allowance and reserve [Abstract]
Balances at beginning of period		$ 2,680
Allowances for current period sales		11,161
Credits or payments made for current period sales		(921)
Balances at end of period	2,680	12,920
Co-pay assistance
Net product sales allowance and reserve [Abstract]
Balances at beginning of period		19,330
Allowances for current period sales		29,602
Credits or payments mad for prior period sales		(935)
Credits or payments made for current period sales		(23,474)
Balances at end of period	19,330	24,523
Rebates
Net product sales allowance and reserve [Abstract]
Balances at beginning of period		3,423
Allowances for current period sales		3,900
Credits or payments mad for prior period sales		(692)
Credits or payments made for current period sales		(1,016)
Balances at end of period	3,423	5,615
Returns
Net product sales allowance and reserve [Abstract]
Balances at beginning of period		7,964
Allowances for current period sales		1,262
Credits or payments mad for prior period sales		(76)
Balances at end of period	7,964	9,150
Predecessor
Net product sales allowance and reserve [Abstract]
Balances at beginning of period	18,472	33,397	$ 4,818
Allowances for current period sales	7,784		23,943
Adjustments			180
Credits or payments mad for prior period sales	(7,328)		(8,093)
Assumed liabilities Iroko Acquisition	14,534
Credits or payments made for current period sales	(65)		(9,560)
Balances at end of period	33,397		16,165
Total gross product sales	$ 9,559		$ 30,384
Total provision for product sales allowances and accruals as a percentage of total gross sales	81		79
Predecessor \| Fees and distribution costs
Net product sales allowance and reserve [Abstract]
Balances at beginning of period	$ 462	2,680	$ 595
Allowances for current period sales	568		2,067
Credits or payments mad for prior period sales	(361)		(541)
Assumed liabilities Iroko Acquisition	2,076
Credits or payments made for current period sales	(65)		(1,333)
Balances at end of period	2,680		788
Predecessor \| Co-pay assistance
Net product sales allowance and reserve [Abstract]
Balances at beginning of period	13,326	19,330	3,644
Allowances for current period sales	6,593		19,541
Credits or payments mad for prior period sales	(6,380)		(6,755)
Assumed liabilities Iroko Acquisition	5,791
Credits or payments made for current period sales			(7,979)
Balances at end of period	19,330		12,672
Predecessor \| Rebates
Net product sales allowance and reserve [Abstract]
Balances at beginning of period	2,664	3,423	579
Allowances for current period sales	595		2,058
Adjustments			180
Credits or payments mad for prior period sales	(559)		(797)
Assumed liabilities Iroko Acquisition	723
Credits or payments made for current period sales			(133)
Balances at end of period	3,423		2,543
Predecessor \| Returns
Net product sales allowance and reserve [Abstract]
Balances at beginning of period	2,020	$ 7,964
Allowances for current period sales	28		277
Credits or payments mad for prior period sales	(28)
Assumed liabilities Iroko Acquisition	5,944
Credits or payments made for current period sales			(115)
Balances at end of period	$ 7,964		162
Predecessor \| ASU 2014-09
Net product sales allowance and reserve [Abstract]
Adjustments			4,877
Predecessor \| ASU 2014-09 \| Co-pay assistance
Net product sales allowance and reserve [Abstract]
Adjustments			4,221
Predecessor \| 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	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Costs to Obtain and Fulfill a Contract
Practical expedient performance obligation	true
Deferred revenue	$ 0	$ 0
Contract assets	$ 0	$ 0

Revenue from Contracts with Customers - Costs to Obtain and Fulfill a Contract (Details)	3 Months Ended
	Mar. 31, 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	Mar. 31, 2019	Jan. 31, 2019	Dec. 31, 2018
Marketable Securities
Marketable Securities	$ 0
Fair Value		$ 4,994
Predecessor
Marketable Securities
Cost Basis			$ 4,990
Unrealized Losses			(2)
Fair Value		$ 4,994	4,988
Predecessor \| Corporate notes and bonds
Marketable Securities
Cost Basis			4,990
Unrealized Losses			(2)
Fair Value			$ 4,988

Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 31, 2019	Dec. 31, 2018
Raw materials	$ 2,677
Work in process	843
Finished goods	19,756
Total	$ 23,276	$ 33,838
Predecessor
Raw materials			$ 1,374
Work in process			665
Finished goods			600
Total		$ 2,299	$ 2,639

Inventory - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 31, 2019
Inventory [Line Items]
Inventory	$ 23,276	$ 33,838
Work in process	843
Finished goods	19,756
Raw materials	$ 2,677
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		28,400
Finished goods		27,100
Raw materials		$ 1,300

