Audit Information |
12 Months Ended |
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Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Iselin, NJ |
Auditor Firm ID | 42 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 900,000,000 | 900,000,000 |
Common stock, shares issued (in shares) | 149,413,000 | 147,674,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 152,117,000 | 152,117,000 |
Nature of Operations |
12 Months Ended |
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Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Amneal Pharmaceuticals, Inc. (the “Company”) is a pharmaceutical company specializing in developing, manufacturing, marketing and distributing high-value generic and branded specialty pharmaceutical products across a broad array of dosage forms and therapeutic areas. The Company operates principally in the United States, India, and Ireland, and sells to wholesalers, distributors, hospitals, chain pharmacies and individual pharmacies, either directly or indirectly. The Company is a holding company, whose principal assets are common units (“Amneal Common Units”) of Amneal Pharmaceuticals, LLC (“Amneal”). The group, together with their affiliates and certain assignees, who owned Amneal when it was a private company (the “Members” or the “Amneal Group”) held 50.4% of Amneal Common Units and the Company held the remaining 49.6% as of December 31, 2021. In 2018, Amneal completed the acquisition of Impax Laboratories, Inc. (“Impax”), a generic and specialty pharmaceutical company.
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Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Accounting Principles The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated. Principles of Consolidation Although the Company has a minority economic interest in Amneal, it is Amneal’s sole managing member, having the sole voting power to make all of Amneal’s business decisions and controls its management. Therefore, the Company consolidates the financial statements of Amneal and its subsidiaries. The Company records non-controlling interests for the portion of Amneal’s economic interests that it does not hold. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company's management to make estimates and assumptions that affect the reported financial position at the date of the financial statements and the reported results of operations during the reporting period. Such estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The following are some, but not all, of such estimates: the determination of chargebacks, sales returns, rebates, billbacks, valuation of intangible and other assets acquired in business combinations, allowances for accounts receivable, accrued liabilities, contingent liabilities, initial and subsequent valuation of contingent consideration recognized in business combinations, stock-based compensation, valuation of inventory balances, the determination of useful lives for product rights and the assessment of expected cash flows used in evaluating goodwill and other long-lived assets for impairment. Actual results could differ from those estimates. Revenue Recognition When assessing its revenue recognition, the Company performs the following five steps: (i) identify the contract 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 entity satisfies the performance obligation. The Company recognizes revenue when it transfers control of its products to customers, in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those products. For further details on the Company’s revenue recognition policies, refer to Note 4. Revenue Recognition. Stock-Based Compensation The Company’s stock-based compensation consists of stock options, restricted stock units ("RSUs") and market performance-based restricted stock units (“MPRSUs”) awarded to employees and non-employee directors. Stock options are measured at their fair value on the grant date or date of modification, as applicable. RSUs, including MPRSUs, are measured at the stock price on the grant date or date of modification, as applicable. The Company recognizes compensation expense on a straight-line basis over the requisite service and/or performance period, as applicable. Forfeitures of awards are accounted for as a reduction in stock-based compensation expense in the period such awards are forfeited. The Company's policy is to issue new shares upon option exercises and the vesting of RSUs and MPRSUs. Contingent consideration Business acquisitions may include future payments that are contingent upon the occurrence of certain pharmaceutical regulatory milestones or net sales of pharmaceutical products. For acquisitions that are accounted for as a business combination, the obligations for such contingent consideration payments are recorded at fair value on the acquisition date. For contingent milestone payments, the Company uses a probability-weighted income approach utilizing an appropriate discount rate. For contingent tiered royalties on net sales, the Company uses a Monte Carlo simulation model. Contingent consideration liabilities are revalued to fair value at the end of each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in fair value of contingent consideration in the consolidated statements of operations. Refer to Note 3. Acquisitions and Divestitures and Note 19. Fair Value Measurements for additional information. Foreign Currencies The Company has operations in the U.S., India, Ireland, and other foreign jurisdictions. Generally, the Company’s foreign operating subsidiaries’ functional currency is the local currency. The results of its non-U.S. dollar based operations are translated to U.S. dollars at the average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Translation adjustments are included in accumulated other comprehensive loss and non-controlling interests in the consolidated balance sheets and are included in comprehensive income (loss). Transaction gains and losses are included in net income (loss) in the Company’s consolidated statements of operations as a component of foreign exchange (loss) gain, net. Such foreign currency transaction gains and losses include fluctuations related to long term intercompany loans that are payable in the foreseeable future. Translation gains and losses on intercompany balances of a long-term investment nature are included in foreign currency translation adjustments in accumulated other comprehensive income (loss) and non-controlling interests, and comprehensive income (loss). Business Combinations Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, the acquiring entity in a business combination records the assets acquired and liabilities assumed at the date of acquisition at their fair values. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill. Acquisition-related costs, primarily professional fees, are expensed as incurred. Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit and highly liquid investments with original maturities of three months or less. A portion of the Company’s cash flows are derived outside the U.S. As a result, the Company is subject to market risk associated with changes in foreign exchange rates. The Company maintains cash balances at both U.S.-based and international-based commercial banks. At various times during the year, cash balances in the U.S. may exceed amounts that are insured by the Federal Deposit Insurance Corporation. Restricted Cash At December 31, 2021 and 2020, respectively, the Company had restricted cash balances of $9 million and $6 million in its bank accounts primarily related to the purchase of certain land and equipment in India. Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company limits its credit risk with respect to accounts receivable by performing credit evaluations when deemed necessary. The Company does not require collateral to secure amounts owed to it by its customers. Trade accounts receivable are stated at their net realizable value. The allowance for credit losses reflects the best estimate of expected credit losses of the accounts receivable portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions. The Company determines its allowance methodology by pooling receivable balances at the customer level. The Company consider various factors, including its previous loss history, individual credit risk associated to each customer, and the current and future condition of the general economy. These credit risk factors are monitored on a quarterly basis and updated as necessary. To the extent that any individual debtor is identified whose credit quality has deteriorated, the Company establishes allowances based on the individual risk characteristics of such customer. The Company makes concerted efforts to collect all outstanding balances due from customers; however, account balances are charged off against the allowance when management believes it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to customers. Chargebacks Received from Manufacturers When a sale occurs on a contracted item, the difference between the cost the Company pays to the manufacturer of that item and the contract price that the end customer has with the manufacturer is rebated to the Company by the manufacturer as a chargeback. Chargebacks are recorded as a reduction to cost of sales and either a reduction in the amount due to the manufacturer (if there is a right of offset) or as a receivable from the manufacturer. Inventories Inventories consist of finished goods held for sale, raw materials, and work in process. Inventories are stated at net realizable value, with cost determined using the first-in, first-out method. Adjustments for excess and obsolete inventories are established based upon historical experience and management’s assessment of current product demand. These assessments include inventory obsolescence based on its expiration date, damaged or rejected product, and slow-moving products. Property, Plant, and Equipment Property, plant, and equipment are stated at historical cost less accumulated depreciation. Depreciation expense is computed primarily using the straight-line method over the estimated useful lives of the assets, which are as follows:
Upon retirement or disposal, the cost of the asset disposed and the accumulated depreciation are removed from the accounts, and any gain or loss is reflected as part of operating income (loss) in the period of disposal. Expenditures that significantly increase value or extend useful lives of property, plant, and equipment are capitalized, whereas those for normal maintenance and repairs are expensed. The Company capitalizes interest on borrowings during the construction period of major capital projects as part of the related asset and amortizes the capitalized interest into earnings over the related asset’s remaining useful life. Leases All significant lease arrangements are recognized as right-of-use (“ROU”) assets and lease liabilities at lease commencement. ROU assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of the future lease payments using the Company's incremental borrowing rate, which is assessed quarterly. Operating lease expense is recognized on a straight-line basis over the lease term. At each balance sheet date, operating and financing lease liabilities continue to represent the present value of the future payments. Financing lease ROU assets are expensed using the straight-line method, unless another basis is more representative of the pattern of economic benefit, to lease expense. Interest on financing lease liabilities is recognized in interest expense. Leases with an initial term of 12 months or less (short-term leases) are not recognized in the balance sheet and the related lease payments are recognized as incurred over the lease term. The Company separates lease and non-lease components. A portion of the Company's real estate leases are subject to periodic changes in the Consumer Price Index ("CPI"). The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. For further details regarding the Company's leases, refer to Note 12. Leases. In-Process Research and Development The fair value of in-process research and development (“IPR&D”) acquired in a business combination is determined based on the present value of each research project’s projected cash flows using an income approach. Revenues are estimated based on relevant market size and growth factors, expected industry trends, individual project life cycles and the life of each research project’s underlying marketability. In determining the fair value of each research project, expected cash flows are adjusted for certain risks of completion, including technical and regulatory risk. The value attributable to IPR&D projects at the time of acquisition is capitalized as an indefinite-lived intangible asset and tested for impairment until the project is completed or abandoned. Upon completion of the project, the indefinite-lived intangible asset is then accounted for as a finite-lived intangible asset and amortized over the estimated useful life of the asset based on the pattern in which the economic benefits are expected to be consumed or otherwise used up or, if that pattern is not readily determinable, on a straight-line basis. If the project is abandoned, the indefinite-lived intangible asset is charged to expense. Intangible assets with indefinite lives, including IPR&D, are tested for impairment if impairment indicators arise and, at a minimum, annually. However, an entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that an indefinite-lived intangible asset’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. The indefinite-lived intangible asset impairment test consists of a one-step analysis that compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company considers many factors in evaluating whether the value of its intangible assets with indefinite lives may not be recoverable, including, but not limited to, expected growth rates, the cost of equity and debt capital, general economic conditions, the Company's outlook and market performance of the Company's industry and recent and forecasted financial performance. Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable. In order to test goodwill for impairment, an entity is permitted to first assess qualitative factors to determine whether a quantitative assessment of goodwill is necessary. The qualitative factors considered by the Company may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. If a quantitative assessment is required, the Company determines the fair value of its reporting unit using a combination of the income and market approaches. If the net book value of the reporting unit exceeds its fair value, the Company recognizes a goodwill impairment charge for the reporting unit equal to the lesser of (i) the total goodwill allocated to that reporting unit and (ii) the amount by which that reporting unit’s carrying amount exceeds its fair value. See Note 15. Goodwill and Other Intangible Assets, for further discussion of the Company's quantitative assessment of goodwill. Assumptions and estimates used in the evaluation of impairment may affect the carrying value of long-lived assets, which could result in impairment charges in future periods. Such assumptions include projections of future cash flows and the current fair value of the asset. Amortization of Intangible Assets with Finite Lives Intangible assets, other than indefinite-lived intangible assets, are amortized over the estimated useful life of the asset based on the pattern in which the economic benefits are expected to be consumed or otherwise used up or, if that pattern is not readily determinable, on a straight-line basis. The useful life is the period over which the assets are expected to contribute directly or indirectly to future cash flows. Intangible assets are not written-off in the period of acquisition unless they become impaired during that period. The Company regularly evaluates the remaining useful life of each intangible asset that is being amortized to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of the intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. See Note 15. Goodwill and Other Intangible Assets, for further discussion of the Company's intangible assets. Impairment of Long-Lived Assets (Including Intangible Assets with Finite Lives) The Company reviews its long-lived assets, including intangible assets with finite lives, for recoverability whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets and fair value which is generally an expected present value cash flow technique. Management’s policy in determining whether an impairment indicator exists comprises measurable operating performance criteria as well as other qualitative measures. See Note 15. Goodwill and Other Intangible Assets, for further discussion of the Company's assessment of intangible asset impairment. Financial Instruments The Company minimizes its risks from interest fluctuations through its normal operating and financing activities and, when deemed appropriate through the use of derivative financial instruments. Derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. The Company does not use leveraged derivative financial instruments. Derivative financial instruments that qualify for hedge accounting must be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract. All derivatives are recorded on the balance sheet as assets or liabilities and measured at fair value. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive loss, net of income taxes and subsequently amortized as an adjustment to interest expense over the period during which the hedged forecasted transaction affects earnings, which is when the Company recognizes interest expense on the hedged cash flows. Cash flows of such derivative financial instruments are classified consistent with the underlying hedged item. Highly effective hedging relationships that use interest rate swaps as the hedging instrument and that meet criteria under ASC 815, Derivatives and Hedging, may qualify for the “short-cut method” of assessing effectiveness. The short-cut method allows the Company to make the assumption of no ineffectiveness, which means that the change in fair value of the hedged item can be assumed to be equal to the change in fair value of the derivative. Unless critical terms change, no further evaluation of effectiveness is performed for these hedging relationships unless a critical term is changed. For a hedging relationship that does not qualify for the short-cut method, the Company measures its effectiveness using the “hypothetical derivative method”, in which the change in fair value of the hedged item must be measured separately from the change in fair value of the derivative. At inception and quarterly thereafter, the Company formally assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged item. The Company compares the change in the fair value of the actual interest rate derivative to the change in the fair value of a hypothetical interest rate derivative with critical terms that match the hedged interest rate payments. After the initial quantitative assessment, this analysis is performed on a qualitative basis and, if it is determined that the hedging relationship was and continues to be highly effective, no further analysis is required. All components of each derivative financial instrument's gain or loss are included in the assessment of hedge effectiveness. If it is determined that a derivative ceases to be a highly effective hedge, the Company discontinues hedge accounting and any deferred gains or losses related to a discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive income (loss) net of income taxes, unless it is probable that the forecasted transaction will not occur. If it is probable that the forecasted transaction will not occur by the originally specified time period, the Company discontinues hedge accounting, and any deferred gains or losses reported in accumulated other comprehensive income (loss) are classified into earnings immediately. The Company is subject to credit risk as a result of nonperformance by counterparties to the derivative agreements. Upon inception and quarterly thereafter, the Company makes judgments on each counterparty’s creditworthiness for nonperformance by counterparties. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss) and all changes in stockholders’ equity (except those arising from transactions with stockholders) including foreign currency translation adjustments resulting from the consolidation of foreign subsidiaries’ financial statements and unrealized gains on cash flows hedges, net of income taxes. Research and Development Research and development ("R&D") activities are expensed as incurred. R&D expenses primarily consist of direct and allocated expenses incurred with the process of formulation, clinical research, and validation associated with new product development. Upfront and milestone payments made to third parties in connection with R&D collaborations are expensed as incurred up to the point of regulatory approval or when there is no alternative future use. Intellectual Property Legal Development Expenses The Company expenses external intellectual property legal development expenses as incurred. These costs relate to legal challenges of innovator’s patents for invalidity or non-infringement, which are customary in the generic pharmaceutical industry, and are incurred predominately during development of a product and prior to regulatory approval. Associated costs include, but are not limited to, formulation assessments, patent challenge opinions and strategy, and litigation expenses to defend the intellectual property supporting the Company's regulatory filings. Shipping Costs The Company records the costs of shipping product to its customers as a component of selling, general, and administrative expenses as incurred. Shipping costs were $18 million, $17 million and $15 million for the years ended December 31, 2021, 2020 and 2019, respectively. Recently Issued Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides elective amendments for entities that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), to expand and clarify the scope of Topic 848 to include derivative instruments on discounting transactions. The amendments in this ASU are effective in the same timeframe as ASU 2020-04. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities About Government Assistance, which requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. The new standard is effective for the Company on January 1, 2022 and only impacts annual financial statement footnote disclosures. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. Reclassification Prior period balances related to (i) financing lease right-of-use assets of $10 million formerly included in other assets, (ii) current portion of financing lease liabilities of $2 million formerly included in accounts payable and accrued expenses, and (iii) long-term lease liabilities of $2 million formerly included in other long-term liabilities as of December 31, 2020 have been reclassified to their respective balance sheet captions to conform to the current period presentation in the consolidated balance sheets.