Intangible Assets and Goodwill - Balance of Intangible Assets and Impairment (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Jan. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Finite-lived intangible assets
Gross Intangible Assets		$ 182,053
Accumulated Amortization		(2,332)
Net Intangible Assets	$ 123,306	120,974
Net Intangible Assets		179,721
OXAYDO product rights
Finite-lived intangible assets
Gross Intangible Assets		1,300
Accumulated Amortization		(72)
Net Intangible Assets		$ 1,228
Remaining Useful Life		2 years 10 months 2 days
SPRIX Nasal Spray product rights
Finite-lived intangible assets
Gross Intangible Assets		$ 31,900
Accumulated Amortization		(591)
Net Intangible Assets		$ 31,309
Remaining Useful Life		8 years 10 months 2 days
INDOCIN
Finite-lived intangible assets
Gross Intangible Assets		$ 90,106
Accumulated Amortization		(1,669)
Net Intangible Assets		$ 88,437
Remaining Useful Life		8 years 10 months 2 days
INDOCIN \| Iroko
Finite-lived intangible assets
Gross Intangible Assets	$ 90,100
Goodwill
Finite-lived intangible assets
Gross Intangible Assets		$ 58,747
Net Intangible Assets		$ 58,747
Goodwill \| Iroko
Finite-lived intangible assets
Remaining Useful Life	9 years
Predecessor
Finite-lived intangible assets
Accumulated Amortization			$ (8,173)
Gross Intangible Assets			12,454
Net Intangible Assets	$ 4,109		4,281
Predecessor \| OXAYDO product rights
Finite-lived intangible assets
Gross Intangible Assets			7,623
Accumulated Amortization			(4,330)
Net Intangible Assets			$ 3,293
Remaining Useful Life			3 years
Predecessor \| SPRIX Nasal Spray product rights
Finite-lived intangible assets
Gross Intangible Assets			$ 4,831
Accumulated Amortization			(3,843)
Net Intangible Assets			$ 988
Remaining Useful Life			1 year
Fresh Start Adjustments
Finite-lived intangible assets
Net Intangible Assets	29,091
Fresh Start Adjustments \| OXAYDO product rights
Finite-lived intangible assets
Gross Intangible Assets	$ 1,300
Remaining Useful Life	3 years
Fresh Start Adjustments \| SPRIX Nasal Spray product rights
Finite-lived intangible assets
Gross Intangible Assets	$ 31,900
Remaining Useful Life	9 years
Fresh Start Adjustments \| Goodwill
Finite-lived intangible assets
Gross Intangible Assets	$ 58,700

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 31, 2019	Dec. 31, 2018
Sales allowances	$ 47,683
Payroll and related	1,684
Interest	1,036
Professional services	4,490
Royalties	601
Sales and marketing	683
Restructuring	621
Manufacturing services	14
Other	2,113
Total	$ 58,925	$ 46,800
Predecessor
Sales allowances			$ 17,174
Payroll and related			3,567
Professional services			1,847
Royalties			1,049
Sales and marketing			81
Manufacturing services			34
Other			832
Total		$ 26,617	$ 24,584

Debt - Summary of company's debt (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 31, 2019
Debt Instrument [Line Items]
Long-term debt, Gross	$ 110,278
Unamortized debt discount	(9,433)
Unamortized deferred financing fees	(253)
Carrying value	100,592
Less: current portion of long-term debt	(2,635)
Net, long-term debt	97,957
Series A-1 Notes
Debt Instrument [Line Items]
Long-term debt, Gross	50,000
Unamortized debt discount	(4,008)	$ (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	5,778
Unamortized debt discount	(5,227)
Credit agreement
Debt Instrument [Line Items]
Long-term debt, Gross	5,000
Unamortized debt discount	(198)
Unamortized deferred financing fees	(253)
Interim promissory note
Debt Instrument [Line Items]
Long-term debt, Gross	$ 4,500