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Acquisitions and Divestitures |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions Puniska Healthcare Pvt. Ltd. On November 2, 2021, the Company entered into a definitive agreement to acquire Puniska Healthcare Pvt. Ltd. (“Puniska”), a privately held manufacturer of parenteral and injectable drugs in India, and land in a transaction valued at $93 million (the "Puniska Acquisition"). Upon execution of the agreement, the Company paid $73 million with cash on hand for approximately 74% of the equity interests of Puniska. Upon approval of the transaction by the government of India, the Company will pay with cash on hand an additional $2 million for the remaining 26% of the equity interests of Puniska (included in redeemable non-controlling interests in the Company’s consolidated balance sheet as of December 31, 2021) and $14 million for the satisfaction of a preexisting payable to the sellers (included in related party payables-short term in the Company’s consolidated balance sheet as of December 31, 2021). The Company expects approval from the government of India in the first half of 2022. During December 2021, the Company paid $4 million with cash on hand for land associated with the Puniska Acquisition. For the year ended December 31, 2021, the Company incurred $1 million in transaction costs associated with the Puniska Acquisition, which were recorded in acquisition, transaction-related and integration expenses. The Puniska Acquisition, excluding the land acquired in December 2021, was accounted for under the acquisition method of accounting, with Amneal as the accounting acquirer. The preliminary purchase price was calculated as follows (in thousands):
(1)Cash includes the payment made upon execution of the agreement. (2)Due to the short-term nature of the payable to the sellers, the principal amount approximates fair value. The following is a summary of the preliminary purchase price allocation for the Puniska Acquisition (in thousands):
Goodwill is calculated as the excess of the consideration transferred and fair value of the redeemable non-controlling interests over the net assets recognized. All of the goodwill acquired in connection with the Puniska Acquisition was allocated to the Company’s Generics segment. From the acquisition date of November 2, 2021 to December 31, 2021, the Puniska Acquisition contributed an operating loss of $2 million. Kashiv Specialty Pharmaceuticals, LLC Acquisition On January 11, 2021, the Company and Kashiv Biosciences, LLC (a related party, see Note 24. Related Party Transactions) (“Kashiv”) entered into a definitive agreement for Amneal to acquire a 98% interest in Kashiv Specialty Pharmaceuticals, LLC (“KSP”), a subsidiary of Kashiv focused on the development of innovative drug delivery platforms, novel 505(b)(2) drugs and complex generics (the “KSP Acquisition”). On April 2, 2021, the Company completed the KSP Acquisition. Under the terms of the transaction, the cash portion of the consideration was $104 million, comprised of a purchase price of $100 million (including initial and deferred consideration) and a working capital adjustment of $4 million. The cash purchase price was funded by cash on hand. For further detail of the purchase price, refer to the table below. For the year ended December 31, 2021, the Company incurred $3 million in transaction costs associated with the KSP Acquisition, which were recorded in acquisition, transaction-related and integration expenses. The KSP Acquisition was accounted for under the acquisition method of accounting, with Amneal as the accounting acquirer. The purchase price was calculated as follows (in thousands):
(1)The deferred consideration is stated at the fair value estimate of $30.1 million, which is the $30.5 million contractually stated amount less a $0.4 million discount. The deferred consideration consists of $30 million which was paid on January 11, 2022 and $0.5 million which is due on March 10, 2022. As the deferred consideration is non-interest bearing, the Company, using guideline companies and market borrowings with comparable risk profiles, discounted the deferred consideration at 1.7% over the period from April 2, 2021 to the maturity dates, for a fair value of $30.1 million on the date of acquisition. This discount will be amortized to interest expense over the life of the deferred consideration utilizing the effective interest rate method. (2)Kashiv is eligible to receive up to an additional $8 million in contingent payments upon the achievement of certain regulatory milestones and potential royalty payments from high single-digits to mid double-digits, depending on the amount of aggregate annual net sales for certain future pharmaceutical products. The estimated fair value of contingent consideration on the acquisition date was $6 million and was based on significant Level 3 inputs that were not observable in the market. Key assumptions included the discount rate, probability of achievement of milestones, projected year of payments and expected net product sales. Refer to Note 19. Fair Value Measurements, for additional information on the methodology and determination of this liability. (3)Represents trade accounts payable due to KSP that were effectively settled upon closing of the KSP Acquisition. The following is a summary of the purchase price allocation for the KSP Acquisition (in thousands):
Total acquired intangible assets of $56 million were comprised of marketed product rights of $29 million and in-process research and development (“IPR&D”) of $27 million. The acquired intangible assets are being amortized over their estimated useful lives as follows (in thousands):
The estimated fair value of the in-process research and development and identifiable intangible assets was determined using the "income approach," which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. The assumptions, including the expected projected cash flows, utilized in the purchase price allocation and in determining the purchase price were based on management's best estimates as of the closing date of the KSP Acquisition on April 2, 2021. Some of the more significant assumptions inherent in the development of those asset valuations included the estimated net cash flows for each year for each asset or product (including net revenues, cost of sales, R&D, selling and marketing costs and working capital / contributory asset charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, the potential regulatory and commercial success risks, competitive trends impacting the asset and each cash flow stream, as well as other factors. The underlying assumptions used to prepare the discounted cash flow analysis may change; accordingly, for these and other reasons, actual results may vary significantly from estimated results. Goodwill is calculated as the excess of the consideration transferred and fair value of the non-controlling interests over the net assets recognized. Of the total goodwill acquired in connection with the KSP Acquisition, $41 million was allocated to the Company’s Generics segment and $3 million was allocated to the Specialty segment, based on the probability weighted cash flows of the assets acquired as of the date of acquisition. From the acquisition date of April 2, 2021, to December 31, 2021, the KSP Acquisition contributed an operating loss to the Company’s consolidated statements of operations of $21 million, which included approximately $6 million of amortization expense from intangible assets acquired in the KSP Acquisition. Offsetting the operating loss was a reduction of third-party consulting services and the elimination of royalties due to KSP. AvKARE and R&S Acquisitions On December 10, 2019, the Company, through its investment in Rondo Partners, LLC (“Rondo”), entered into an equity purchase agreement (“Rondo Equity Purchase Agreement”) and an operating agreement to acquire a 65.1% controlling financing interest in both AvKARE Inc., a Tennessee corporation, and Dixon-Shane, LLC d/b/a R&S Northeast LLC, a Kentucky limited liability company (“R&S”) (collectively the “Rondo Acquisitions”). Prior to closing, AvKARE, Inc. converted to a limited liability company, AvKARE, LLC. AvKARE, LLC is one of the largest private label providers of generic pharmaceuticals in the U.S. federal agency sector, primarily focused on serving the Department of Defense and the Department of Veterans Affairs. R&S is a national pharmaceutical wholesaler focused primarily on offering 340b-qualified entities products to provide consistency in care and pricing. On January 31, 2020, the Company completed the Rondo Acquisitions. The purchase price of $294 million included cash of $254 million, the issuance of long-term promissory notes to the sellers with an aggregate principal amount of $44 million (estimated fair value of $35 million) (the “Sellers Notes”) and a short-term promissory note (the “Short-Term Seller Note”) with a principal amount of $1 million to the sellers. The cash purchase price was funded by $76 million of cash on hand and debt of $178 million of proceeds from a $180 million term loan. The remaining $2 million consisted of working capital costs. The Company is not party to or a guarantor of the term loan, the Sellers Notes or the Short-Term Seller Note. (Refer to Note 17. Debt). For further details of the purchase price, refer to the table below. For the year ended December 31, 2020, the Company incurred $1 million in transaction costs associated with the Rondo Acquisitions, which was recorded in acquisition, transaction-related and integration expenses (none in 2020 and 2019). The Rondo Acquisitions were accounted for under the acquisition method of accounting, with Amneal as the accounting acquirer of AvKARE, LLC and R&S. The purchase price was calculated as follows (in thousands):
(1)In accordance with ASC 805, Business Combinations, all consideration transferred was measured at its acquisition-date fair value. The Sellers Notes were stated at the fair value estimate of $35 million, which is the $44 million aggregate principal amount less a $9 million discount. The fair value of the Sellers Notes was estimated using the Monte-Carlo simulation approach under the option pricing framework. (2)Represents trade accounts receivable from R&S that was effectively settled upon closing of the Rondo Acquisitions. (3)Represents the principal amount due on the Short-Term Seller Note, which approximates fair value. (4)Represents a working capital adjustment pursuant to the terms of the purchase agreement. The entire amount was received in cash by the Company in September 2020. The following is a summary of the purchase price allocation for the Rondo Acquisitions (in thousands):
The acquired intangible assets are being amortized over their estimated useful lives as follows (in thousands):
The estimated fair value of the government licenses was determined using the “with-and-without method,” which is a valuation technique that provides an estimate of the fair value of an intangible asset that is equal to the difference between the present value of the prospective revenues and expenses for the business with and without the subject intangible asset in place. The estimated fair values of the government contracts, national contracts, and customer relationships were determined using the “income approach,” which is a valuation technique that provides an estimate of the fair value of an intangible asset based on market participant expectations of the cash flows that an intangible asset would generate over its remaining useful life. The estimated fair value of the trade name was determined using the “relief from royalty method,” which is a valuation technique that provides an estimate of the fair value of an intangible asset equal to the present value of the after-tax royalty savings attributable to owning the intangible asset. The assumptions, including the expected projected cash flows, utilized in the purchase price allocation and in determining the purchase price were based on management's best estimates as of the closing date of the Rondo Acquisitions on January 31, 2020. Some of the more significant assumptions inherent in the development of those asset valuations included the estimated net cash flows for each year for each asset (including net revenues, cost of sales, selling and marketing costs and working capital / contributory asset charges), the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, competitive trends impacting the asset and each cash flow stream, as well as other factors. The underlying assumptions used to prepare the discounted cash flow analysis may change; accordingly, for these and other reasons, actual results may vary significantly from estimated results. The Sellers Notes and redeemable non-controlling interests were estimated using the Monte-Carlo simulation approach under the option pricing framework. The non-controlling interests are redeemable at the option of either the non-controlling interest holder or Amneal. The fair value of the redeemable non-controlling interests considers these redemption rights. Of the $104 million of goodwill acquired in connection with the Rondo Acquisitions, approximately $70 million was allocated to the Company’s AvKARE segment and approximately $34 million was allocated to the Generics segment (refer to Note 26. Segment Information). Goodwill was allocated to the Generics segment as net revenue of products manufactured by Amneal and distributed by the Rondo Acquisitions is reflected in Generics’ segment results. Goodwill is calculated as the excess of the fair value of the consideration transferred and the fair value of the redeemable non-controlling interests over the fair value of the net assets recognized. Factors that contributed to the recognition of goodwill include Amneal’s intent to diversify its business and open growth opportunities in the large, complex and growing federal healthcare market. From the acquisition date of January 31, 2020 to December 31, 2020, the Rondo Acquisitions contributed total net revenue of approximately $311 million and operating income of $4 million, which included approximately $32 million of amortization expense from intangible assets acquired in the Rondo Acquisitions, to the Company’s consolidated statements of operations. Unaudited Pro Forma Information The unaudited pro forma combined results of operations for the years ended December 31, 2021 and 2020 (assuming the closing of the Rondo Acquisitions occurred on January 1, 2019 and the closing of the KSP Acquisition occurred on January 1, 2020) are as follows (in thousands):
The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the actual results of operations had the closing of the Rondo Acquisitions taken place on January 1, 2019 and the closing of the KSP Acquisition taken place on January 1, 2020. Furthermore, the pro forma results do not purport to project the future results of operations of the Company. Adjustments to arrive at the unaudited pro forma information primarily related to increases in selling, general and administrative expenses for amortization of acquired intangible assets, net of the applicable tax impact. Divestitures UK Divestiture On March 30, 2019, the Company sold 100% of the stock of its Creo Pharma Holding Limited subsidiary, which comprised substantially all of the Company's operations in the United Kingdom, to AI Sirona (Luxembourg) Acquisition S.a.r.l (“AI Sirona”) for net cash consideration of approximately $32 million which was received in April 2019. The carrying value of the net assets sold was $22 million, including intangible assets of $7 million and goodwill of $5 million. As a result of the sale, the Company recognized a pre-tax gain of $9 million, inclusive of transaction costs and the recognition of accumulated foreign currency translation adjustment losses of $3 million, within gain on sale of international businesses for the year ended December 31, 2019. For the year ended December 31, 2020, the Company made a $0.5 million payment to AI Sirona, and recognized a $0.1 million gain within sale of international businesses for final settlement of the divestiture. As part of the disposition, the Company entered into a supply and license agreement with AI Sirona to supply certain products for a period of up to two years. Germany Divestiture On May 3, 2019, the Company sold 100% of the stock of its Amneal Deutschland GmbH subsidiary, which comprised substantially all of the Company's operations in Germany, to EVER Pharma Holding Ges.m.b.H. (“EVER”) for net cash consideration of approximately $3 million which was received in May 2019. The carrying value of the net assets sold was $7 million, including goodwill of $0.5 million. As a result of the sale, the Company recognized a pre-tax loss of $2 million, inclusive of transaction costs and the recognition of accumulated foreign currency translation adjustment losses, within gain on sale of international businesses for the year ended December 31, 2019. As part of the disposition, the Company also entered into a license and supply agreement with EVER to supply certain products for an 18-month period. Acquisition, Transaction-Related and Integration Expenses For the year ended December 31, 2021, acquisition, transaction-related and integration expenses of $8 million primarily consisted of professional services fees (e.g. legal, investment banking and consulting) associated with the Puniska Acquisition, the KSP Acquisition, and the Rondo Acquisitions. For the year ended December 31, 2020, acquisition, transaction-related and integration expenses of $9 million primarily consisted of professional services fees associated with the then pending KSP Acquisition, the Rondo Acquisitions, and systems integrations associated with the acquisition of Impax. For the year ended December 31, 2019, acquisition, transaction-related and integration expenses of $16 million primarily consisted of integration costs associated with the acquisition of Impax.
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Performance Obligations The Company’s performance obligation is the supply of finished pharmaceutical products to its customers. The Company’s customers consist primarily of major wholesalers, retail pharmacies, managed care organizations, purchasing co-ops, hospitals, government agencies, institutions and pharmaceutical companies. The Company’s customer contracts generally consist of both a master agreement, which is signed by the Company and its customer, and a customer submitted purchase order, which is governed by the terms and conditions of the master agreement. Customers purchase product by direct channel sales from the Company or by indirect channel sales through various distribution channels. Revenue is recognized when the Company transfers control of its products to the customer, which typically occurs at a point-in-time, upon shipment or delivery. Substantially all of the Company’s net revenues relate to products which are transferred to the customer at a point-in-time. The Company offers standard payment terms to its customers and has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing, since the period between when the Company transfers the product to the customer and when the customer pays for that product is one year or less. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues. The consideration amounts due from customers as a result of product sales are subject to variable consideration, as described further below. The Company offers standard product warranties which provide assurance that the product will function as expected and in accordance with specifications. Customers cannot purchase warranties separately and these warranties do not give rise to a separate performance obligation. The Company permits the return of product under certain circumstances, mainly upon product expiration, instances of shipping errors or where product is damaged in transit. The Company accrues for the customer’s right to return as part of its variable consideration. See below for further details. Variable Consideration The Company includes an estimate of variable consideration in its transaction price at the time of sale, when control of the product transfers to the customer. Variable consideration includes but is not limited to: chargebacks, distribution fees, rebates, group purchasing organization ("GPO") fees, prompt payment (cash) discounts, consideration payable to the customer, billbacks, Medicaid and other government pricing programs, price protection and shelf stock adjustments, sales returns, and profit shares. The Company assesses whether or not an estimate of its variable consideration is constrained and has determined that the constraint does not apply, since it is probable that a significant reversal in the amount of cumulative revenue will not occur in the future when the uncertainty associated with the variable consideration is subsequently resolved. The Company’s estimates for variable consideration are adjusted as required at each reporting period for specific known developments that may result in a change in the amount of total consideration it expects to receive. Chargebacks In the case an indirect customer purchases product from their preferred wholesaler instead of directly from the Company, and the contract price charged to the indirect customer is lower than the wholesaler pricing, the Company pays the direct customer (wholesaler) a chargeback for the price differential. The Company estimates its chargeback accrual based on its estimates of the level of inventory of its products in the distribution channel that remain subject to chargebacks and historical chargeback rates. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers. Rebates The Company pays fixed or volume-based rebates to its customers based on a fixed amount, fixed percentage of product sales or based on the achievement of a specified level of purchases. The Company’s rebate accruals are based on actual net sales, contractual rebate rates negotiated with customers, and expected purchase volumes / corresponding tiers based on actual sales to date and forecasted amounts. Group Purchasing Organization Fees The Company pays fees to GPOs for administrative services that the GPOs perform in connection with the purchases of product by the GPO participants who are the Company’s customers. The Company’s GPO fee accruals are based on actual net sales, contractual fee rates negotiated with GPOs and the mix of the products in the distribution channel that remain subject to GPO fees. Prompt Payment (Cash) Discounts The Company provides customers with prompt payment discounts which may result in adjustments to the price that is invoiced for the product transferred, in the case that payments are made within a defined period. The Company’s prompt payment discount accruals are based on actual net sales and contractual discount rates. Consideration Payable to the Customer The Company pays administrative and service fees to its customers based on a fixed percentage of the product price. These fees are not in exchange for a distinct good or service and therefore are recognized as a reduction of the transaction price. The Company accrues for these fees based on actual net sales, contractual fee rates negotiated with the customer and the mix of the products in the distribution channel that remain subject to fees. Billbacks In the case an indirect customer purchases product from their preferred wholesaler instead of directly from the Company, and the contract price charged to the indirect customer is higher than contractual pricing, the Company pays the indirect customer a billback for the price differential. The Company estimates its billback accrual based on its estimates of the level of inventory of its products in the distribution channel that remain subject to billbacks and historical billback rates. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers. Medicaid and Other Government Pricing Programs The Company complies with required rebates mandated by law under Medicaid and other government pricing programs. The Company estimates its government pricing accruals based on monthly sales, historical experience of claims submitted by the various states and jurisdictions, historical rates and estimated lag time of the rebate invoices. Price Protection and Shelf Stock Adjustments The Company provides customers with price protection and shelf stock adjustments which may result in an adjustment to the price charged for the product transferred, based on differences between old and new prices which may be applied to the customer’s on-hand inventory at the time of the price change. The Company accrues for these adjustments when its expected value of an adjustment is greater than zero, based on contractual pricing, actual net sales, accrual rates based on historical average rates, and estimates of the level of inventory of its products in the distribution channel that remain subject to these adjustments. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers. Sales Returns The Company permits the return of product under certain circumstances, mainly upon product expiration, instances of shipping errors or where product is damaged in transit, and occurrences of product recalls. The Company’s product returns accrual is primarily based on estimates of future product returns based generally on actual net sales, estimates of the level of inventory of its products in the distribution channel that remain subject to returns, estimated lag time of returns and historical return rates. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers. Profit Shares For certain product sale arrangements, the Company earns a profit share upon the customer’s sell-through of the product purchased from the Company. The Company estimates its profit shares based on actual net sales, estimates of the level of inventory of its products in the distribution channel that remain subject to profit shares, and historical rates of profit shares earned. The estimate of the level of products in the distribution channel is based primarily on data provided by key customers. Concentration of Revenue The following table summarizes the percentages of net revenues from each of the Company's customers which individually accounted for 10% or more of its net revenues:
Disaggregated Revenue The Company's significant therapeutic classes for each of its reportable segments, as determined based on net revenue for each of the years ended December 31, 2021, 2020 and 2019 are set forth below (in thousands):
(1)Antiviral net revenue for the year ended December 31, 2021 decreased from the prior year, primarily due to a decline in Oseltamivir (generic Tamiflu®) sales from lower demand and increased returns activity above historical levels as a result of decreased influenza activity during the COVID-19 pandemic. (2)During the three months ended September 30, 2019, net revenue and operating results for Oxymorphone were reclassified from Generics to Specialty, where it is sold as a non-promoted product. Prior period results have not been restated to reflect the reclassification. (3)The AvKARE segment consists of the businesses acquired in the Rondo Acquisitions on January 31, 2020. Net revenue for the year ended December 31, 2020 represents eleven months of activity. A rollforward of the major categories of sales-related deductions for the years ended December 31, 2021, 2020 and 2019 is as follows (in thousands):
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Alliance and Collaboration |
12 Months Ended |
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Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Alliance and Collaboration | Alliance and Collaboration The Company has entered into several alliance, collaboration, license, distribution and similar agreements with respect to certain of its products and services with third-party pharmaceutical companies. The consolidated statements of operations include revenue recognized under agreements the Company has entered into to develop marketing and/or distribution relationships with its partners to fully leverage the technology platform and revenue recognized under development agreements which generally obligate the Company to provide research and development services over multiple periods. The Company's significant arrangements are discussed below. Levothyroxine License and Supply Agreement; Transition Agreement On August 16, 2018, the Company entered into a license and supply agreement with Jerome Stevens Pharmaceuticals, Inc. (“JSP”) for levothyroxine sodium tablets (“Levothyroxine”). This agreement designated the Company as JSP's exclusive commercial partner for Levothyroxine in the U.S. market for a 10-year term commencing on March 22, 2019. Under this license and supply agreement with JSP, the Company accrued the up-front license payment of $50 million on March 22, 2019, which was paid in April 2019. The agreement also provides for the Company to pay a profit share to JSP based on net profits of the Company's sales of Levothyroxine, after considering product costs. On November 9, 2018, the Company entered into a transition agreement ("Transition Agreement") with Lannett Company (“Lannett”) and JSP. Under the terms of the agreement, the Company assumed the distribution and marketing of Levothyroxine from Lannett beginning December 1, 2018 through March 22, 2019 (the “Transition Period”), ahead of the commencement date of the license and supply agreement with JSP described above. In accordance with the terms of the Transition Agreement, the Company made $47 million of non-refundable payments to Lannett in November 2018. For the year ended December 31, 2019, $37 million, was expensed to costs of goods sold, as the company sold Levothyroxine. Additionally, during the year ended December 31, 2019, the Company recorded $1 million in cost of sales related to reimbursement due to Lannett for certain of its unsold inventory at the end of the Transition Period, which was fully settled in March 2020. As a result of significant price erosion associated with the Levothyroxine products licensed from JSP, the Company recorded a $17.7 million cost of goods sold impairment charge for the year ended December 31, 2021 to recognize an impairment on the entire unamortized balance of the up-front license payment (refer to Note 15. Goodwill and Other Intangible Assets for additional information). Biosimilar Licensing and Supply Agreement On May 7, 2018, the Company entered into a licensing and supply agreement with Mabxience S.L., for its biosimilar candidate for Avastin® (bevacizumab). The supply agreement was subsequently amended on March 2, 2021 and the licensing agreement was amended on March 4, 2021. The Company will be the exclusive partner in the U.S. market. The Company will pay up-front, development and regulatory milestone payments as well as commercial milestone payments on reaching pre-agreed sales targets in the market to Mabxience, up to $78 million. For the years ended December 31, 2021, 2020, and 2019, the Company recognized $12 million, $5 million, and $5 million, respectively, of milestones in research and development expenses, respectively, related to the agreement. Distribution, License, Development and Supply Agreement with AstraZeneca UK Limited In January 2012, Impax entered into an agreement with AstraZeneca UK Limited (“AstraZeneca”) to distribute branded products under the terms of a distribution, license, development and supply agreement (the “AZ Agreement”). The parties subsequently entered into a First Amendment to the AZ Agreement dated May 31, 2016 (as amended, the “AZ Amendment”). Under the terms of the AZ Agreement, AstraZeneca granted to Impax an exclusive license to commercialize the tablet, orally disintegrating tablet and nasal spray formulations of Zomig® (zolmitriptan) products for the treatment of migraine headaches in the United States and in certain U.S. territories, except during an initial transition period when AstraZeneca fulfilled all orders of Zomig® products on Impax’s behalf and AstraZeneca paid to Impax the gross profit on such Zomig® products. Pursuant to the AZ Amendment, under certain conditions, and depending on the nature and terms of the study agreed to with the FDA, Impax agreed to conduct, at its own expense, the juvenile toxicity study and pediatric study required by the FDA under the Pediatric Research Equity Act (“PREA”) for approval of the nasal formulation of Zomig ® for the acute treatment of migraine in pediatric patients ages six through eleven years old, as further described in the study protocol mutually agreed to by the parties (the “PREA Study”). In consideration for Impax conducting the PREA Study at its own expense, the AZ Amendment provided for the total royalty payments payable by Impax to AstraZeneca on net sales of Zomig ® products under the AZ Agreement to be reduced by an aggregate amount of $30 million to be received in quarterly amounts specified in the Amendment beginning from the quarter ended June 30, 2016 and through the quarter ended December 31, 2020. In the event the royalty reduction amounts exceeded the royalty payments payable by Impax to AstraZeneca pursuant to the AZ Agreement in any given quarter, AstraZeneca was required to pay Impax an amount equal to the difference between the royalty reduction amount and the royalty payment payable by Impax to AstraZeneca. Impax’s commitment to perform the PREA Study could have been terminated, without penalty, under certain circumstances as set forth in the AZ Amendment. The Company recognized the amounts received from AstraZeneca for the PREA Study as a reduction to research and development expense. The PREA study was completed during March 2021. In May 2013, Impax’s exclusivity period for branded Zomig® tablets and orally disintegrating tablets expired and Impax launched authorized generic versions of those products in the United States. The pediatric exclusivity of the AstraZeneca patent licensed to Impax for Zomig Spray expired in May 2021 and the Company lost market exclusivity in the fourth quarter of 2021. As discussed above, pursuant to the AZ Amendment, the total royalty payments payable by Impax to AstraZeneca on net sales of Zomig ® products under the AZ Agreement was reduced by certain specified amounts beginning from the quarter ended June 30, 2016 through the quarter ended December 31, 2020, with such reduced royalty amounts totaling an aggregate amount of $30 million. The Company recorded cost of goods sold for royalties under this agreement of $13 million, $17 million, and $19 million for the years ended December 31, 2021, 2020 and 2019, respectively. Agreements with Kashiv Biosciences, LLC For detail on the Company’s related party agreements with Kashiv Biosciences, LLC, refer to Note 24. Related Party Transactions.
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Restructuring and Other Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Other Charges | Restructuring and Other ChargesIn 2018, in connection with the acquisition of Impax, the Company committed to a restructuring plan to achieve cost savings. The Company expected to integrate its operations and reduce its combined cost structure through workforce reductions that eliminated duplicative positions and consolidated certain administrative, manufacturing and research and development facilities. In connection with this plan, the Company announced on May 10, 2018 that it intended to close its Hayward, California-based operations. On July 10, 2019, the Company announced a plan to restructure its operations that is intended to reduce costs and optimize its organizational and manufacturing infrastructure. Pursuant to the restructuring plan as revised, the Company expects to reduce its headcount over the course of this multi-year program by approximately 300 to 350 employees through September 30, 2022, primarily by ceasing to manufacture at its facility located in Hauppauge, NY. Through December 31, 2021, the Company reduced headcount by 280 employees under this plan. Other cash expenditures associated with this restructuring plan, including decommissioning and dismantling the sites and other third party costs cannot be estimated at this time. The following table sets forth the components of the Company's employee and asset-related restructuring charges (credit) and other employee severance charges for the years ended December 31, 2021, 2020 and 2019 (in thousands):
(1)Employee restructuring separation charges (credit) were associated with benefits provided pursuant to the Company's severance programs for employees impacted by the plans at the Company's Hauppauge, NY, Hayward, CA and other facilities. (2)For the year ended December 31, 2020, the asset-related credit was primarily associated with the contractual cancellation of an asset retirement obligation related to a lease in Hayward, CA that was terminated during August 2020. For the year ended December 31, 2019, asset-related charges were primarily associated with the impairment of property, plant and equipment and right of use asset in connection with the planned closing of the Company’s Hauppauge, NY facility. (3)For the years ended December 31, 2021, 2020 and 2019, other employee severance charges were primarily associated with the cost of benefits for former executives and employees. The charges (credit) related to restructuring impacted segment earnings as follows (in thousands):
The following table shows the change in the employee separation-related liability, included in accounts payable and accrued expenses, associated with the plan to cease manufacturing at its facility located in Hauppauge, NY (in thousands):
As of December 31, 2021 and 2020, there were no remaining employee separation liabilities associated with the restructuring plan to close the Company’s Hayward, California-based operations.
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Government Grants |
12 Months Ended |
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Dec. 31, 2021 | |
Receivables [Abstract] | |
Government Grants | Government Grants In November 2021, Amneal Pharmaceuticals Private Limited, a subsidiary of the Company in India, was selected as one of 55 companies to participate in the Production Linked Incentive Scheme for the Pharmaceutical sector (“PLI Scheme”). The Government of India established the PLI Scheme to make India’s domestic manufacturing more globally competitive and to create global champions within the pharmaceutical sector by encouraging investment and product diversification with a focus on manufacturing complex and high value goods. Under the PLI Scheme, the Company is eligible to receive up to 10 billion Indian rupees, or approximately $134 million (based on conversion rates as of December 31, 2021), over a maximum six-year period, starting in 2022. To be eligible to receive the cash incentives, Amneal must achieve (i) minimum cumulative expenditures towards developmental and/or capital investments; and (ii) a minimum percentage growth in sales of eligible products. The Company will recognize the related grant incentives in the consolidated statements of operations on a systematic basis over the term of the grant starting in 2022.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Amneal is a limited liability company that is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Amneal is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Amneal is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis subject to applicable tax regulations. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income or loss of Amneal, as well as any stand-alone income or loss generated by the Company. Amneal provides for income taxes in the various foreign jurisdictions in which it operates. The Company recorded a deferred tax asset for its outside basis difference in its investment in Amneal on May 4, 2018. The Company recorded a deferred tax asset related to the net operating loss of Impax from January 1, 2018 through May 4, 2018 as well as certain federal and state credits and interest carryforwards of Impax that were attributable to the Company. The Company records its valuation allowances against its deferred tax assets (“DTAs”) when it is more likely than not that all or a portion of a DTA will not be realized. The Company routinely evaluates the realizability of its DTAs by assessing the likelihood that its DTAs will be recovered based on all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, estimates of future taxable income, tax planning strategies and results of operations. Estimating future taxable income is inherently uncertain and requires judgment. In projecting future taxable income, the Company considers its historical results and incorporates certain assumptions, including projected new product launches, revenue growth, and operating margins, among others. A valuation allowance, if needed, reduces DTAs to the amount expected to be realized. When determining the amount of net DTAs that are more likely than not to be realized, the Company assesses all available positive and negative evidence. This evidence includes, but is not limited to, prior earnings history, projected future earnings, carryback and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a DTA. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income to outweigh objective negative evidence of recent financial reporting losses. The Company established a valuation allowance based upon all available objective and verifiable evidence both positive and negative, including historical levels of pre-tax income (loss) both on a consolidated basis and tax reporting entity basis, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies. Since first establishing a valuation allowance, the Company has continued to estimate that it has generated a cumulative consolidated three year pre-tax loss through December 31, 2021. As a result of the analysis through December 31, 2021, the Company determined that it is more likely than not that it will not realize the benefits of its gross DTAs and therefore maintained its valuation allowance. As of December 31, 2021, this valuation allowance was $417 million, and it reduced the carrying value of these gross DTAs, net of the impact of the reversal of taxable temporary differences, to zero. In connection with the acquisition of Impax, the Company entered into a tax receivable agreement (“TRA”) for which it is generally required to pay the other holders of Amneal Common Units 85% of the applicable tax savings, if any, in U.S. federal and state income tax that it is deemed to realize as a result of certain tax attributes of their Amneal Common Units sold to the Company (or exchanged in a taxable sale) and that are created as a result of (i) the sales of their Amneal Common Units for shares of Class A Common Stock and (ii) tax benefits attributable to payments made under the TRA. In conjunction with the valuation allowance recorded on the DTAs, the Company reversed the accrued TRA liability of $193 million, which resulted in a gain recorded in other (expense) income, net for the year ended December 31, 2019. As of December 31, 2021, no additional TRA liability has been accrued. The timing and amount of any payments under the TRA may vary, depending upon a number of factors including the timing and number of Amneal common units sold or exchanged for the Company's Class A Common Stock, the price of the Company's Class A Common Stock on the date of sale or exchange, the timing and amount of the Company's taxable income, and the tax rate in effect at the time of realization of the Company's taxable income (the TRA liability is determined based on a percentage of the corporate tax savings from the use of the TRA's attributes). Further sales or exchanges occurring subsequent to December 31, 2021 could result in future Amneal tax deductions and obligations to pay 85% of such benefits to the holders of Amneal Common Units. These obligations could be incremental to and substantially larger than the approximate $206 million contingent liability as of December 31, 2021 described below. Under certain conditions, such as a change of control or other early termination event, the Company could be obligated to make TRA payments in advance of tax benefits being realized. As noted above, the Company has determined it is more-likely-than-not we will be unable to utilize all of its DTAs subject to TRA; therefore, as of December 31, 2021, the Company has not recognized the contingent liability under the TRA related to the tax savings it may realize from common units sold or exchanged. If utilization of these DTAs becomes more-likely- than-not in the future, at such time, these TRA liabilities (which amounted to approximately $206 million at December 31, 2021, as a result of basis adjustments under Internal Revenue Code Section 754) will be recorded through charges in the Company’s consolidated statements of operations. However, if the tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRA. Should the Company determine that a DTA with a valuation allowance is realizable in a subsequent period, the related valuation allowance will be released and if a resulting TRA payment is determined to be probable, a corresponding TRA liability will be recorded. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The CARES Act is an emergency economic stimulus package in response to the COVID-19 pandemic which, among other things, includes provisions relating to income and non-income-based tax laws. As a result of the CARES Act, the Company carried back approximately $345 million in NOLs generated in 2018 to prior taxable income years. In carrying back the 2018 loss to an earlier year, the Company is able to benefit the losses at a 35% tax rate rather than the current U.S. corporate tax rate of 21%. Accordingly, the Company recorded a discrete income tax benefit of $110 million for the year ended December 31, 2020. During July 2020, the Company received a cash refund for $106 million of the $110 million NOL carryback, plus interest of approximately $4 million, with an additional $2 million received in February of 2021. The remainder of the NOL carryback is expected to be received before December 31, 2022. For the years ended December 31, 2021, 2020 and 2019 the Company's provision for (benefit from) income taxes and effective tax rates were $11 million and 35.7%, $(104) million and 291.7%, and $383 million and 174%, respectively. The change in income taxes for the year ended December 31, 2021 compared to the prior year was primarily associated with the $110 million benefit from the carryback of U.S. Federal DTAs under the CARES Act for the year ended December 31, 2020 described above. The change in income taxes for the year ended December 31, 2020 compared to the prior year was primarily due to the provision to record the valuation allowance against the Company’s DTAs. The Company and its subsidiaries file income tax returns in the U.S. federal, and various state, local and foreign jurisdictions. The Company is currently under income tax audit by IRS for the 2018 tax return, the year when the Company filed the CARES Act carryback. Impax's federal tax filings for the 2015, 2016 and 2017 tax years are currently under audit, and the IRS statute of limitations has been extended for these Impax federal tax returns until 2023. If there were adjustments to the attributes of Impax for any of the 2015, 2016 or 2017 tax years, they could impact the carryforward losses at the Company, which is the successor in interest to Impax. The Amneal partnership was audited for the tax year ended December 31, 2015 without any adjustments to taxable income. Income tax returns are generally subject to examination for a period of three years in the U.S. However, Impax’s 2013 and 2014 tax years remain open to adjustment to the extent of the 2018 NOL carryback as described above. Neither the Company nor any of its other affiliates is currently under audit for state income tax. The components of the Company's income (loss) before income taxes were as follows (in thousands):
The provision for (benefit from) income taxes was comprised of the following (in thousands):
The effective tax rate was as follows:
The change in effective income tax rate for the year ended December 31, 2021 compared to the year ended December 31, 2020 was primarily due to the benefit to record the NOL carryback resulting from the CARES Act. The change in effective income tax rate for the year ended December 31, 2020 compared to the year ended December 31, 2019 was primarily due to the benefit to record the NOL carryback resulting from the CARES Act in 2020, and the provision to record the valuation allowance against the Company’s DTAs in 2019. The following table summarizes the changes in the Company's valuation allowance on deferred tax assets (in thousands):
At December 31, 2021, the Company had approximately $107 million of foreign net operating loss carry forwards. These net operating loss carry forwards will partially expire, if unused, between 2029 and 2030. At December 31, 2021, the Company had approximately $227 million of federal and $172 million of state net operating loss carry forwards. The federal net operating losses are generally allowed to be carried forward indefinitely, and the majority of the state net operating losses will expire, if unused, between 2035 and 2041. At December 31, 2021, the Company had approximately $12 million of federal R&D credit carry forwards and $10 million of state R&D credit carry forwards. The majority of the federal R&D credit carry forwards will expire if unused, between 2034 and 2041 and the majority of state credits can be carried forward indefinitely. The tax effects of temporary differences that give rise to deferred taxes were as follows (in thousands):
The Company updated its analysis with respect to stock-based compensation. Accordingly, the Company recorded a deferred tax asset for its allocable share of stock-based compensation cost that would ordinarily result in future tax deductions when the compensation vests. As stock options are exercised, the deferred tax asset recorded is reversed, and generally a current tax benefit is taken unless it would create additional net operating losses, which would then be evaluated for the potential need for a valuation allowance. The Company's Indian subsidiaries are primarily export-oriented and in some cases are eligible for certain limited income tax holiday benefits granted by the government of India for export activities conducted within Special Economic Zones, or SEZs, for periods of up to 15 years. Amneal’s SEZ income tax holiday benefits are currently scheduled to expire in whole or in part during the years 2028 to 2030. Indian profits ineligible for SEZ benefits are subject to corporate income tax at the rate of 34.9%. In addition, all Indian profits, including those generated within SEZs, are subject to the Minimum Alternate Tax (MAT), at the rate of 21.5%. The Company established a full valuation allowance against its deferred tax assets in India due to its reliance on intercompany sales for U.S. distribution. For the years ended December 31, 2021, 2020 and 2019, the effect of income tax holidays granted by the Indian government reduced the overall provision for income taxes/ increased the benefit from income taxes and increased net income/ decreased net loss by approximately $3 million, $3 million, and $4 million, respectively. The Company accounts for income tax contingencies using the benefit recognition model. The Company will recognize a benefit if a tax position is more likely than not to be sustained upon audit, based solely on the technical merits. The benefit is measured by determining the amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. The amount of unrecognized tax benefits at December 31, 2021, 2020, and 2019, was $5 million, $5 million and $6 million, respectively, of which $5 million, $5 million and $6 million would impact the Company’s effective tax rate if recognized. The Company currently does not believe that the total amount of unrecognized tax benefits will increase or decrease significantly over the next 12 months. Interest expense related to income taxes is included in provision for (benefit from) income taxes. Net interest expense (benefit) related to unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019 was $0.1 million $(0.3) million, and $0.4 million, respectively. Accrued interest expense as of December 31, 2021, 2020, and 2019 was $0.8 million, $0.8 million, and $1.0 million, respectively. Income tax penalties are included in provision for (benefit from) income taxes. Accrued tax penalties as of December 31, 2021, 2020 and 2019 were immaterial. A rollforward of unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019 is as follows (in thousands):
In India, the income tax return for fiscal year ending March 31, 2018 is currently being reviewed by tax authorities as part of the normal procedures, and the Company is not expecting any material adjustments. There are no other income tax returns in the process of examination, administrative appeal, or litigation. Income tax returns are generally subject to examination for a period of 3 years, 5 years, 2 years and 4 years after the tax year in India, Switzerland, United Kingdom and Ireland, respectively. Applicable foreign taxes (including withholding taxes) have not been provided on the approximately $93 million of undistributed earnings of foreign subsidiaries as at December 31, 2021. These earnings have been and currently are considered to be indefinitely reinvested. Quantification of additional taxes that may be payable on distribution is not practicable. The Company continuously monitors government proposals to make changes to tax laws, including comprehensive tax reform in the United States and proposed legislation in certain foreign jurisdictions resulting from the adoption of the Organization for Economic Cooperation and Development policies. If legislative changes are enacted in other countries, any of these proposals may include increasing or decreasing existing statutory tax rates. A change in statutory tax rates in any country would result in the revaluation of Amneal’s deferred tax assets and liabilities related to that particular jurisdiction in the period in which the new tax law is enacted.
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Earnings (Loss) per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) per Share | Earnings (Loss) per Share Basic earnings (loss) per share of Class A Common Stock and Class B-1 Common Stock is computed by dividing net earnings (loss) attributable to Amneal Pharmaceuticals, Inc. by the weighted-average number of shares of Class A Common Stock and Class B-1 Common Stock outstanding during the period. Diluted earnings per share of Class A Common Stock and Class B-1 Common Stock is computed by dividing net earnings (loss) attributable to Amneal Pharmaceuticals, Inc. by the weighted-average number of shares of Class A Common Stock and Class B-1 Common Stock outstanding during the period, adjusted to give effect to potentially dilutive securities. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A Common Stock and Class B-1 Common Stock (in thousands, except per share amounts):
(1)During the year ended December 31, 2019, pursuant to the Company's certificate of incorporation, the Company converted all 12.3 million of its issued and outstanding shares of Class B-1 Common Stock to Class A Common Stock and such shares of Class B-1 Common Stock have been retired and may not be reissued by the Company. The weighted-average shares for the years ended December 31, 2021 and December 31, 2020 do not include Class B-1 Common Stock. The allocation of net income (loss) to the holders of shares of Class A Common Stock and Class B-1 Common Stock began following the closing of the Combination on May 4, 2018. Shares of the Company's Class B Common Stock do not share in the earnings or losses of the Company and, therefore, are not participating securities. As such, separate presentation of basic and diluted earnings (loss) per share of Class B Common Stock under the two-class method has not been presented. The following table presents potentially dilutive securities excluded from the computations of diluted earnings (loss) per share of Class A Common Stock and Class B-1 Common Stock (in thousands).
(1)Excluded from the computation of diluted earnings per share of Class A Common Stock for the years ended December 31, 2021 and December 31, 2020 because the exercise price of the stock options exceeded the average market price of the Class A Common Stock during the period (out-of-the-money). (2)Excluded from the computation of diluted earnings per share of Class A Common Stock for the years ended December 31, 2021 and December 31, 2020 because the performance vesting conditions were not met. (3)Shares of Class B Common Stock are considered potentially dilutive shares of Class A and Class B-1 Common Stock. Shares of Class B Common Stock have been excluded from the computations of diluted earnings (loss) per share of Class A and Class B-1 Common Stock for each of the years ended December 31, 2021, 2020 and 2019 because the effect of their inclusion would have been anti-dilutive under the if-converted method. As noted above, the weighted-average shares for the year ended December 31, 2021 do not include Class B-1 Common Stock. (4)Excluded from the computation of diluted loss per share of Class A Common Stock and Class B-1 Common Stock for the years ended December 31, 2019 because the effect of their inclusion would have been anti-dilutive since there was a net loss attributable to the Company for the year ended December 31, 2019. As noted above, the weighted-average shares for the years ended December 31, 2021 and 2020 do not include Class B-1 Common Stock.
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Trade Accounts Receivable, Net |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trade Accounts Receivable, Net | Trade Accounts Receivable, Net Trade accounts receivable, net is comprised of the following (in thousands):
Receivables from customers representing 10% or more of the Company’s net trade accounts receivable reflected three customers at December 31, 2021, equal to 37%, 25%, and 24%, of receivables, respectively. Receivables from customers representing 10% or more of the Company’s net trade accounts receivable reflected three customers at December 31, 2020, equal to 39%, 26%, and 20%, of receivables, respectively.