Debt - Agreements (Details)		2 Months Ended
Debt - Agreements (Details)	Jan. 31, 2019 USD ($) shares	Mar. 31, 2019 USD ($) $ / shares shares	Feb. 01, 2019 $ / shares shares	Mar. 31, 2018 shares	Dec. 31, 2017 USD ($) shares	Aug. 31, 2016
Subsequent Events
Discounts		$ 9,433,000
Repurchase price of principal amount of the Notes, plus accrued and unpaid interest	101.00%
Cash and cash equivalents	$ 17,047,000	10,387,000
Net product sales		15,810,000
Current liabilities	$ 58,861,000	$ 75,372,000
Exercise price of warrants (in dollars per share) \| $ / shares			$ 0.001
Common stock, authorized \| shares	275,000,000	100,000,000	100,000,000
Common stock issued \| shares		9,360,968
Warrants issued \| shares			4,972,365
Common stock outstanding \| shares		9,360,968
INDOCIN
Subsequent Events
Net product sales		$ 7,499,000
Preemptive Rights Agreements \| Minimum \| Iroko
Subsequent Events
Ownership percent held	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%
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%
Aggregate principal amount of debt issued	$ 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
Series A-1 Notes
Subsequent Events
Discounts	4,600,000	$ 4,008,000
Series A-1 Notes \| Asset Purchase Agreement
Subsequent Events
Aggregate principal amount of debt issued	$ 50,000,000
Unsecured Promissory Note \| Asset Purchase Agreement \| Iroko
Subsequent Events
Interest rate (as a percent)	8.00%
Principal amount of notes issued as consideration	$ 4,500,000
6.50% Notes
Subsequent Events
Interest rate (as a percent)		6.50%
Aggregate principal amount of debt issued					$ 23,900,000
Exercise price of warrants (in dollars per share) \| $ / shares		$ 0.01
Warrants issued \| shares				1,000,000	2,500,000

Debt - Revolving Credit Agreement (Details)	Mar. 20, 2019 USD ($)
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%
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	Mar. 31, 2019
Debt Instrument [Line Items]
Discounts		$ 9,433
Deferred Financing Fees		253
Series A-1 Notes
Debt Instrument [Line Items]
Discounts	$ 4,600	4,008
Royalty rights obligation
Debt Instrument [Line Items]
Discounts		5,227
Credit agreement
Debt Instrument [Line Items]
Discounts		198
Deferred Financing Fees		$ 253
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	Mar. 31, 2019 USD ($)
Long-term Debt, Fiscal Year Maturity [Abstract]
Remainder of 2019	$ 217
2020	6,672
2021	4,632
2022	12,050
2023	9,897
2024	$ 71,092

Debt - Convertible Senior Notes (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended
	Jan. 31, 2019	Jan. 31, 2019	Mar. 31, 2019	Feb. 01, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017	Aug. 31, 2016	May 31, 2015
Long-term Debt
Common stock, par value (in dollars per share)			$ 0.001
Exercise price (in dollars per share)				$ 0.001
Number of shares callable by warrants				4,972,365
Carrying amount			$ 110,278
Unamortized debt discount			(9,433)
Carrying value			$ 100,592
common stock shares authorized	275,000,000	275,000,000	100,000,000	100,000,000
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%
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)	$ (4,008)
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)	3 Months Ended
Leases - (Details)	Mar. 31, 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		2 Months Ended
	Jan. 01, 2019	Mar. 31, 2019
Components of lease expense
Fixed lease cost	$ 69	$ 139
Total operating lease expense	$ 69	$ 139

Leases - Balance sheet information (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 31, 2019
Balance sheet information:
Operating lease ROU asset	$ 1,745	$ 1,854
Financial position	us-gaap:OperatingLeaseRightOfUseAsset
Current operating lease liabilities	$ 1,043
Financial position	us-gaap:OtherLiabilitiesCurrent
Non-current operating lease liabilities	$ 1,165
Financial position	us-gaap:OtherLiabilitiesNoncurrent
Total operating leas liability	$ 2,208
Financial position	us-gaap:OtherLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent

Leases - Lease term and discount rate information (Details)	Mar. 31, 2019
Leases
Weighted-average remaining lease term	2 years 6 months 15 days
Weighted-average discount rate	8.00%

Leases - Cash flow information (Details) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended
	Jan. 31, 2019	Mar. 31, 2019
Leases
Operating cash flows from operating leases		$ 211
Right-of-use assets obtained in exchange for lease obligations - Operating leases	$ 2,478

Leases - Future minimum lease payments (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Future minimum lease payments:
2019 (excludes the three months ended March 31, 2019)	$ 953
2020	809
2021	555
2022	93
Total lease payments	2,410
Less: Imputed interest	(202)
Total minimum lease payments	$ 2,208

Stockholders Equity (Details) - $ / shares	Mar. 31, 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
Common stock, par value (in dollars per share)	$ 0.001
Common stock, issued	9,360,968
Common stock, outstanding	9,360,968
Predecessor
common stock shares authorized				275,000,000
Common stock, par value (in dollars per share)				$ 0.001
Common stock, issued	4,774,093			56,547,101
Common stock, outstanding				56,547,101
Iroko and affiliates
Common stock, issued	4,586,875