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Inventories |
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Inventories | Inventories Inventories are comprised of the following (in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The majority of the Company's operating and financing lease portfolio consists of corporate offices, manufacturing sites, warehouse space, research and development facilities, and land. The Company's leases have remaining lease terms of 1 year to 23 years (excluding international land easements with remaining terms of 29 - 98 years). Rent expense for the years ended December 31, 2021, 2020 and 2019 was $20 million, $26 million, and $26 million, respectively. During the year ended December 31, 2020 and 2019, the Company recorded $1 million and $2 million, respectively, in impairment charges associated operating lease right-of-use assets. For the year ended December 31, 2020, the impairment charge was associated with the closure of the Company’s Blue Bell, PA facility. For the year ended December 31, 2019, the impairment charges were primarily associated with the Company’s Hauppauge, NY facility because the Company’s forecasts did not support recoverability of the assets. There were no impairments of operating lease right-of-use assets for the year ended December 31, 2021. For further details, see Note 6. Restructuring and Other Charges. The components of total lease costs were as follows (in thousands):
(1)Includes variable and short-term lease costs. Supplemental balance sheet information related to the Company's leases was as follows (in thousands):
(1) As noted in Note 2. Summary of Significant Accounting Policies, prior period balances related to (i) financing lease right-of-use assets, (ii) current portion of financing lease liabilities, and (iii) long-term financing lease liabilities as of December 31, 2020 have been reclassified to their respective balance sheet captions to conform to the current period presentation in the consolidated balance sheet and the supplemental balance sheet information above. (2) Refer to Note 24. Related Party Transactions, for additional details. Supplemental cash flow information related to leases was as follows (in thousands):
The table below reflects the weighted average remaining lease term and weighted average discount rate for the Company's operating and finance leases:
Maturities of lease liabilities as of December 31, 2021 were as follow (in thousands):
Maturities of lease liabilities as of December 31, 2020 were as follows (in thousands):
For additional information regarding lease transactions with related parties, refer to Note 24. Related Party Transactions.
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Leases | Leases The majority of the Company's operating and financing lease portfolio consists of corporate offices, manufacturing sites, warehouse space, research and development facilities, and land. The Company's leases have remaining lease terms of 1 year to 23 years (excluding international land easements with remaining terms of 29 - 98 years). Rent expense for the years ended December 31, 2021, 2020 and 2019 was $20 million, $26 million, and $26 million, respectively. During the year ended December 31, 2020 and 2019, the Company recorded $1 million and $2 million, respectively, in impairment charges associated operating lease right-of-use assets. For the year ended December 31, 2020, the impairment charge was associated with the closure of the Company’s Blue Bell, PA facility. For the year ended December 31, 2019, the impairment charges were primarily associated with the Company’s Hauppauge, NY facility because the Company’s forecasts did not support recoverability of the assets. There were no impairments of operating lease right-of-use assets for the year ended December 31, 2021. For further details, see Note 6. Restructuring and Other Charges. The components of total lease costs were as follows (in thousands):
(1)Includes variable and short-term lease costs. Supplemental balance sheet information related to the Company's leases was as follows (in thousands):
(1) As noted in Note 2. Summary of Significant Accounting Policies, prior period balances related to (i) financing lease right-of-use assets, (ii) current portion of financing lease liabilities, and (iii) long-term financing lease liabilities as of December 31, 2020 have been reclassified to their respective balance sheet captions to conform to the current period presentation in the consolidated balance sheet and the supplemental balance sheet information above. (2) Refer to Note 24. Related Party Transactions, for additional details. Supplemental cash flow information related to leases was as follows (in thousands):
The table below reflects the weighted average remaining lease term and weighted average discount rate for the Company's operating and finance leases:
Maturities of lease liabilities as of December 31, 2021 were as follow (in thousands):
Maturities of lease liabilities as of December 31, 2020 were as follows (in thousands):
For additional information regarding lease transactions with related parties, refer to Note 24. Related Party Transactions.
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Prepaid Expenses and Other Current Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are comprised of the following (in thousands):
(1)As discussed in Note 21. Commitments and Contingencies, the Company recorded receivables from insurers of $33 million and $6 million as of December 31, 2021 and 2020, respectively, associated with an insured securities class action lawsuit. (2)When a sale occurs on a contract item, the difference between the cost paid to the manufacturer by the Company and the contract cost that the end customer has with the manufacturer is rebated back to the Company by the manufacturer. The Company establishes a chargeback (rebate) receivable and a reduction to cost of goods sold in the same period as the related sale.
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Property, Plant, and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant, and Equipment, Net | Property, Plant, and Equipment, Net Property, plant, and equipment, net was comprised of the following (in thousands):
Depreciation recognized by the Company was as follows (in thousands):
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Other Intangible Assets The changes in goodwill for the years ended December 31, 2021 and 2020 were as follows (in thousands):
As of December 31, 2021, $363 million, $160 million, and $70 million of goodwill was allocated to the Specialty, Generics, and AvKARE segments, respectively. As of December 31, 2020, $361 million, $92 million, and $70 million of goodwill was allocated to the Specialty, Generics, and AvKARE segments, respectively. For the year ended December 31, 2021, the addition to goodwill was associated with the Puniska Acquisition and the KSP Acquisition. For the year ended December 31, 2020, the adjustment to goodwill acquired was associated with the Rondo Acquisitions. Refer to Note 3. Acquisitions and Divestitures for additional information about the Puniska Acquisition, the KSP Acquisition, and the Rondo Acquisitions. Annual Goodwill Impairment Test The Company performed a quantitative annual goodwill impairment test for each reporting unit on October 1, 2021, the measurement date. The analysis performed included estimating the fair value of each reporting unit using both the income and market approaches. Based on the results of the annual impairment test, the Company determined that the estimated fair values of the Generics, Specialty and AvKARE reporting units exceeded their respective carrying amounts as of the measurement date; therefore, the Company did not record an impairment charge for the year ended December 31, 2021. There were no indicators of goodwill impairment during the year ended December 31, 2021, including the period subsequent to the measurement date. In performing the annual goodwill impairment test, the Company utilized long-term growth rates for its reporting units ranging from no growth to 1.0% and discount rates ranging from 9.0% to 10.5% in its estimation of fair value. As of December 31, 2021, the estimated fair value of the Generics reporting unit was in excess of its carrying value by approximately 97%, the estimated fair value of the Specialty reporting unit was in excess of its carrying value by approximately 68% and the estimated fair value of the AvKARE reporting unit was in excess of its carrying value by approximately 86%. A 500-basis point increase in the assumed discount rates utilized in each test would not have resulted in a goodwill impairment charge in any of the Company's reporting units. While management believes the assumptions used were reasonable and commensurate with the views of a market participant, changes in key assumptions for these reporting units, including increasing the discount rate, lowering forecasts for revenue and operating margin or lowering the long-term growth rate, could result in a future impairment. Intangible assets were comprised of the following (in thousands):
For the year ended December 31, 2021, the Company recognized a total of $23.4 million of intangible asset impairment charges, of which $22.7 million was recognized in cost of goods sold and $0.7 million was recognized in in-process research and development. The impairment charges for the year ended December 31, 2021 were primarily related to seven currently marketed products and one IPR&D product. For the currently marketed products, five products experienced significant price erosion during 2021, without an offsetting increase in customer demand, resulting in significantly lower than expected future cash flows and negative margins. Of the five currently marketed products that experienced significant price erosion during 2021, Levothyroxine contributed $17.7 million of the $23.4 million in cost of goods sold impairment charges (refer to Note 5. Alliance and Collaboration for additional information about the Company’s Levothyroxine license with JSP). Additionally, the supply agreements for two currently marketed products will be terminated early due to market conditions. The IPR&D charge was associated with one product which experienced a delay in its estimated launch date. For the year ended December 31, 2020, the Company recognized a total of $37.3 million of intangible asset impairment charges, of which $34.6 million was recognized in cost of goods sold and $2.7 million was recognized in in-process research and development. The impairment charges for the year ended December 31, 2020 were primarily related to six currently marketed products and four IPR&D products. For the currently marketed products, four products experienced significant price erosion during 2020, without an offsetting increase in customer demand, resulting in significantly lower than expected future cash flows and negative margins, one product had its contract terminated and one product’s supply agreement ended under an early termination due to market conditions. The IPR&D charges were associated with four products, three of which experienced significant price erosion for the products, resulting in significantly lower than expected future cash flows, and the other of which was canceled due to the withdrawal of the Company’s development partner. Amortization expense related to intangible assets recognized was as follows (in thousands):
The following table presents future amortization expense for the next five years and thereafter, excluding $405 million of IPR&D intangible assets (in thousands).
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Accounts Payable and Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses were comprised of the following (in thousands):
(1)Refer to Note 4. Revenue Recognition for additional information. (2)Refer to Note 21. Commitments and Contingencies for additional information.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following is a summary of the Company's total indebtedness (in thousands):
Senior Secured Credit Facilities On May 4, 2018 the Company entered into a senior credit agreement that provided a term loan ("Term Loan") with a principal amount of $2.7 billion and an asset backed revolving credit facility ("Revolving Credit Facility") under which loans and letters of credit up to a principal amount of $500 million are available (principal amount of up to $25 million is available for letters of credit) (collectively, the "Senior Secured Credit Facilities"). The Term Loan is repayable in equal quarterly installments at a rate of 1.00% of the original principal amount annually, with the balance payable at maturity on May 4, 2025. The Term Loan bears a variable annual interest rate, which is one-month LIBOR plus 3.5% at December 31, 2021. In October 2019, the Company entered into an interest rate lock agreement for a total notional amount of $1.3 billion to hedge part of the Company's interest rate exposure associated with the variability in future cash flows from changes in the one-month LIBOR associated with its Term Loan. For further details, refer to Note 20. Financial Instruments. The Term Loan requires regular principal payments of $6.75 million quarterly in 2022, 2023, 2024, and 2025, with the balance of the Term Loan payable at maturity on May 4, 2025. Annually, the Company is also required to calculate the amount of excess cash flows, as defined in the Term Loan agreement. Based on the results of the excess cash flows calculation for the year ended December 31, 2020, the Company made a $14 million additional principal payment in March 2021. Based on the results of the excess cash flows calculation for the year ended December 31, 2021, no additional principal payments are due in 2022. The Revolving Credit Facility bears an annual interest rate of one-month LIBOR plus 1.25% at December 31, 2021 and matures on May 4, 2023. The annual interest rate for the Revolving Credit Facility may be reduced or increased by 0.25% based on step-downs and step-ups determined by the average historical excess availability. At December 31, 2021, the Company had no outstanding borrowings and $489 million of availability under the Revolving Credit Facility. The proceeds from the Term Loan were used to finance, in part, the cost of the acquisition of Impax and to pay off Amneal’s debt and substantially all of Impax’s debt at the close of the acquisition of Impax. The proceeds of any loans made under the Senior Secured Credit Facilities can be used for capital expenditures, acquisitions, working capital needs and other general purposes, subject to covenants as described below. The Company pays a commitment fee based on the average daily unused amount of the Revolving Credit Facility at a rate based on average historical excess availability, between 0.25% and 0.375% per annum. At December 31, 2021, the Revolving Credit Facility commitment fee rate was 0.375% per annum. During March 2020, as a precautionary measure to mitigate the uncertainty surrounding overall market liquidity due to the COVID-19 pandemic, the Company borrowed $300 million on the Revolving Credit Facility. As the financial markets stabilized following a period of high volatility due to the COVID-19 pandemic, the Company repaid all borrowings under the Revolving Credit Facility as of June 30, 2020. The Company incurred costs associated with the Term Loan due May 2025 of $38 million and the Revolving Credit Facility of $5 million, which have been capitalized and are being amortized over the life of the applicable debt agreement to interest expense using the effective interest method. The Term Loan has been recorded in the balance sheet net of issuance costs. Costs associated with the Revolving Credit Facility have been recorded in other assets because there were no borrowings outstanding on the effective date of the Revolving Credit Facility. For each of the years ended December 31, 2021, 2020 and 2019, amortization of deferred financing costs related to the Term Loan and the Revolving Credit Facility was $6 million. The Senior Secured Credit Facilities contain a number of covenants that, among other things, create liens on Amneal’s and its subsidiaries’ assets. The Senior Secured Credit Facilities contain certain negative covenants that, among other things and subject to certain exceptions, restrict Amneal’s and its subsidiaries’ ability to incur additional debt or guarantees, grant liens, make loans, acquisitions or other investments, dispose of assets, merge, dissolve, liquidate or consolidate, pay dividends or other payments on capital stock, make optional payments or modify certain debt instruments, modify certain organizational documents, enter into arrangements that restrict the ability to pay dividends or grant liens, or enter into or consummate transactions with affiliates. The Revolving Credit Facility also includes a financial covenant whereby Amneal must maintain a minimum fixed charge coverage ratio if certain borrowing conditions are met. The Senior Secured Credit Facilities contain customary events of default, subject to certain exceptions. Upon the occurrence of certain events of default, the obligations under the Senior Secured Credit Facilities may be accelerated and the commitments may be terminated. At December 31, 2021, Amneal was in compliance with all covenants. Acquisition Financing - Revolving Credit and Term Loan Agreement On January 31, 2020, in connection with the Rondo Acquisitions, Rondo Intermediate Holdings, LLC (“Rondo Holdings”), a wholly-owned subsidiary of Rondo, entered into a revolving credit and term loan agreement (“Rondo Credit Facility”) that provided a term loan (“Rondo Term Loan”) with a principal amount of $180 million and a revolving credit facility (“Rondo Revolving Credit Facility”) which loans up to a principal amount of $30 million. The Rondo Term Loan is repayable in equal quarterly installments at a rate of 5.0% of the original principal amount annually, with the balance payable at maturity on January 31, 2025. The Rondo Credit Facility bears a variable annual interest rate, which originated as one-month LIBOR plus 3.0%. During September 2021, the Company prepaid $25 million of outstanding principal of the Rondo Term Loan, which permitted the variable rate to be repriced. At December 31, 2021, the variable annual interest rate is one-month LIBOR plus 2.5%. Additionally, the annual interest rate for borrowings under the Rondo Credit Facility may be reduced or increased by 0.25% based on step-downs and step-ups determined by the total net leverage ratio, as defined in that agreement. At December 31, 2021, the Company had no outstanding borrowings under the Rondo Revolving Credit Facility. A commitment fee based on the average daily unused amount of the Rondo Credit Facility is assessed at a rate based on total net leverage ratio, between 0.25% and 0.50% per annum. At December 31, 2021, the Rondo Credit Facility commitment fee rate was 0.25% per annum. Costs associated with the Rondo Term Loan of $3 million and the Rondo Credit Facility of $1 million have been capitalized and are being amortized over the life of the applicable debt instrument to interest expense using the effective interest method. The Rondo Term Loan has been recorded in the balance sheet net of issuance costs. Costs associated with the Rondo Revolving Credit Facility have been recorded in other assets. For the year ended December 31, 2021, amortization of deferred financing costs associated with the Rondo Credit Facility was less than $1 million. The Rondo Credit Facility contains a number of covenants that, among other things, create liens on the equity securities and assets of Rondo Holdings, Rondo, AvKARE, LLC and R&S. The Rondo Credit Facility contains certain negative, affirmative and financial covenants that, among other things, restrict the ability to incur additional debt, grant liens, transact in mergers and acquisitions, make certain investments and payments or engage in certain transactions with affiliates. The Rondo Credit Facility also contains customary events of default. Upon the occurrence of certain events of default, the obligations under the Rondo Credit Facility may be accelerated and/or the interest rate may be increased. At December 31, 2021, Rondo was in compliance with all covenants. The Company is not party to the Rondo Credit Facility and is not a guarantor of any debt incurred thereunder. The Rondo Term Loan requires principal payments of $9 million per year for the next three years and the balance payable at maturity on January 31, 2025. Acquisition Financing – Notes Payable-Related Party On January 31, 2020, the closing date of the Rondo Acquisitions, Rondo or its subsidiary, Rondo Top Holdings, LLC, issued the Sellers Notes with a stated aggregate principal amount of $44 million and the Short-Term Sellers Note with a stated principal amount of $1 million. The Sellers Notes are unsecured and accrue interest at a rate of 5% per annum, not compounded, until June 30, 2025. The Sellers Notes are subject to prepayment at the option of Rondo, as the obligor, without premium or penalty. Mandatory payment of the outstanding principal and interest is due on June 30, 2025 if certain financial targets are achieved, the borrowers’ cash flows are sufficient (as defined in the Sellers Notes) and repayment is not prohibited by senior debt. If repayment of all outstanding principal and accrued interest on the Sellers Notes is not made on June 30, 2025, the requirements for repayment are revisited on June 30 of each subsequent year until all principal and accrued interest are satisfied no later than January 31, 2030 or earlier, upon a change in control. The Short-Term Sellers Note was also unsecured, accrued interest at a rate of 1.6%, and was paid during February 2021. In accordance with ASC 805, Business Combinations, all consideration transferred was measured at its acquisition-date fair value. The Sellers Notes were stated at the fair value estimate of $35 million, which was estimated using the Monte-Carlo simulation approach under the option pricing framework. The Short-Term Sellers Note of $1 million was recorded at the stated principal amount of $1 million, which approximated fair value. The $9 million discount on the Sellers Notes will be amortized to interest expense using the effective interest method from January 31, 2020 to June 30, 2025 and the carrying value of the Sellers Notes will accrete to the stated principal amount of $44 million. During the year ended December 31, 2021, amortization of the discount related to the Sellers Notes was $1 million. The Company is not party to or a guarantor of the Sellers Notes. The Sellers Notes were recorded in notes payable-related party within long-term liabilities as of December 31, 2021 and 2020. The Short-Term Sellers Note was recorded in current portion of note payable - related party as of December 31, 2020.
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Other Long-Term Liabilities |
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Other Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities were comprised of the following (in thousands):
(1) Refer to Note 19. Fair Value Measurements and Note 20. Financial Instruments for information about the Company’s interest rate swap. (2) Includes $12 million of long-term deferred compensation plan liabilities (refer to Note 19. Fair Value Measurements) and $8 million of long-term employee benefits for the Company’s international employees. (3) As noted in Note 2. Summary of Significant Accounting Policies and Note 12. Leases, the prior period balance of $2 million related to long-term financing lease liabilities as of December 31, 2020 has been reclassified to its own balance sheet caption to conform to the current period presentation in the consolidated balance sheet.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, the Company uses the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable:
Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level of classification for each reporting period. The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis (in thousands):
(1)The fair value measurement of the Company’s interest rate swap classified within Level 2 of the fair value hierarchy is a model-derived valuation as of a given date in which all significant inputs are observable in active markets including certain financial information and certain assumptions regarding past, present, and future market conditions. Refer to Note 20. Financial Instruments for information about the Company’s interest rate swap. (2)As of December 31, 2021 and 2020, deferred compensation plan liabilities of $2 million and $12 million were recorded in current and non-current liabilities, respectively. These liabilities are recorded at the value of the amount owed to the plan participants, with changes in value recognized as compensation expense. The calculation of the deferred compensation plan obligation is derived from observable market data by reference to hypothetical investments selected by the participants. (3)The fair value measurement of contingent consideration liability has been classified as a Level 3 recurring liability as its valuation requires judgment and estimation of factors that are not currently observable in the market. If different assumptions were used for various inputs, the estimated fair value could be higher or lower than what the Company determined. As of December 31, 2021, the contingent consideration liability of $6 million was recorded within related party payable-long term. Refer to Note 3. Acquisitions and Divestitures for additional information related to the KSP Acquisition. There were no transfers between levels in the fair value hierarchy during the year ended December 31, 2021. Contingent consideration On April 2, 2021, the Company completed the KSP Acquisition, which provided for contingent milestone payments of up to an aggregate of $8 million (undiscounted) upon the achievement of certain regulatory milestones, as well as contingent royalty payments that are tiered depending on the net sales amount of aggregate annual net sales for certain future pharmaceutical products. The following table provides a reconciliation of the contingent consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) through December 31, 2021 (in thousands):
The fair value measurement of the contingent consideration liabilities was determined based on significant unobservable inputs, including the discount rate, estimated probabilities of success, timing of achieving specified regulatory milestones and the estimated amount of future sales of the acquired products. The contingent consideration liability is estimated by applying a probability-weighted expected payment model for contingent milestone payments and a Monte Carlo simulation model for contingent royalty payments, which are then discounted to present value. Changes to fair value of the contingent consideration liabilities can result from changes to one or a number of the aforementioned inputs. If different assumptions were used for various inputs, the estimated fair value could be higher or lower than what the Company determined. The following table summarizes the significant unobservable inputs used in the fair value measurement of our contingent consideration liabilities as of December 31, 2021:
(1) Unobservable inputs were weighted by the relative fair value of each product candidate acquired. Assets and Liabilities Not Measured at Fair Value on a Recurring Basis The carrying amounts of cash, accounts receivable and accounts payable approximate their fair values due to the short-term maturity of these instruments. The Term Loan is in the Level 2 category within the fair value level hierarchy. The fair value was determined using market data for valuation. The fair value of the Term Loan at both December 31, 2021 and 2020 was approximately $2.6 billion. The Rondo Term Loan is in the Level 2 category within the fair value level hierarchy. The fair value of the Rondo Term Loan at December 31, 2021 and 2020 was approximately $139 million and $172 million, respectively. The Sellers Notes are in the Level 2 category within the fair value level hierarchy. At December 31, 2021 and 2020 the fair value of the Sellers Notes of $38 million and $36 million, respectively, approximated their carrying value. Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis There were no non-recurring fair value measurements during the years ended December 31, 2021 and 2020.
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Financial Instruments |
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Financial Instruments | Financial Instruments The Company uses an interest rate swap to manage its exposure to market risks for changes in interest rates. Interest Rate Risk The Company is exposed to interest rate risk on its debt obligations. Interest income earned on cash and cash equivalents may fluctuate as interest rates change; however, due to their relatively short maturities, the Company does not hedge these assets or their investment cash flows and the impact of interest rate risk is not material. The Company's debt obligations consist of variable-rate and fixed-rate debt instruments (for further details, refer to Note 17. Debt). The Company's primary objective is to achieve the lowest overall cost of funding while managing the variability in cash outflows within an acceptable range. In order to achieve this objective, the Company has entered into an interest rate swap on the Term Loan. Interest Rate Derivative – Cash Flow Hedge The interest rate swap involves the periodic exchange of payments without the exchange of underlying principal or notional amounts. In October 2019, the Company entered into an interest rate lock agreement for a total notional amount of $1.3 billion to hedge part of the Company's interest rate exposure associated with the variability in future cash flows from changes in the one-month LIBOR associated with its Term Loan. As of December 31, 2021, the total loss, net of income taxes, related to the Company’s cash flow hedge was $11.5 million, of which $6.0 million was recognized in accumulated other comprehensive loss and $5.5 million was recognized in non-controlling interests. As of December 31, 2020, the total loss, net of income taxes, related to the Company’s cash flow hedge was $54 million, of which $27 million was recognized in each of accumulated other comprehensive loss and non-controlling interests. A summary of the fair values of derivative instruments in the consolidated balance sheets was as follows (in thousands):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Commercial Manufacturing, Collaboration, License, and Distribution Agreements The Company continues to seek to enhance its product line and develop a balanced portfolio of differentiated products through product acquisitions and in-licensing. Accordingly, the Company, in certain instances, may be contractually obligated to make potential future development, regulatory, and commercial milestone, royalty and/or profit sharing payments in conjunction with collaborative agreements or acquisitions that the Company has entered into with third parties. The Company has also licensed certain technologies or intellectual property from various third parties. The Company is generally required to make upfront payments as well as other payments upon successful completion of regulatory or sales milestones. The agreements generally permit the Company to terminate the agreement with no significant continuing obligation. The Company could be required to make significant payments pursuant to these arrangements. These payments are contingent upon the occurrence of certain future events and, given the nature of these events, it is unclear when, if ever, the Company may be required to pay such amounts. Further, the timing of any future payment is not reasonably estimable. Refer to Note 5. Alliance and Collaboration for additional information. Certain of these arrangements are with related parties. Refer to Note 24. Related Party Transactions for additional information. Contingencies Legal Proceedings The Company's legal proceedings are complex, constantly evolving and subject to uncertainty. As such, the Company cannot predict the outcome or impact of the legal proceedings set forth below. Additionally, the Company is subject to legal proceedings that are not set forth below. While the Company believes it has valid claims and/or defenses to the matters described below, the nature of litigation is unpredictable, and the outcome of the following proceedings could include damages, fines, penalties and injunctive or administrative remedies. For any proceedings where losses are probable and reasonably capable of estimation, the Company accrues for a potential loss. When the Company has a probable loss for which a reasonable estimate of the liability is a range of losses and no amount within that range is a better estimate than any other amount, the Company records the loss at the low end of the range. While these accruals have been deemed reasonable by the Company’s management, the assessment process relies heavily on estimates and assumptions that may ultimately prove inaccurate or incomplete. Additionally, unforeseen circumstances or events may lead the Company to subsequently change its estimates and assumptions. Unless otherwise indicated below, the Company is unable at this time to estimate the possible loss or the range of loss, if any, associated with such legal proceedings and claims. The Company currently intends to vigorously prosecute and/or defend these proceedings as appropriate. From time to time, however, the Company may settle or otherwise resolve these matters on terms and conditions that it believes to be in its best interest. For the years ended December 31, 2021, 2020, and 2019, the Company recorded net charges of $25 million, $6 million, and $12 million, respectively, for commercial legal proceedings and claims. The Company had total liabilities for legal proceedings and claims of $58 million and $11 million as of December 31, 2021 and 2020, respectively, of which $33 million and $6 million, respectively, were recorded for a securities class action covered by insurance (refer to Securities Class Actions below and Note 13. Prepaid Expenses and Other Current Assets for additional information). An insurance recovery will be recorded in the period in which it is probable the recovery will be realized. The ultimate resolution of any or all claims, legal proceedings or investigations could differ materially from our estimate and have a material adverse effect on the Company's results of operations and/or cash flows in any given accounting period, or on the Company's overall financial condition. Additionally, the Company manufactures and derives a portion of its revenue from the sale of pharmaceutical products in the opioid class of drugs and may therefore face claims arising from the regulation and/or consumption of such products. The Company believes it has meritorious claims and defenses in these matters and intends to vigorously prosecute and defend them. However, because the ultimate outcome and costs associated with litigation are inherently uncertain and difficult to predict, except as otherwise stated, the Company is not in a position to predict the likelihood of an unfavorable outcome or provide an estimate of the amount or range of potential loss in the event of an unfavorable outcome in any of these matters, and any adverse outcome could negatively affect the Company and could have a material adverse effect on the Company's results of operations, cash flows and/or overall financial condition. Medicaid Reimbursement and Price Reporting Matters The Company is required to provide pricing information to state agencies, including agencies that administer federal Medicaid programs. Certain state agencies have alleged that manufacturers have reported improper pricing information, which allegedly caused them to overpay reimbursement costs. Other agencies have alleged that manufacturers have failed to timely file required reports concerning pricing information. Liabilities are periodically established by the Company for any potential claims or settlements of overpayment. The Company intends to vigorously defend against any such claims. The ultimate settlement of any potential liability for such claims may be higher or lower than estimated. Patent Litigation There is substantial litigation in the pharmaceutical, biological, and biotechnology industries with respect to the manufacture, use, and sale of new products which are the subject of conflicting patent and intellectual property claims. One or more patents often cover the brand name products for which the Company is developing generic versions and the Company typically has patent rights covering the Company’s branded products. Under federal law, when a drug developer files an Abbreviated New Drug Application (“ANDA”) for a generic drug seeking approval before expiration of a patent which has been listed with the FDA as covering the brand name product, the developer must certify its product will not infringe the listed patent(s) and/or the listed patent is invalid or unenforceable (commonly referred to as a “Paragraph IV” certification). Notices of such certification must be provided to the patent holder, who may file a suit for patent infringement within 45 days of the patent holder’s receipt of such notice. If the patent holder files suit within the 45-day period, the FDA can review and tentatively approve the ANDA, but generally is prevented from granting final marketing approval of the product until a final judgment in the action has been rendered in favor of the generic drug developer, or 30 months from the date the notice was received, whichever is sooner. The Company’s Generics segment is typically subject to patent infringement litigation brought by branded pharmaceutical manufacturers in connection with the Company’s Paragraph IV certifications seeking an order delaying the approval of the Company’s ANDA until expiration of the patent(s) at issue in the litigation. The uncertainties inherent in patent litigation make the outcome of such litigation difficult to predict. For the Company’s Generics segment, the potential consequences in the event of an unfavorable outcome in such litigation include delaying launch of its generic products until patent expiration. If the Company were to launch its generic product prior to successful resolution of a patent litigation, the Company could be liable for potential damages measured by the profits lost by the branded product manufacturer rather than the profits earned by the Company if it is found to infringe a valid, enforceable patent, or enhanced treble damages in cases of willful infringement. For the Company’s Specialty segment, an unfavorable outcome may significantly accelerate generic competition ahead of expiration of the patents covering the Company’s branded products. All such litigation typically involves significant expense. The Company is generally responsible for all of the patent litigation fees and costs associated with current and future products not covered by its alliance and collaboration agreements. The Company has agreed to share legal expenses with respect to third-party and Company products under the terms of certain of the alliance and collaboration agreements. The Company records the costs of patent litigation as expense in the period when incurred for products it has developed, as well as for products which are the subject of an alliance or collaboration agreement with a third-party. Patent Defense Matter Biogen International GMBH, et al. v. Amneal Pharmaceuticals LLC, et al. (Dimethyl Fumarate) In June 2017, Biogen International GMBH (“Biogen”) filed suit against Amneal and various other generic manufacturers in the United States District Court for the District of Delaware (“D. Del.”) alleging patent infringement based on the filing of ANDAs by Amneal and others for generic alternatives to Biogen’s Tecfidera® (dimethyl fumarate) capsules product (Biogen International GMBH, et al. v. Amneal Pharmaceuticals LLC, et al., No. 1:17-cv-00823-MN). Biogen also filed suit in June 2017 against Mylan Pharmaceuticals Inc. (“Mylan”) in the United States District Court for the Northern District of West Virginia (“N.D. W. Va.”) relating to Mylan’s own ANDA for Tecfidera®. On June 18, 2020, the N.D. W. Va. court issued an order finding the sole Biogen patent at issue invalid. Biogen has appealed the order to the United States Court of Appeals for the Federal Circuit. On September 22, 2020, the D. Del. court entered judgment in favor of defendants (including Amneal), adopting the finding of invalidity made by the N.D. W. Va. court but ordering that claims could be reinstated based on the result of the appeal of the N.D. W. Va. court’s order. Amneal, like Mylan and a number of other generic manufacturers, has now launched its generic dimethyl fumarate capsules product “at-risk,” pending the outcome of Biogen’s appeal of the N.D. W. Va. court’s order before the Federal Circuit. On November 30, 2021, a panel of three Federal Circuit judges affirmed the N.D. W. Va. court’s order that Biogen’s patent is invalid. On December 30, 2021, Biogen filed a petition to request “en banc” review by the full court. Amneal’s D.Del. case continues to be held in abeyance until the Federal Circuit issues a mandate in the Mylan case. Other Litigation Related to the Company’s Business Opana ER® FTC Matters On February 25, 2014, Impax received a Civil Investigative Demand (“CID”) from the Federal Trade Commission (“FTC”) concerning its investigation into the drug Opana® ER and its generic equivalents. On March 30, 2016, the FTC filed a complaint against Impax, Endo Pharmaceuticals Inc. (“Endo”), and others in the United States District Court for the Eastern District of Pennsylvania, alleging that Impax and Endo violated antitrust laws when they entered into a June 2010 settlement agreement that resolved patent litigation in connection with the submission of Impax’s ANDA for generic original Opana® ER. In October 2016, the Court granted Impax’s motion to sever, formally terminating the suit against Impax. In January 2017, the FTC filed a Part 3 Administrative Complaint against Impax with similar allegations regarding the 2010 settlement. Following trial, in May 2018, the Administrative Law Judge ruled in favor of Impax and dismissed the Complaint in its entirety. FTC Complaint Counsel appealed the decision to the full Commission, and in March 2019, the FTC issued an Opinion & Order reversing the Administrative Law Judge’s decision. The Opinion & Order did not provide for any monetary damages but enjoined Impax from entering into future agreements containing certain terms. Impax filed a Petition for Review of the FTC’s Opinion & Order with the United States Court of Appeals for the Fifth Circuit, and on April 13, 2021, the Fifth Circuit issued a decision denying Impax’s Petition for Review, effectively affirming the FTC’s Opinion & Order. On September 10, 2021, Impax filed a petition for writ of certiorari in the U.S. Supreme Court, which was denied in December 2021. On July 12, 2019, the Company received a CID from the FTC concerning an August 2017 settlement agreement between Impax and Endo, which resolved a subsequent patent infringement and breach of contract dispute between the parties regarding the above-referenced June 2010 settlement agreement related to Opana® ER. The Company cooperated with the FTC regarding the CID. On January 25, 2021, the FTC filed a complaint against Endo, Impax and Amneal in the United States District Court for the District of Columbia, alleging that the 2017 settlement violated antitrust laws. In April 2021, the Company filed a motion to dismiss the FTC’s complaint, and that motion is currently pending. The Company believes it has strong defenses to the FTC’s allegations and intends to vigorously defend the action, however, no assurance can be given as to the timing or outcome of the litigation. Opana ER® Antitrust Litigation From June 2014 to April 2015, a number of complaints styled as class actions on behalf of direct purchasers and indirect purchasers (or end-payors) and several separate individual complaints on behalf of certain direct purchasers (the “opt-out plaintiffs”) of Opana ER® were filed against Endo and Impax. In December 2014, the United States Judicial Panel on Multidistrict Litigation (the “JPML”) transferred the actions to the United States District Court for the Northern District of Illinois (“N.D. Ill.”) for coordinated pretrial proceedings, as In Re: Opana ER Antitrust Litigation (MDL No. 2580) (“MDL”). In each case, the complaints allege that Endo engaged in an anticompetitive scheme by, among other things, entering into an anticompetitive settlement agreement with Impax to delay generic competition of Opana ER® and in violation of state and federal antitrust laws. Plaintiffs seek, among other things, unspecified monetary damages and equitable relief, including disgorgement and restitution. On March 25, 2019, plaintiffs filed motions for class certification and served expert reports. Defendants’ oppositions to class certification and expert reports were filed and served on August 29, 2019. On April 15, 2020, defendants filed motions for summary judgment and each side moved to exclude certain opposing experts. On June 4, 2021, the MDL court granted the end-payor plaintiffs’ and direct purchaser plaintiffs’ class certification motions. Defendants appealed certification of the end-payor plaintiffs’ class, and on July 13, 2021, the Seventh Circuit granted defendants’ petition and remanded the case to the MDL to consider specific issues regarding uninjured class members. On August 11, 2021, the MDL court entered an order certifying end-payor plaintiffs’ class with an amended class definition. On June 4, 2021, the MDL also denied defendants’ summary judgment motion except as to certain state law claims and issued an opinion excluding certain experts of both sides. Trial is currently scheduled for June 2022. Sergeants Benevolent Association Health & Welfare Fund v. Actavis, PLC, et. al. In August 2015, a complaint styled as a class action was filed against Forest Laboratories (a subsidiary of Actavis plc) and numerous generic drug manufacturers, including Amneal, in the United States District Court for the Southern District of New York involving patent litigation settlement agreements between Forest Laboratories and the generic drug manufacturers concerning generic versions of Forest’s Namenda IR product. The complaint (as amended on February 12, 2016) asserts federal and state antitrust claims on behalf of indirect purchasers, who allege in relevant part that during the class period they indirectly purchased Namenda® IR or its generic equivalents in various states at higher prices than they would have absent the defendants’ allegedly unlawful anticompetitive conduct. Plaintiffs seek, among other things, unspecified monetary damages and equitable relief, including disgorgement and restitution. On September 13, 2016, the Court stayed the indirect purchaser plaintiffs’ claims pending factual development or resolution of claims brought in a separate, related complaint by direct purchasers (in which the Company is not a defendant). On September 10, 2018, the Court lifted the stay, referred the case to the assigned Magistrate Judge for supervision of supplemental, non-duplicative discovery in advance of mediation to be scheduled in 2019. The parties thereafter participated in supplemental discovery, as well as supplemental motion-to-dismiss briefing. On December 26, 2018, the Court granted in part and denied in part motions to dismiss the indirect purchaser plaintiffs’ claims. On January 7, 2019, Amneal, its relevant co-defendants, and the indirect purchaser plaintiffs informed the Magistrate Judge that they had agreed to mediation, which occurred in April 2019. In June 2019, the Company reached a settlement with plaintiffs, subject to Court approval. On September 10, 2019, the Court entered an order preliminarily approving the settlement and indefinitely staying the case as to the settling defendants (including the Company). The settlement is now subject to final approval from the Court. The amount of the settlement was not material to the Company's consolidated financial statements. Attorney General of the State of Connecticut Interrogatories and Subpoena Duces Tecum On July 14, 2014, Impax received a subpoena and interrogations from the State of Connecticut Attorney General (“Connecticut AG”) concerning its investigation into sales of Impax's generic product, digoxin. According to the Connecticut AG, the investigation concerned whether anyone engaged in a contract, combination or conspiracy in restraint of trade or commerce which had the effect of (i) fixing, controlling or maintaining prices or (ii) allocating or dividing customers or territories relating to the sale of digoxin. Impax cooperated in the investigation and produced documents and information in response to the subpoena in 2014 and 2015. However, no assurance can be given as to the timing or outcome of this investigation. United States Department of Justice Investigations On November 6, 2014, Impax disclosed that one of its sales representatives received a grand jury subpoena from the Antitrust Division of the United States Department of Justice (the “DOJ”). On March 13, 2015, Impax received a grand jury subpoena from the DOJ requesting the production of information and documents regarding the sales, marketing, and pricing of four generic prescription medications. Impax has cooperated in the investigation and produced documents and information in response to the subpoenas from 2014 to 2016. However, no assurance can be given as to the timing or outcome of the investigation. On April 30, 2018, Impax received a CID from the Civil Division of the DOJ (the “Civil Division”). The CID requests the production of information and documents regarding the pricing and sale of Impax’s pharmaceuticals and interactions with other generic pharmaceutical manufacturers regarding whether generic pharmaceutical manufacturers engaged in market allocation and price-fixing agreements, paid illegal remuneration, and caused false claims to be submitted to the Federal government. Impax has cooperated with the Civil Division’s investigation. However, no assurance can be given as to the timing or outcome of the investigation. Texas State Attorney General Civil Investigative Demand On May 27, 2014, a CID was served on Amneal by the Office of the Attorney General for the state of Texas (the “Texas AG”) relating to products distributed by Amneal under a specific Amneal labeler code. Shortly thereafter, Amneal received a second CID with respect to the same products sold by Interpharm Holding, Inc. (“Interpharm”), the assets of which had been acquired by Amneal in June 2008. Amneal completed its production of the direct and indirect sales transaction data in connection with the products at issue and provided this information to the Texas AG in November 2015. In May 2016, the Texas AG delivered two settlement demands to Amneal in connection with alleged overpayments made by the State of Texas for such products under its