Stockholders Equity - Amended and Restated Charter and Bylaws (Details) - $ / shares	Feb. 01, 2019	Mar. 31, 2019	Jan. 31, 2019
Equity [Abstract]
Common Stock, Shares Authorized	100,000,000	100,000,000	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	4,972,365
Exercise price (in dollars per share)	$ 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	Mar. 31, 2019	Jan. 31, 2019	Dec. 31, 2018
Fair Value Measurements
Marketable securities, available for sale		$ 4,994
Iroko \| INDOCIN
Fair Value Measurements
Contingent payment consideration	$ 20,000
Recurring basis
Fair Value Measurements
Cash equivalents (money market funds and commercial paper)	76
Total assets	76
Acquisition-related contingent consideration	15,000
Total liabilities	15,000
Recurring basis \| Level 1
Fair Value Measurements
Cash equivalents (money market funds and commercial paper)	76
Total assets	76
Recurring basis \| Level 3
Fair Value Measurements
Acquisition-related contingent consideration	15,000
Total liabilities	$ 15,000
Predecessor
Fair Value Measurements
Marketable securities, available for sale		$ 4,994	$ 4,988
Predecessor \| Recurring basis
Fair Value Measurements
Cash equivalents (money market funds and commercial paper)			22,996
Marketable securities, available for sale			4,988
Total assets			27,984
Predecessor \| Recurring basis \| Level 1
Fair Value Measurements
Cash equivalents (money market funds and commercial paper)			22,996
Total assets			22,996
Predecessor \| Recurring basis \| Level 2
Fair Value Measurements
Marketable securities, available for sale			4,988
Total assets			$ 4,988

Net (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended
	Jan. 31, 2019	Mar. 31, 2019	Mar. 31, 2019	Mar. 31, 2018
Basic and diluted net loss per common share calculation:
Shares excluded from the calculation of diluted weighted average shares outstanding, as they would be anti-dilutive			4,972,364
Net (loss) income		$ (10,483)		$ (12,355)
Weighted-average common stock outstanding		14,333,332
Net (loss) income per share of common stock, basic and diluted (in dollars per share)		$ (0.73)
5.50% Notes
Basic and diluted net loss per common share calculation:
Interest rate (as a percent)		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%
Predecessor
Basic and diluted net loss per common share calculation:
Net (loss) income	$ 107,240			$ (12,354)
Weighted-average common stock outstanding	56,547,101			47,303,659
Net (loss) income per share of common stock, basic and diluted (in dollars per share)	$ 1.90			$ (0.26)

Stock-Based Compensation - 2019 Stock-Based Incentive Compensation Plan (Details) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended
	Jan. 31, 2019 USD ($)	Mar. 31, 2019 USD ($) shares	Mar. 31, 2019 USD ($) item shares	Mar. 31, 2018 USD ($)
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
Share-based compensation expense recognized \| $		$ 60
Share-based Compensation \| $		60
Time-Based Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan			511,000
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
2019 Stock Plan \| Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense \| $		$ 6,100	$ 6,100
2019 Stock Plan \| Time-Based Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
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]
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 \| Executives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock initially reserved for issuance (in shares)		1,433,333	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			367,000
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 per year			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	716,667
Predecessor
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation \| $	$ 4,125			$ 952

Stock-Based Compensation - Equity Compensation Plans (Details)	3 Months Ended
	Mar. 31, 2019 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares initially reserved under the 2019 Plan	2,150,000
Remaining shares available for future grant	1,130,000
Time-Based Restricted Stock Unit
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted under the 2019 Plan	(511,000)
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)

Restructuring and Other Charges (Details) - Predecessor $ in Thousands	1 Months Ended
	Jan. 31, 2019 USD ($)
Severance	$ 776
Professional fees	23
Total restructuring and other costs	$ 799

Reorganization items (Details) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended
Reorganization items (Details) - USD ($) $ in Thousands	Jan. 31, 2019	Mar. 31, 2019
Bankruptcy fees		$ 606
Total reorganization charges		$ 606
Predecessor
Professional Fees	$ 2,612
Iroko acquisition related fees	2,138
Legal fees	713
Other reorganization expenses	473
Bankruptcy fees	42
Gain on extinguishment of debt	(29,976)
Revaluation of assets and liabilities	(91,171)
Total reorganization charges	$ (115,169)

Commitments and Contingencies (Detail) - security	Feb. 10, 2017	Jan. 27, 2017
Commitments and Contingencies
Number of putative securities	2	2

Acquisitions and License and Collaboration Agreements - Shionogi and Acura (Details) $ in Millions	1 Months Ended	3 Months Ended
	Jan. 31, 2015 USD ($)	Mar. 31, 2019 item
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 [Member]
License and collaboration agreement
Percentage of royalty to pay		5.00%

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 31, 2018
Income Taxes
Deferred tax liability	$ 24,000	$ 24,000