Medicaid programs. For the Amneal and Interpharm products at issue, the Texas AG’s initial demand was for an aggregate total of $36 million based on $16 million in alleged overpayments. After analyzing the Texas AG’s demand, Amneal raised certain questions regarding the methodology used in the Texas AG’s overpayment calculations, including the fact that the calculations treated all pharmacy claims after 2012 for the products at issue as claims for over-the-counter (“OTC”) drugs, even though the products were prescription pharmaceuticals. This had the effect of increasing the alleged overpayment because the dispensing fee for OTC drugs was lower than that for prescription drugs. Therefore, the Texas AG’s calculations were derived by subtracting a lower (and incorrect) OTC dispensing fee from the higher (and correct) prescription dispensing fee. The Texas AG later acknowledged this discrepancy. In March 2019, the Texas AG provided Amneal with a re-calculation of the alleged overpayment. In October 2019, Amneal reached an agreement in principle with the Texas AG to settle the matter. The parties executed a settlement agreement and release as of March 5, 2020, and the matter is now closed. In Re Generic Pharmaceuticals Pricing Antitrust Litigation Since March 2016, multiple putative antitrust class action complaints have been filed on behalf of direct purchasers, indirect purchasers (or end-payors), and indirect resellers, as well as individual complaints on behalf of certain direct and indirect purchasers, and municipalities (the “opt-out plaintiffs”) against manufacturers of generic drugs, including Impax and the Company. The complaints allege a conspiracy to fix, maintain, stabilize, and/or raise prices, rig bids, and allocate markets or customers for various generic drugs in violation of federal and state antitrust and consumer protection laws. Plaintiffs seek unspecified monetary damages and equitable relief, including disgorgement and restitution. The lawsuits have been consolidated in an MDL in the United States District Court for the Eastern District of Pennsylvania (In re Generic Pharmaceuticals Pricing Antitrust Litigation, No. 2724, (E.D. Pa.)). On May 10, 2019, Attorneys General of 43 States and the Commonwealth of Puerto Rico filed a complaint in the United States District Court for the District of Connecticut against various manufacturers and individuals, including the Company, alleging a conspiracy to fix, maintain, stabilize, and/or raise prices, rig bids, and allocate markets or customers for multiple generic drugs. On November 1, 2019, the State Attorneys General filed an Amended Complaint on behalf of nine additional states and territories. On June 10, 2020, Attorneys General of 46 States, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Territory of Guam, the U.S. Virgin Islands, and the District of Columbia filed a new complaint against various manufacturers and individuals, including the Company, alleging a conspiracy to fix prices, rig bids, and allocate markets or customers for additional generic drugs. Plaintiff States seek unspecified monetary damages and penalties and equitable relief, including disgorgement and restitution. On September 9, 2021, the State Attorneys General filed an Amended Complaint on behalf of California in addition to the original Plaintiff States. These lawsuits have been incorporated into MDL No. 2724. Fact and document discovery in MDL No. 2724 are proceeding. In May, 2021, the Court issued a revised order designating certain plaintiffs’ complaints regarding two generic drug products to proceed as bellwether cases, along with the Plaintiff States’ June 10, 2020 complaint. No final scheduling order has yet been issued for this matter. In May, 2021 the Court issued a revised order designating certain plaintiffs’ complaints regarding two generic drug products to proceed as bellwether cases, along with the Plaintiff States’ June 10, 2020 complaint involving the Company. There is another action in Canada alleging price fixing, among other claims, which has not progressed to date. Prescription Opioid Litigation The Company and certain of its affiliates have been named as defendants in various matters filed in state and federal courts relating to the sale of prescription opioid pain relievers. Plaintiffs in these actions include state Attorneys General, county and municipal governments, hospitals, Indian tribes, pension funds, third-party payors and individuals. Plaintiffs seek unspecified monetary damages and other forms of relief based on various causes of action, including negligence, public nuisance, unjust enrichment, and civil conspiracy, as well as alleged violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), state and federal controlled substances laws and other statutes. All cases involving the Company also name other manufacturers, distributors and retail pharmacies as defendants, and. there are numerous other cases involving allegations relating to prescription opioid pain relievers against other manufacturers, distributors and retail pharmacies in which the Company and its affiliates are not named. Nearly all cases pending in federal district courts have been consolidated for pre-trial proceedings in an MDL in the United States District Court for the Northern District of Ohio (In re: National Prescription Opiate Litigation, Case No. 17-mdl-2804). There are approximately 920 cases in the MDL in which the Company or its affiliates have been named as defendants. The Company also is named in approximately 120 state court cases pending in 11 states. The Company has filed motions to dismiss in many of these cases. No firm trial dates have been set except one case in New Mexico (September 2022). Following a decision by the West Virginia Supreme Court of Appeals in June 2021, the trial court in West Virginia set trial dates for April (manufacturers), July (distributors), and September (pharmacies) 2022, but the Company is not a defendant in the manufacturer trial and it is unclear if the Company will be involved in the trial of any case currently selected by the court. Securities Class Actions On April 17, 2017, New York Hotel Trades Council & Hotel Association of New York City, Inc. Pension Fund filed an amended putative class action complaint in the United States District Court for the Northern District of California against Impax and four former Impax officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 (Fleming v. Impax Laboratories Inc., et al., No. 4:16-cv-6557-HSG). Plaintiff alleges that Impax (1) concealed collusion with competitors to fix the price of the generic drug digoxin; (2) concealed anticipated erosion in the price of generic drug diclofenac; and (3) overstated the value of the generic drug budesonide. In August 2019, the Court granted Impax’s motion to dismiss Plaintiff’s second amended complaint in its entirety. Plaintiff appealed to the United States Court of Appeals for the Ninth Circuit, and on January 11, 2021, the Ninth Circuit issued an unpublished opinion affirming in part and reversing in part the District Court’s decision. Defendants subsequently filed a motion for rehearing with the Ninth Circuit, and Plaintiff filed a motion to intervene seeking to add Sheet Metal Workers’ Pension Fund of Southern California, Arizona and Nevada (“Sheet Metal Workers”) as an additional named Plaintiff. The Ninth Circuit denied the motions, and on April 1, 2021, the case was remanded to the District Court. On April 19, 2021, the Company filed a motion to dismiss the remaining claims and an opposition to Sheet Metal Workers’ renewed motion to intervene. In June 2021, the parties reached a tentative agreement to settle all claims in the case for $33 million, subject to certain terms and conditions and subject to court approval. The proposed settlement is covered in full by insurance (refer to Note 13. Prepaid Expenses and Other Current Assets). The district court entered an order granting preliminary approval of the settlement on November 22, 2021 and scheduled a fairness hearing for March 21, 2022. On December 18, 2019, Cambridge Retirement System filed a putative class action complaint in the Superior Court of New Jersey, Somerset County against the Company and certain current or former officers alleging violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (Cambridge Retirement System v. Amneal Pharmaceuticals, Inc., et al., No. SOM-L-1701-19). Plaintiffs allege that the May 7, 2018 amended registration statement and prospectus issued in connection with the Amneal/Impax business combination was materially false and/or misleading because it failed to disclose that Amneal allegedly engaged in anticompetitive conduct to fix generic drug prices. Plaintiffs filed a motion for class certification on October 30, 2020 and in April 2021 filed a second amended complaint including similar allegations with regard to a November 2017 registration statement and prospectus issued in connection with the Amneal/ Impax business combination. The Company’s motion to dismiss and Plaintiff’s motion for class certification are currently pending. In February 2022, the parties reached a tentative agreement to settle the claims, subject to, among other things, the negotiation and court approval of a definitive settlement agreement. Teva v. Impax Laboratories, LLC. On February 15, 2017, plaintiffs Teva Pharmaceuticals USA, Inc. and Teva Pharmaceuticals Curacao N.V. (“Teva”) filed a Praecipe to Issue Writ of Summons and Writ of Summons in the Philadelphia County Court of Common Pleas against Impax alleging that Impax breached the Strategic Alliance Agreement between the parties by not indemnifying Teva in its two litigations with GlaxoSmithKline LLC regarding Wellbutrin ® XL (and therefore that Impax is liable to Teva for the amounts it paid to settle those litigations). Impax filed a Motion to Disqualify Teva’s counsel related to the matter, and on August 23, 2017, the trial court denied Impax's motion. Following the trial court’s order, Teva filed its complaint. On September 6, 2017, Impax appealed the trial court’s decision to the Pennsylvania Superior Court. On September 20, 2017, the Superior Court stayed the trial court action pending the outcome of Impax’s appeal. On November 2, 2018, the Superior Court affirmed the trial court’s decision. On November 16, 2018, Impax filed an application for reargument with the Superior Court, which was denied on December 28, 2018. On February 13, 2019, the Superior Court remitted the record to the trial court. On February 15, 2019, Impax filed its answer with new matter to Teva’s complaint. On February 19, 2019, the trial court issued a revised case management order providing that, absent any extensions or amendments thereto, discovery was to have closed on July 1, 2019 and the case is expected to be ready for trial by February 3, 2020. On or about March 4, 2019, Teva filed a motion for judgment on the pleadings. Impax filed its answer and brief in opposition to Teva’s motion for judgment on the pleadings on March 25, 2019. On April 4, 2019, the trial court denied Teva’s motion. On April 16, 2019, Impax filed a motion to stay the proceedings and compel Teva to arbitrate the dispute pursuant to an Indemnification Release Agreement negotiated and executed by the parties in 2012. Teva’s opposition to the motion was filed on May 7, 2019. On June 11, 2019, the trial court denied Impax’s motion. On June 24, 2019, Impax noticed its intent to appeal to the Superior Court the trial court’s denial of the motion to compel arbitration, and moved both to stay the trial court proceedings pending that appeal and for an extension of case management deadlines. On July 12, 2019, the trial court denied both motions. On July 24, 2019, Impax moved the Superior Court to stay all trial court proceedings pending the outcome of Impax’s appeal of the trial court’s denial of the motion to compel arbitration and, on August 13, 2019, the Superior Court granted Impax’s motion. Impax filed its opening appellate brief with the Superior Court on September 3, 2019 and Teva filed its response brief on October 3, 2019. In October 2019, the parties reached an agreement in principle to resolve the matter, and in November 2019, the parties executed a settlement agreement and general release. On December 16, 2019, Teva filed with the trial court a praecipe to mark the action settled, discontinued and ended with prejudice. United States Department of Justice / Drug Enforcement Administration Subpoenas On July 7, 2017, Amneal Pharmaceuticals of New York, LLC received an administrative subpoena issued by the Long Island, NY District Office of the Drug Enforcement Administration (the “DEA”) requesting information related to compliance with certain recordkeeping and reporting requirements. On or about April 12, 2019 and May 28, 2019, the Company received grand jury subpoenas from the U.S. Attorney’s Office for the Eastern District of New York (the “USAO”) relating to similar topics concerning the Company’s suspicious order monitoring program and its compliance with the Controlled Substances Act. The Company is cooperating with the USAO in responding to the subpoenas and has entered civil and criminal tolling agreements with the USAO through approximately May 12, 2022. It is not possible to determine the exact outcome of these investigations at this time. On March 14, 2019, Amneal received a subpoena (the “Subpoena”) from an Assistant U.S. Attorney (“AUSA”) for the Southern District of Florida. The Subpoena requests information and documents generally related to the marketing, sale, and distribution of oxymorphone. The Company intends to cooperate with the AUSA regarding the Subpoena. However, no assurance can be given as to the timing or outcome of its underlying investigation. On October 7, 2019, Amneal received a subpoena from the New York State Department of Financial Services seeking documents and information related to sales of opioid products in the state of New York. The Company is cooperating with the request and providing responsive information. It is not possible to determine the exact outcome of this investigation at this time. Ranitidine Litigation The Company and its affiliates have been named as defendants, along with numerous other pharmaceutical manufacturers, wholesale distributors, and retail pharmacy chains, in In re Zantac/Ranitidine NDMA Litigation (MDL No. 2924), pending in the Southern District of Florida. Plaintiffs allege that defendants failed to disclose and/or concealed the alleged inherent presence of N-Nitrosodimethylamine (or “NDMA”) in brand-name Zantac® or generic ranitidine and the alleged associated risk of cancer. Consolidated groups of (a) personal injury plaintiffs, (b) economic loss/medical monitoring class action plaintiffs, and (c) third-party payor plaintiffs have each filed master complaints against brand and generic pharmaceutical manufacturers, distributors, retailers, and repackagers of ranitidine-containing products. The Company or its affiliates have been named in the three master complaints and approximately 313 personal injury short form complaints. On December 31, 2020, the Court dismissed in full the three master complaints against the generic manufacturers, including the Company and its affiliates, with leave to file amended complaints on certain claims relating to manufacturing, storage and transportation. Plaintiffs filed amended complaints in February 2021, and Defendants filed various motions to dismiss the amended complaints in March 2021. On July 8, 2021, the MDL dismissed all claims against the generic drug manufacturers, including the Company and its affiliates, without leave to file further amended complaints. Plaintiffs have appealed the MDL court’s dismissal to the 11th Circuit Court of Appeals, which has consolidated the appeals of the personal injury cases. On June 18, 2020, Amneal Pharmaceuticals LLC was named in a lawsuit filed in New Mexico brought by the New Mexico Attorney General alleging claims of public nuisance, negligence, and violations of consumer protection laws against various brand and generic manufacturers and store-brand distributors of Zantac®/Ranitidine. Plaintiff seeks unspecified compensatory and punitive damages, as well as abatement, medical monitoring, restitution and injunctive relief. The Company filed a motion to dismiss on May 17, 2021, and filed a notice of supplemental authority based on the MDL court’s July 2021 dismissal order. The Court denied the motion on August 17, 2021. The Company filed a motion to dismiss based on lack of personal jurisdiction on January 26, 2022. On November 12, 2020, Amneal Pharmaceuticals LLC was named in a public nuisance and consumer protection lawsuit filed in state court in Baltimore, Maryland, on behalf of the Mayor and City Council of Baltimore. Defendants removed the case to federal court and on April 1, 2021, the case was remanded to state court. On August 23, 2021, the Company filed a motion to dismiss, which was granted. On October 1, 2021, Amneal Pharmaceuticals, LLC, and Amneal Pharmaceuticals of New York, LLC, were named in a lawsuit filed in Pennsylvania state court along with 25 other defendants, including brand-name manufacturers, generic manufacturers, and one Pennsylvania-based pharmacy. The Complaint largely tracks the dismissed master personal injury complaint from the MDL, and was removed and subsequently transferred to the MDL on November 9, 2021. Metformin Litigation Amneal and AvKARE, Inc. were named as defendants, along with numerous other manufacturers, retail pharmacies, and wholesalers, in several putative class action lawsuits pending in the United States District Court for the District of New Jersey (“D.N.J.”), consolidated as In Re Metformin Marketing and Sales Practices Litigation (No. 2:20-cv-02324-MCA-MAH). The lawsuits all allege that defendants made and sold to putative class members generic metformin products that were “adulterated” or “contaminated” with NDMA. An economic loss complaint filed on behalf of consumers and third-party payors who purchased or paid or made reimbursements for metformin alleges that plaintiffs suffered economic losses in connection with their purchases or reimbursements due to the purported contamination. On May 20, 2021, the Court granted Defendants’ motion to dismiss the economic loss complaint, and Plaintiffs filed an amended complaint on June 21, 2021. Defendants again moved to dismiss, and the motion was fully briefed on October 18, 2021. Additionally, medical monitoring class action complaints were filed on behalf of consumers who consumed allegedly contaminated metformin allege “cellular damage, genetic harm, and/or are at an increased risk of developing cancer” and seek medical monitoring, including evaluation and treatment. These cases are currently stayed. On March 29, 2021, a plaintiff filed a complaint in the United States District Court for the Middle District of Alabama asserting claims against manufacturers of Valsartan, Losartan, and Metformin based on the alleged presence of nitrosamines in those products. The only allegations against Amneal concern Metformin. (Davis v. Camber Pharmaceuticals, Inc., et al., C.A. No. 2:21-00254 (M.D. Ala.) (the “Davis Action”)). On May 5, 2021, the JPML transferred the Davis Action into the In re: Valsartan, Losartan, and Irbesartan Products Liability Litigation multi-district litigation for pretrial proceedings. On October 29, 2021, three plaintiffs filed a complaint in the District Court of Douglas County, Nebraska asserting claims against Amneal based on the alleged presence of nitrosamines in metformin. On January 10, 2022, Amneal removed the case to the United States District Court for the District of Nebraska. (Conrad et al v. Amneal Pharmaceuticals, Inc., No. 22-cv-00011-BCB-SMB (D. Neb.)). Amneal’s response to the complaint is due March 3, 2022. Xyrem® (Sodium Oxybate) Antitrust Litigation Amneal has been named as a defendant, along with Jazz Pharmaceuticals, Inc. (“Jazz”) and numerous other manufacturers of generic versions of Jazz’s Xyrem® (sodium oxybate), in several putative class action lawsuits filed in the United States District Court for the Northern District of California and the United States District Court for the Southern District of New York, alleging that the generic manufacturers entered into anticompetitive agreements with Jazz in connection with settling patent litigation related to Xyrem®. Plaintiffs seek unspecified monetary damages and penalties as well as equitable relief, including disgorgement and restitution. On December 16, 2020, the JPML transferred the actions to the United States District Court for the Northern District of California for consolidated pretrial proceedings consolidated as In re Xyrem (Sodium Oxybate) Antitrust Litigation (No. 5:20-md-02966-LHK). Plaintiffs filed a consolidated amended class complaint in March 2021, which Defendants moved to dismiss. On August 13, 2021, the District Court granted in part and denied in part Defendants’ motion, dismissing the federal damages claims and a number of state-law claims, while permitting the remaining claims to proceed. Discovery is currently ongoing. Value Drug Company v. Takeda Pharmaceuticals U.S.A., Inc. On August 5, 2021, Value Drug Company filed a purported class action lawsuit in the United States District Court for the Eastern District of Pennsylvania against Takeda Pharmaceuticals U.S.A., Inc. (“Takeda”) and numerous other manufacturers of generic versions of Takeda’s Colcrys® (colchicine), including Amneal Pharmaceuticals LLC, alleging that the generic manufacturers conspired with Takeda to restrict output of generic Colcrys in order to maintain higher prices, in violation of the antitrust laws. The Company, along with the other defendants, moved to dismiss for failure to state a claim, and on December 28, 2021 the Court granted the motion in full, with leave to amend. On January 18, 2022 Plaintiff filed its amended complaint, making substantively the same antitrust allegations, but alleging that the violations were effectuated by either a single overarching conspiracy or a series of bilateral conspiracies. The Company intends to move to dismiss the amended complaint for failure to state a claim. Galeas v. Amneal Pharmaceuticals, Inc. On July 27, 2021, Cesy Galeas filed a purported class action lawsuit in the U.S. District Court for the Eastern District of New York against Amneal Pharmaceuticals, Inc., alleging that the payment schedule for certain workers violated New York Labor Law. Specifically, the purported class, which presently consists of one named plaintiff, contends that the Company paid the employees all owed wages, but did so bi-weekly, instead of weekly. The Company has not yet responded to the complaint, but it has notified the Court that it intends to file a motion to dismiss the claims on various grounds.
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Stockholders' Equity | Stockholders' Equity Class B-1 Stock During the year ended December 31, 2019, pursuant to the Company's certificate of incorporation, the Company converted all 12.3 million of its issued and outstanding shares of Class B-1 Common Stock to Class A Common Stock and such shares of Class B-1 Common Stock have been retired and may not be reissued by the Company. Voting Rights Holders of Class A Common Stock and Class B Common Stock are entitled to one vote for each share of stock held, except as required by law. Holders of Class A Common Stock and Class B Common Stock vote together as a single class on each matter submitted to a stockholder vote. Holders of Class A Common Stock and Class B Common Stock are not entitled to vote on any amendment to the Company's Charter that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote on such terms pursuant to the Company's Charter or law. Dividend Rights The holders of Class A Common Stock are entitled to receive dividends, if any, payable in cash, property, or securities of the Company, as may be declared by the Company's board of directors, out of funds legally available for the payment of dividends, subject to any preferential or other rights of the holders of any outstanding shares of preferred stock. The holders of Class B Common Stock will not be entitled to receive any dividends. Participation Rights Under the Company's Charter, the holders of Class A Common Stock and Class B Common Stock have no participation rights. However, the Company's Second Amended and Restated Stockholders Agreement dated as of December 31, 2017 (the “Stockholders Agreement”) provides that if the Company proposes to issue any securities, other than in certain issuances, the Members will have the right to purchase its pro rata share of such securities, based on the number of shares of common stock owned by the Members before such issuance. Issuance and Restrictions on Company Common Stock Pursuant to the Third Amended and Restated Limited Liability Company Agreement of Amneal dated May 4, 2018 (the “Limited Liability Company Agreement”), Amneal will issue to the Company an additional Amneal common unit for each additional share of Class A Common Stock issued by the Company. Additionally, pursuant to the Charter, shares of Class B Common Stock will be issued to the Members and their permitted transferees only to the extent necessary in certain circumstances to maintain a one-to-one ratio between the number of Amneal Common Units and the number of shares of Class B Common Stock held by such members. Shares of Class B Common Stock are transferable only for no consideration to the Company for automatic retirement or in accordance with the Stockholders Agreement and the Limited Liability Company Agreement. Liquidation Rights On the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of Class A Common Stock are entitled to share equally in all assets of the Company available for distribution among the stockholders of the Company after payment to all creditors and subject to any preferential or other rights of the holders of any outstanding shares of preferred stock. The holders of Class B Common stock are not entitled to share in such net assets. Redemption The Limited Liability Company Agreement provides that holders of Amneal Common Units may, from time to time, require the Company to redeem all or a portion of their interests for newly issued shares of Class A Common Stock on a one-for-one basis. Upon receipt of a redemption request, the Company may, instead, elect to effect an exchange of Amneal Common Units directly with the holder. Additionally, the Company may elect to settle any such redemption or exchange in shares of Class A Common stock or in cash. In the event of a cash settlement, the Company would issue new shares of Class A Common Stock and use the proceeds from the sale of these newly issued shares of Class A Common Stock to fund the cash settlement, which, in effect, limits the amount of the cash payments to the redeeming member. In connection with any redemption, the Company will receive a corresponding number of Amneal Common Units, increasing the Company's total ownership interest in Amneal. Additionally, an equivalent number of shares of Class B Common Stock will be surrendered and canceled. Preferred Stock Under the Company’s certificate of incorporation, the Company's Board of Directors has the authority to issue preferred stock and set its rights and preferences. As of December 31, 2021, no preferred stock had been issued. Non-Controlling Interests As discussed in Note 2. Summary of Significant Accounting Policies, the Company consolidates the financial statements of Amneal and its subsidiaries and records non-controlling interests for the portion of Amneal’s economic interests that is not held by the Company. Non-controlling interests are adjusted for capital transactions that impact the non-publicly held economic interests in Amneal. Under the terms of Amneal's limited liability company agreement, as amended, Amneal is obligated to make tax distributions to its members. For the years ended December 31, 2021, 2020, and 2019, tax distributions of $53 million, $3 million, and $0.1 million, respectively, were recorded as reductions of non-controlling interests. As of both December 31, 2021 and 2020, no liability was included in related-party payables for tax distributions. During September 2020, the Company made a $3 million payment to the non-controlling interest holders in one of Amneal's non-public subsidiaries, Gemini Laboratories, LLC, to distribute earnings of $1 million and acquire their ownership interests in the non-public subsidiary for $2 million. As discussed in Note 3. Acquisitions and Divestitures, the Company acquired a 98% interest in KSP on April 2, 2021. The sellers of KSP, a related party, hold the remaining interest. The Company will attribute 2% of the net income or loss of KSP to the non-controlling interests. Redeemable Non-Controlling Interests - AvKARE, LLC and R&S As discussed in Note 3. Acquisitions and Divestitures, the Company acquired a 65.1% interest in Rondo on January 31, 2020. The sellers of AvKARE, LLC and R&S hold the remaining 34.9% interest (“Rondo Class B Units”). Beginning on January 1, 2026, the holders of the Rondo Class B Units have the right (“Put Right”) to require the Company to acquire the Rondo Class B Units for a purchase price that is based on a multiple of Rondo’s earnings before income taxes, depreciation, and amortization (EBITDA) if certain financial targets and other conditions are met. Additionally, beginning on January 31, 2020, the Company has the right to acquire the Rondo Class B Units based on the same value and conditions as the Put Right. The Rondo Class B Units are also redeemable by the holders upon a change in control. Since the redemption of the Rondo Class B Units is outside of the Company's control, the units have been presented outside of stockholders' equity as redeemable non-controlling interests. Upon closing of the Acquisitions on January 31, 2020, these redeemable non-controlling interests were recorded at an estimated fair value of $11 million. The fair value of the redeemable non-controlling interests was estimated using the Monte-Carlo simulation approach under the option pricing framework, which considers the redemption rights of both the Company and the holders of the Rondo Class B Units. The Company will attribute 34.9% of the net income of Rondo to the redeemable non-controlling interests. The Company will also accrete the redeemable non-controlling interests to redemption value upon an event that makes redemption certain. For the years ended December 31, 2021 and 2020, tax distributions of $4 million and $0.5 million, respectively, were recorded as reductions of redeemable non-controlling interests. As of December 31, 2021 and 2020, there were no amounts due for tax distributions related to these redeemable non-controlling interests. Redeemable Non-Controlling Interests - Puniska As discussed in Note 3. Acquisitions and Divestitures, the Company acquired a 74% interest in Puniska on November 2, 2021. Also as discussed in Note 3. Acquisitions and Divestitures, upon approval of the transaction by the Government of India, the Company will pay $2 million for the remaining 26% of the equity interests in Puniska which are held by the sellers as of December 31, 2021. Since approval of the Government of India is outside of the Company’s control, upon closing of the Puniska Acquisition the equity interests of Puniska that the Company does not own have been presented outside of stockholders' equity as redeemable non-controlling interests at an estimated fair value of $2 million. The Company will attribute 26% of the net income or loss of Puniska to these non-controlling interests. The Company will also accrete the redeemable non-controlling interests to redemption value upon Government of India approval, which makes redemption certain. Changes in Accumulated Other Comprehensive Loss by Component (in thousands):
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Amneal Pharmaceuticals, Inc. 2018 Incentive Award Plan In May 2018, the Company adopted the Amneal Pharmaceuticals, Inc. 2018 Incentive Award Plan (“2018 Plan”) under which the Company may grant stock options, restricted stock units and other equity-based awards to employees and non-employee directors providing services to the Company and its subsidiaries. The stock option, RSU and MPRSU award grants are made in accordance with the Company’s 2018 Plan and are subject to forfeiture if the vesting conditions are not met. On May 5, 2020, the stockholders of the Company approved an amendment to the 2018 Plan which authorized an additional 14 million shares of Class A common stock available for issuance under the 2018 Plan. The aggregate number of shares of Class A Common Stock authorized for issuance pursuant to the Company's 2018 Plan is 37 million shares. As of December 31, 2021, the Company had 17,251,992 shares available for issuance under the 2018 Plan. The Company recognizes the grant date fair value of each option and share of restricted stock unit over its vesting period. Stock options and restricted stock unit awards are granted under the Company’s 2018 Plan and generally vest over a year period and, in the case of stock options, have a term of 10 years. The following table summarizes all of the Company's stock option activity for the years ended December 31, 2021, 2020, and 2019:
The intrinsic value of options exercised during the year ended December 31, 2021 was approximately $1.1 million. On November 14, 2019, the Company repriced 3.6 million of outstanding options by reducing the exercise price to $2.75. The repricing resulted in $0.9 million of incremental expense being incurred during 2019. The following table summarizes all of the Company's restricted stock unit activity for the years ended December 31, 2021, 2020, and 2019:
The table above includes 2,331,211 MPRSUs granted to executives during 2021. Vesting of these awards is contingent upon the Company’s achievement of stock price hurdles over the performance period starting March 1, 2021 and requires the employee’s continued employment or service through February 29, 2024. The MPRSUs cliff vest at the end of the three-year period and have a maximum potential to vest at 200% (4,662,422 shares) based on the Company's stock price performance. The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized straight-line over the vesting term. The estimated fair value per share of the MPRSUs ranged from $5.31 and $8.58 and was calculated using a Monte Carlo simulation model. 2,331,211 of these MPRSUs remain outstanding and unvested at December 31, 2021. The table above also includes 2,977,711 MPRSUs granted to executives during the first quarter of 2020. Vesting of these awards is contingent upon the Company’s achievement of stock price hurdles over the performance period starting March 1, 2020 and requires the employee’s continued employment or service through February 28, 2023. The MPRSUs cliff vest at the end of the three-year period and have a maximum potential to vest at 200% (5,955,422 shares) based on the Company's stock price performance. The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized straight-line over the vesting term. The estimated fair value per share of the MPRSUs ranged from $2.13 and $3.63 and was calculated using a Monte Carlo simulation model. 2,723,689 of these MPRSUs remained outstanding and unvested at December 31, 2021. In addition, the table above includes 519,754 MPRSUs granted to executives on March 1, 2019. Vesting of these awards was contingent upon the Company meeting certain total shareholder return ("TSR") levels as compared to a select peer group over the three years starting January 1, 2019 and required the employee’s continued employment or service through December 31, 2021. None of the MPRSUs granted in 2019 vested because the minimum TSR level was not met. The related share-based compensation expense was determined based on the estimated fair value of the underlying shares on the date of grant and was recognized straight-line over the vesting term. The estimated fair value per share of the MPRSUs was $14.67 and was calculated using a Monte Carlo simulation model. All of the MPRSUs granted in 2019 were canceled and none remained outstanding at December 31, 2021. As of December 31, 2021, the Company had total unrecognized stock-based compensation expense of $51 million related to all of its stock-based awards, which is expected to be recognized over a weighted average period of 1.7 years. The Company estimated the fair value of each stock option award on the grant date using the Black-Scholes option pricing model, wherein expected volatility is based on historical volatility of the publicly traded common stock of a peer group of companies. The expected term calculation is based on the "simplified" method described in SAB No. 107, Share-Based Payment, and SAB No. 110, Share-Based Payment, as the result of the simplified method provides a reasonable estimate in comparison to actual experience. The risk-free interest rate is based on the U.S. Treasury yield at the date of grant for an instrument with a maturity that is commensurate with the expected term of the stock options. The dividend yield of zero is based on the fact that the Company has never paid cash dividends on its common stock, and has no present intention to pay cash dividends. Options granted under each of the above plans generally vest over four years and have a term of 10 years. The following table presents the weighted-average assumptions used in the option pricing model for options granted under the 2018 Plan in the years ended December 31, 2019. There were no options granted in the years ended December 31, 2021 and December 31, 2020.
The amount of stock-based compensation expense recognized by the Company was as follows (in thousands):
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Related Party Transactions |
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Related Party Transactions | Related Party Transactions The Company has various business agreements with certain third-party companies in which there is some common ownership and/or management between those entities, on the one hand, and the Company, on the other hand. The Company has no direct ownership or management in any of such related party companies. The related party relationships that generated income and/or expense and the respective reporting periods are described below. Financing Lease - Related Party The Company had a financing lease with LAX Hotel, LLC for two buildings located in Long Island, New York, which are used as an integrated manufacturing and office facility. The Company leased these buildings from LAX Hotel, LLC from 2012 until January 2021. LAX Hotel, LLC had been controlled by a member of the Amneal Group, who also serves as observer on the Company's Board of Directors. As a result, this lease had been historically accounted for as a related party financing lease. During January 2021, LAX Hotel, LLC sold its interests in the leased buildings to an unrelated third party. Therefore, this lease is no longer a related party transaction, and the corresponding financing lease right-of-use asset and liability have been reclassified in the consolidated balance sheet as of December 31, 2021 to reflect this change. Related party lease costs and interest expense associated with this lease were $0.2 million and $0.4 million, respectively, for the year ended December 31, 2021, $2.6 million and $4.4 million, respectively, for the year ended December 31, 2020 and $2.6 million and $4.5 million, respectively, for the year ended December 31, 2019. For annual payments required under the terms of the non-cancelable lease agreement over the next five years and thereafter, refer to Note 12. Leases. Kanan, LLC Kanan, LLC (“Kanan”) is a real estate company which owns Amneal’s manufacturing facilities located at 65 Readington Road, Branchburg, New Jersey, 131 Chambers Brook Road, Branchburg, New Jersey and 1 New England Avenue, Piscataway, New Jersey. Certain executive officers of the Company beneficially own, through certain revocable trusts, equity securities of Kanan. In addition, they serve on the Board of Managers of Kanan. Amneal leases these facilities from Kanan under two separate triple-net lease agreements that expire in 2027 and 2031, respectively, at an annual rental cost of approximately $2 million combined, subject to CPI rent escalation adjustments as provided in the lease agreements. Rent expense paid to the related party for each of the years ended December 31, 2021, 2020 and 2019 was $2 million. Asana Biosciences, LLC Asana Biosciences, LLC (“Asana”) is an early stage drug discovery and research and development company focusing on several therapeutic areas, including oncology, pain and inflammation. Certain executive officers of the Company beneficially own, directly and through certain revocable or irrevocable trusts for the benefit of their immediate families, outstanding equity securities of Asana. In addition, they serve on the Board of Managers of Asana. From time to time, Amneal provides research and development services to Asana under a development and manufacturing agreement. The total amount of income earned from this arrangement for the year ended December 31, 2019 was $1 million. At December 31, 2019, $1 million was due from Asana. There was no income earned from this arrangement during the years ended December 31, 2021 and 2020, and there was no amount due from Asana at December 31, 2021 and 2020. Industrial Real Estate Holdings NY, LLC and Sutaria Family Realty, LLC Industrial Real Estate Holdings NY, LLC ("IRE") is a real estate management entity, which was the sub-landlord of Amneal’s leased manufacturing facility located at 75 Adams Avenue, Hauppauge, New York. IRE is controlled by a member of the Amneal Group who also serves as an observer on our Board of Directors. Effective June 1, 2020, the lease was assigned to the Company with the consent of the landlord, Sutaria Family Realty, LLC., which is also a related party because a member of Company management is a beneficial owner. Concurrently with the assignment of the lease, the Company exercised a renewal option for $0.1 million to extend the lease by 5 years until March 31, 2026. Monthly rent payments are $0.1 million and increase by 3% annually. Rent paid to the related parties for each of the years ended December 31, 2021, 2020 and 2019 was $1 million. Kashiv BioSciences LLC Kashiv is an independent contract development organization focused primarily on the development of 505(b)(2) NDA products. Amneal has various business agreements with Kashiv. Certain executive officers of the Company beneficially own, directly and through certain revocable or irrevocable trusts for the benefit of their immediate families, outstanding equity securities of Kashiv. In addition, they serve on the Board of Managers of Kashiv. On January 11, 2021, the Company and Kashiv entered into a definitive agreement for Amneal to acquire a 98% interest in KSP, a subsidiary of Kashiv focused on the development of complex generics, innovative drug delivery platforms and novel 505(b)(2) drugs. The acquisition closed on April 2, 2021. Certain of the contracts between Amneal and Kashiv were acquired in this transaction and have become transactions among Amneal’s consolidated subsidiaries subsequent to the transaction closing. Refer to Note 3. Acquisitions and Divestitures for further details on the KSP acquisition. Agreements with Kashiv Not Affected by the Acquisition of KSP The parties entered into a lease for parking spaces in Piscataway, NJ. The total amount of expense paid to Kashiv from this agreement for each of the years ended December 31, 2021, 2020 and 2019 was less than $0.1 million. Amneal also has various consulting arrangements with Kashiv to collaborate on the development and commercialization of certain generic pharmaceutical products. The total expenses associated with these arrangements for the years ended December 31, 2021 and 2020 were $0.6 million and $0.2 million, respectively (none for 2019). The table below includes the terms and expenses recognized for each of the product specific contracts with Kashiv.
(1) Kashiv granted Amneal an exclusive license, under its New Drug Application, to distribute and sell two bio-similar products in the U.S. Kashiv is responsible for development, regulatory filings, obtaining FDA approval, and manufacturing, and Amneal is responsible for marketing, selling and pricing activities. The term of the agreement is 10 years from the respective product’s launch date. The agreement provides for potential future milestone payments to Kashiv of (i) up to $21 million relating to regulatory approval, (ii) up to $43 million for successful delivery of commercial launch inventory, (iii) between $20 million and $50 million relating to number of competitors at launch for one product, and (iv) between $15 million and $68 million for the achievement of cumulative net sales for both products. The milestones are subject to certain performance conditions which may or may not be achieved, including FDA filing, FDA approval, launch activities and commercial sales volume objectives. In addition, the agreement provides for Amneal to pay a profit share equal to 50% of net profits, after considering manufacturing and marketing costs. (2) Amneal and Kashiv entered into a product development agreement for the development and commercialization of two generic peptide products, Ganirelix Acetate and Cetrorelix Acetate. Under the agreement, the intellectual property and ANDA for these products are owned by Amneal, and Kashiv is to receive a profit share for all sales of the products made by Amneal. In connection with the agreement, Amneal made an upfront payment for $1 million during August 2020. The agreement also provides for potential future milestone payments to Kashiv of (i) up to $2 million relating to development milestones, and (ii) up to $0.3 million relating to regulatory filings. The milestones are subject to certain performance conditions which may or may not be achieved, including FDA filings. In addition, Amneal is to pay $3 million of development fees to Kashiv as the development work is completed. Agreements with Kashiv Included in the Acquisition of KSP The following contracts between Amneal and Kashiv were acquired with KSP and have become transactions among Amneal’s consolidated subsidiaries subsequent to the transaction closing on April 2, 2021. The disclosures below relate to the historical agreements as related party transactions through April 2, 2021. Amneal had various development, commercialization and consulting arrangements with Kashiv to collaborate on the development and commercialization of certain generic pharmaceutical products. The total reimbursable expenses associated with these arrangements for the years ended December 31, 2021, 2020 and 2019, was $0.2 million, $0.2 million and $5 million, respectively. Kashiv receives a percentage of net profits with respect to Amneal’s sales of these products. The total profit share paid to Kashiv for the years ended December 31, 2021, 2020 and 2019 was $3 million, $11 million and $4 million, respectively. On February 20, 2020, the Company and Kashiv entered into a master services agreement covering certain services that Kashiv provides the Company for commercial product support related to EluRyng and other products, including Ranitidine and Nitrofurantoin. For the years ended December 31, 2021 and December 31, 2020, the Company recorded a combined $1 million and $6 million, respectively, to cost of goods sold and research and development related to compensation to Kashiv for services performed (none in 2019). The following table includes the expenses recognized for each of the product specific contracts with Kashiv prior to the acquisition of these contracts as part of the KSP Acquisition.
(1) Pursuant to a product development agreement, Amneal and Kashiv agreed to collaborate on the development and commercialization of Levothyroxine Sodium. Under the agreement, the intellectual property and ANDA for this product is owned by Amneal, and Kashiv received a profit share for all sales of the product made by Amneal. Amneal is precluded from selling the product made by Kashiv during the term of the license and supply agreement with Jerome Stevens Pharmaceuticals (refer to Note 5. Alliances and Collaboration). Under the terms of the amended agreement with Kashiv, Amneal paid $2 million in July 2019 and may be required to pay up to an additional $18 million upon certain regulatory milestones being met. (2) Amneal and Kashiv entered into a licensing agreement for the development and commercialization of Kashiv’s orphan drug K127 (pyridostigmine) for the treatment of Myasthenia Gravis. Under the terms of the agreement, Kashiv will be responsible for all development and clinical work required to secure Food and Drug Administration approval and Amneal will be responsible for filing the NDA and commercializing the product. The Company made an upfront payment of approximately $2 million to Kashiv in December 31, 2019, which was recorded in research and development, and Kashiv is eligible to receive development and regulatory milestones totaling approximately $17 million. Kashiv is also eligible to receive tiered royalties from the low double-digits to mid-teens on net sales of K127. (3) Amneal and Kashiv entered into a product development agreement for the development and commercialization of Posaconazole. Under this agreement, the intellectual property and ANDA for this product is owned by Amneal and Kashiv is to receive a profit share for all sales of the product made by Amneal. In connection with the agreement, Amneal paid an upfront amount of $0.3 million in May 2020 for execution of the agreement which was expensed in research and development. The agreement also provides for potential future milestone payments to Kashiv of (i) up $0.8 million relating to development milestones, (ii) up to $0.3 million relating to regulatory approval, and (iii) up to $1 million for the achievement of cumulative net sales. The milestones were subject to certain performance conditions which may or may not be achieved, including FDA filing, FDA approval and commercial sales volume objectives. As discussed in Note 3. Acquisitions and Divestitures, the purchase price for the KSP Acquisition included a contractually stated amount of deferred consideration of $30.5 million. As of December 31, 2021, deferred consideration of $30.5 million was recorded in related party payable-short term. The deferred consideration consists of $30 million which was paid on January 11, 2022, and $0.5 million, which is due on March 10, 2022. Additionally, as of December 31, 2021, a contingent consideration liability of $5.9 million associated with the KSP Acquisition was recorded in related party payable-long term. For the year ended December 31, 2021, the Company recorded $0.3 million of expenses for transition services associated with the KSP Acquisition provided by Kashiv. At December 31, 2021 and 2020, payables of approximately $0.3 million and $5 million, respectively, were due to Kashiv for these transactions. Additionally, as of December 31, 2021 and 2020, receivables of less than $0.1 million and $0.1 million were due from Kashiv, respectively. PharmaSophia, LLC PharmaSophia, LLC (“PharmaSophia”) is a joint venture formed by Nava Pharma, LLC (“Nava”) and Oakwood Laboratories, LLC for the purpose of developing certain products. Certain executive officers of the Company beneficially own, directly and through certain revocable or irrevocable trusts for the benefit of their immediate families, outstanding equity securities of Nava. Nava beneficially owns 50% of the outstanding equity securities of PharmaSophia. In addition, these executive officers also serve on the Board of Managers of PharmaSophia. Currently PharmaSophia is actively developing one injectable product. PharmaSophia and Nava are parties to a research and development agreement pursuant to which Nava provides research and development services to PharmaSophia. Nava subcontracted this obligation to Amneal, entering into a subcontract research and development services agreement pursuant to which Amneal provides research and development services to Nava in connection with the products being developed by PharmaSophia. The total amount of income earned from these agreements for the years ended December 31, 2021, 2020 and 2019 was $0.3 million, $0.5 million and $1 million, respectively. At December 31, 2021 and 2020, receivables of $1.1 million and $0.8 million, respectively, were due from the related party. Gemini Laboratories, LLC During September 2020, the Company made a $3 million payment to the non-controlling interest holders in one of Amneal's non-public subsidiaries, Gemini Laboratories, LLC, to distribute earnings of $1 million and acquire their ownership interests in the non-public subsidiary for $2 million. Fosun International Limited Fosun International Limited (“Fosun”) is a Chinese international conglomerate and investment company that is a shareholder of the Company. On June 6, 2019, the Company entered into a license and supply agreement with a subsidiary of Fosun, which is a Chinese pharmaceutical company. Under the terms of the agreement, the Company will hold the imported drug license required for pharmaceutical products manufactured outside of China and will supply Fosun with finished, packaged products for Fosun to then sell in the China market. Fosun will be responsible for obtaining regulatory approval in China and for shipping the product from Amneal’s facility to Fosun’s customers in China. In consideration for access to the Company's U.S. regulatory filings to support its China regulatory filings and for the supply of product, Fosun paid the Company a $1 million non-refundable fee, net of tax, in July 2019 and will be required to pay the Company $0.3 million for each of eight products upon the first commercial sale of each in China in addition to a supply price and a profit share. The Company has not recognized any revenue from this agreement. On August 12, 2021, the Company entered into an active pharmaceutical ingredient (“API”) co-development agreement with a subsidiary of Fosun. Under the terms of the agreement, the Company provided Fosun a license to manufacture and sell two pharmaceutical products outside of the United States. Fosun will be responsible for obtaining regulatory approval outside the United States. Fosun paid the Company a $0.2 million non-refundable fee which was recognized in 2021 as revenue and will be required to pay the Company $0.1 million for each of the two products upon the first commercial sale of each in China in addition to a profit share. Apace KY, LLC d/b/a Apace Packaging LLC Apace KY, LLC d/b/a Apace Packaging LLC (“Apace”) provides packaging solutions pursuant to an exclusive packaging agreement. Apace markets its services which include bottling and blistering for the pharmaceutical industry. A member of Company management beneficially owns outstanding equity securities of Apace. The total amount of expenses from this arrangement for the years ended December 31, 2021 and 2020 was $11 million and $12 million, respectively (none in 2019). At December 31, 2021 and December 31, 2020, payables of $1 million and $1 million, respectively, were due to Apace for packaging services. Additionally, at December 31, 2021 and December 31, 2020, receivables of less than $0.1 million and $1 million, respectively, were due from Apace relating to product recalls. Tracy Properties LLC R&S leases operating facilities, office and warehouse space from Tracy Properties LLC (“Tracy”). A member of Company management beneficially owns outstanding equity securities of Tracy. The total amount of expenses associated with this lease for both the years ended December 31, 2021 and 2020 was $0.5 million (none in 2019). AzaTech Pharma LLC R&S purchases inventory from AzaTech Pharma LLC (“AzaTech”) for resale. A member of Company management beneficially owns outstanding equity securities of AzaTech. The total amount of purchases from this arrangement for both the years ended December 31, 2021 and 2020 was $5 million (none in 2019). At December 31, 2021 and 2020, payables of $2 million and $1 million, respectively, were due to AzaTech for inventory purchases. AvPROP, LLC AvKARE LLC leases its operating facilities from AvPROP, LLC (“AvPROP”). A member of Company management beneficially owns outstanding equity securities of AvPROP. Rent expense associated with this lease for the years ended December 31, 2021 and 2020 was $0.2 million and $0.1 million, respectively (none in 2019). Tarsadia Investments, LLC Tarsadia Investments, LLC (“Tarsadia”) is a private investment firm that provides financial services and is a significant shareholder of the Company. A member of Amneal Group, and an observer to the Board, is the Chairman and Founder of Tarsadia. Another member of the Amneal Group, and a member of the Board, is a Managing Director of Tarsadia. Tarsadia offers capital and strategic support for companies with substantial growth potential primarily in the healthcare, financial services, real estate, and clean technology sectors. The Company entered into an agreement in which Tarsadia will provide financial consulting services. The services are not expected to have a material impact to the Company’s financial statements. Avtar Investments, LLC Avtar Investments, LLC (“Avtar”) is a private investment firm. Certain executive officers of the Company beneficially own, directly and through certain revocable or irrevocable trusts for the benefit of their immediate families, outstanding equity securities of Avtar. During April 2020, the Company entered into an agreement in which Avtar will provide consulting services. The total amount of consulting expense incurred for the years ended December 31, 2021 and 2020, respectively, was $0.4 million and $1 million (none in 2019). As of both December 31, 2021 and 2020, less than $0.1 million was due to Avtar. Zep Inc. Zep Inc. (“Zep”) is a producer, and distributor of maintenance and cleaning solutions for retail, food & beverage, industrial & institutional, and vehicle care customers. An executive officer of the Company serves as a director of Zep. During May 2020, AvKARE entered into an agreement to supply cleaning products to Zep. The amount of revenue recorded for the year ended December 31, 2020 was $0.6 million (none for the year ended December 31, 2021). As of December 31, 2020, $0.1 million was recorded in related party receivables (none at December 31, 2021). AvKARE Refer to Note. 3 Acquisitions and Divestitures and Note 22. Stockholders’ Equity for related party transactions associated with the Rondo Acquisitions. Puniska Refer to Note. 3 Acquisitions and Divestitures for related party transactions associated with the Puniska Acquisition. Tax Distributions Under the terms of the Limited Liability Company Agreement, Amneal is obligated to make tax distributions to its members, which are also holders of non-controlling interests in the Company. For further details, refer to Note 22. Stockholders' Equity. Additionally, under the terms of the limited liability company agreement between the Company and the holders of the Rondo Class B Units, Rondo is obligated to make tax distributions to those holders, subject to certain limitations as defined in the Rondo Credit Facility. For further details, refer to Note 22. Stockholders' Equity. Tax Indemnification – Rondo Acquisitions In accordance with the Rondo Equity Purchase Agreement, the Company will be indemnified by the sellers of AvKARE, LLC and R&S for $0.1 million of state taxes paid on behalf of the sellers for a tax period prior to the closing of the Rondo Acquisition. As a result, the Company recorded $0.1 million of related party receivables - short term as of December 31, 2021. Notes Payable – Related Party Certain holders of the Rondo Class B Units are also holders of the Sellers Notes and the Short-Term Sellers Note. For additional information, refer to Note 17. Debt.
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Employee Benefit Plans |
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Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company has voluntary defined contribution plans covering eligible employees in the United States which provide for a Company match. For the years ended December 31, 2021, 2020 and 2019, the Company made matching contributions of $9 million, $8 million and $7 million, respectively. The Company also has a deferred compensation plan for certain former executives and employees of Impax, some of whom are currently employed by the Company. In January 2019, the Company announced that it will no longer accept contributions from employees or make matching contributions for the deferred compensation plan. Deferred compensation liabilities are recorded at the value of the amount owed to the plan participants, with changes in value recognized as compensation expense. The calculation of the deferred compensation plan obligation is derived by reference to hypothetical investments selected by the participants and is included in accounts payable and accrued expenses and other long-term liabilities. Refer to Note 19. Fair Value Measurements for additional information.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company has three reportable segments: Generics, Specialty, and AvKARE. Generics Generics develops, manufactures and commercializes complex oral solids, injectables, ophthalmics, liquids, topicals, softgels, inhalation products and transdermals across a broad range of therapeutic categories. Generics’ retail and institutional portfolio contains approximately 250 product families, many of which represent difficult-to-manufacture products or products that have a high barrier-to-entry, such as oncologics, anti-infectives and supportive care products for healthcare providers. Specialty Specialty delivers proprietary medicines to the U.S. market. The Company offers a growing portfolio in core therapeutic categories including central nervous system disorders, endocrinology, parasitic infections and other therapeutic areas. The Company's specialty products are marketed through skilled specialty sales and marketing teams, who call on neurologists, movement disorder specialists, endocrinologists and primary care physicians in key markets throughout the U.S. Specialty also has a number of product candidates that are in varying stages of development. AvKARE AvKARE provides pharmaceuticals, medical and surgical products and services primarily to governmental agencies, primarily focused on serving the Department of Defense and the Department of Veterans Affairs. AvKARE is also a wholesale distributor of bottle and unit dose pharmaceuticals under the registered names of AvKARE and AvPAK, as well as medical and surgical products. AvKARE is also a packager and wholesale distributor of pharmaceuticals and vitamins to its retail and institutional customers who are located throughout the United States focused primarily on offering 340b-qualified entities products to provide consistency in care and pricing. Chief Operating Decision Makers The Company’s chief operating decision makers evaluate the financial performance of the Company’s segments based upon segment operating income (loss). Items below operating income (loss) are not reported by segment, since they are excluded from the measure of segment profitability reviewed by the Company’s chief operating decision maker. Additionally, general and administrative expenses, certain selling expenses, certain litigation settlements, and non-operating income and expenses are included in “Corporate and Other.” The Company does not report balance sheet information by segment since it is not reviewed by the Company’s chief operating decision makers. The tables below present segment information reconciled to total Company financial results, with segment operating income or loss, including gross profit less direct selling expenses, research and development expenses, and other operating expenses to the extent specifically identified by segment (in thousands):
(1)Operating results for the sale of Amneal products by AvKARE were included in Generics effective with the closing of the Rondo Acquisitions on January 31, 2020. (2)During the three months ended September 30, 2019, operating results for Oxymorphone were reclassified from Generics to Specialty, where it is sold as a non-promoted product. Prior period results have not been restated to reflect the reclassification.
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Other Assets |
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Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets Other assets are comprised of the following (in thousands):
The prior period balance related to financing lease right-of-use assets of $10 million was reclassified from other assets as of December 31, 2020 to the financing lease right-of-use assets balance sheet caption to conform to the current period presentation in the consolidated balance sheets.
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Property Losses and Associated Expenses, Net |
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Unusual or Infrequent Items, or Both [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Property Losses and Associated Expenses, Net | Property Losses and Associated Expenses, Net On September 1, 2021, Tropical Storm Ida brought extreme rainfall and flash flooding to New Jersey that caused damage to two of the Company’s facilities. Operations at these facilities were closed for the majority of September in order to assess the damage, make repairs and restore operations. As a result of the significant recovery effort and sufficient safety stock, the Company did not incur a material business disruption for the year ended December 31, 2021. The Company nevertheless concluded that all inventory on-hand at the time of the flooding was damaged and unsellable, and that a majority of the equipment was damaged beyond repair. In addition, the Company incurred significant costs to repair both facilities. Accordingly, the Company recorded $10 million of charges for property losses and associated expenses for the year ended December 31, 2021. The Company has insurance policies for property damage, inventory losses and business interruption. Insurance recoveries are recorded in the periods when it is probable they will be realized. During the year ended December 31, 2021, insurance recoveries of $5 million associated with property and equipment were received and recorded as a reduction of property losses and associated expenses. Property losses and associated expenses, net of insurance recoveries, for the year ended December 31, 2021 was comprised of the following (in thousands):
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Subsequent Event |
12 Months Ended |
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Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Baclofen Franchise Acquisition On December 30, 2021, the Company entered into an asset purchase agreement with certain entities affiliated with Saol International Limited (collectively, “Saol”), a private specialty pharmaceutical company, pursuant to which it agreed to acquire Saol’s baclofen franchise, including Lioresal®, LYVISPAH™, and a pipeline product under development (the “Saol Acquisition”). The Saol Acquisition expands the Company’s commercial institutional and specialty portfolio in neurology while adding commercial infrastructure in advance of its entry into the biosimilar institutional market. The transaction closed on February 9, 2022. Consideration for the Saol Acquisition includes $85 million, paid at closing with cash on hand, and contingent royalty payments based on annual net sales for certain acquired assets, beginning in 2023. Cash paid at closing included $1 million for inventory acquired in excess of the normalized level, as defined in the asset purchase agreement. The Company is evaluating the accounting for the transaction. As such, the Company is not able to disclose certain information relating to the acquisition, including the preliminary fair value of assets acquired and liabilities assumed.
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting Principles The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated.
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Principles of Consolidation | Principles of ConsolidationAlthough the Company has a minority economic interest in Amneal, it is Amneal’s sole managing member, having the sole voting power to make all of Amneal’s business decisions and controls its management. Therefore, the Company consolidates the financial statements of Amneal and its subsidiaries. The Company records non-controlling interests for the portion of Amneal’s economic interests that it does not hold. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company's management to make estimates and assumptions that affect the reported financial position at the date of the financial statements and the reported results of operations during the reporting period. Such estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The following are some, but not all, of such estimates: the determination of chargebacks, sales returns, rebates, billbacks, valuation of intangible and other assets acquired in business combinations, allowances for accounts receivable, accrued liabilities, contingent liabilities, initial and subsequent valuation of contingent consideration recognized in business combinations, stock-based compensation, valuation of inventory balances, the determination of useful lives for product rights and the assessment of expected cash flows used in evaluating goodwill and other long-lived assets for impairment. Actual results could differ from those estimates.
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Revenue Recognition | Revenue Recognition When assessing its revenue recognition, the Company performs the following five steps: (i) identify the contract 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 entity satisfies the performance obligation. The Company recognizes revenue when it transfers control of its products to customers, in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those products. For further details on the Company’s revenue recognition policies, refer to Note 4. Revenue Recognition.
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Stock-Based Compensation | Stock-Based Compensation The Company’s stock-based compensation consists of stock options, restricted stock units ("RSUs") and market performance-based restricted stock units (“MPRSUs”) awarded to employees and non-employee directors. Stock options are measured at their fair value on the grant date or date of modification, as applicable. RSUs, including MPRSUs, are measured at the stock price on the grant date or date of modification, as applicable. The Company recognizes compensation expense on a straight-line basis over the requisite service and/or performance period, as applicable. Forfeitures of awards are accounted for as a reduction in stock-based compensation expense in the period such awards are forfeited. The Company's policy is to issue new shares upon option exercises and the vesting of RSUs and MPRSUs.
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Contingent consideration | Contingent considerationBusiness acquisitions may include future payments that are contingent upon the occurrence of certain pharmaceutical regulatory milestones or net sales of pharmaceutical products. For acquisitions that are accounted for as a business combination, the obligations for such contingent consideration payments are recorded at fair value on the acquisition date. For contingent milestone payments, the Company uses a probability-weighted income approach utilizing an appropriate discount rate. For contingent tiered royalties on net sales, the Company uses a Monte Carlo simulation model. Contingent consideration liabilities are revalued to fair value at the end of each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in fair value of contingent consideration in the consolidated statements of operations. |
Foreign Currencies | Foreign CurrenciesThe Company has operations in the U.S., India, Ireland, and other foreign jurisdictions. Generally, the Company’s foreign operating subsidiaries’ functional currency is the local currency. The results of its non-U.S. dollar based operations are translated to U.S. dollars at the average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Translation adjustments are included in accumulated other comprehensive loss and non-controlling interests in the consolidated balance sheets and are included in comprehensive income (loss). Transaction gains and losses are included in net income (loss) in the Company’s consolidated statements of operations as a component of foreign exchange (loss) gain, net. Such foreign currency transaction gains and losses include fluctuations related to long term intercompany loans that are payable in the foreseeable future. Translation gains and losses on intercompany balances of a long-term investment nature are included in foreign currency translation adjustments in accumulated other comprehensive income (loss) and non-controlling interests, and comprehensive income (loss). |
Business Combinations | Business Combinations Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, the acquiring entity in a business combination records the assets acquired and liabilities assumed at the date of acquisition at their fair values. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill. Acquisition-related costs, primarily professional fees, are expensed as incurred.
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit and highly liquid investments with original maturities of three months or less. A portion of the Company’s cash flows are derived outside the U.S. As a result, the Company is subject to market risk associated with changes in foreign exchange rates. The Company maintains cash balances at both U.S.-based and international-based commercial banks. At various times during the year, cash balances in the U.S. may exceed amounts that are insured by the Federal Deposit Insurance Corporation.
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Restricted Cash | Restricted Cash At December 31, 2021 and 2020, respectively, the Company had restricted cash balances of $9 million and $6 million in its bank accounts primarily related to the purchase of certain land and equipment in India.
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Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company limits its credit risk with respect to accounts receivable by performing credit evaluations when deemed necessary. The Company does not require collateral to secure amounts owed to it by its customers. Trade accounts receivable are stated at their net realizable value. The allowance for credit losses reflects the best estimate of expected credit losses of the accounts receivable portfolio determined on the basis of historical experience, current information, and forecasts of future economic conditions. The Company determines its allowance methodology by pooling receivable balances at the customer level. The Company consider various factors, including its previous loss history, individual credit risk associated to each customer, and the current and future condition of the general economy. These credit risk factors are monitored on a quarterly basis and updated as necessary. To the extent that any individual debtor is identified whose credit quality has deteriorated, the Company establishes allowances based on the individual risk characteristics of such customer. The Company makes concerted efforts to collect all outstanding balances due from customers; however, account balances are charged off against the allowance when management believes it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to customers.
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Chargebacks Received From Manufacturers | Chargebacks Received from ManufacturersWhen a sale occurs on a contracted item, the difference between the cost the Company pays to the manufacturer of that item and the contract price that the end customer has with the manufacturer is rebated to the Company by the manufacturer as a chargeback. Chargebacks are recorded as a reduction to cost of sales and either a reduction in the amount due to the manufacturer (if there is a right of offset) or as a receivable from the manufacturer. |
Inventories | Inventories Inventories consist of finished goods held for sale, raw materials, and work in process. Inventories are stated at net realizable value, with cost determined using the first-in, first-out method. Adjustments for excess and obsolete inventories are established based upon historical experience and management’s assessment of current product demand. These assessments include inventory obsolescence based on its expiration date, damaged or rejected product, and slow-moving products.
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Property, Plant and Equipment | Upon retirement or disposal, the cost of the asset disposed and the accumulated depreciation are removed from the accounts, and any gain or loss is reflected as part of operating income (loss) in the period of disposal. Expenditures that significantly increase value or extend useful lives of property, plant, and equipment are capitalized, whereas those for normal maintenance and repairs are expensed. The Company capitalizes interest on borrowings during the construction period of major capital projects as part of the related asset and amortizes the capitalized interest into earnings over the related asset’s remaining useful life. |
Leases | Leases All significant lease arrangements are recognized as right-of-use (“ROU”) assets and lease liabilities at lease commencement. ROU assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of the future lease payments using the Company's incremental borrowing rate, which is assessed quarterly. Operating lease expense is recognized on a straight-line basis over the lease term. At each balance sheet date, operating and financing lease liabilities continue to represent the present value of the future payments. Financing lease ROU assets are expensed using the straight-line method, unless another basis is more representative of the pattern of economic benefit, to lease expense. Interest on financing lease liabilities is recognized in interest expense. Leases with an initial term of 12 months or less (short-term leases) are not recognized in the balance sheet and the related lease payments are recognized as incurred over the lease term. The Company separates lease and non-lease components. A portion of the Company's real estate leases are subject to periodic changes in the Consumer Price Index ("CPI"). The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred.
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In-Process Research and Development | In-Process Research and Development The fair value of in-process research and development (“IPR&D”) acquired in a business combination is determined based on the present value of each research project’s projected cash flows using an income approach. Revenues are estimated based on relevant market size and growth factors, expected industry trends, individual project life cycles and the life of each research project’s underlying marketability. In determining the fair value of each research project, expected cash flows are adjusted for certain risks of completion, including technical and regulatory risk. The value attributable to IPR&D projects at the time of acquisition is capitalized as an indefinite-lived intangible asset and tested for impairment until the project is completed or abandoned. Upon completion of the project, the indefinite-lived intangible asset is then accounted for as a finite-lived intangible asset and amortized over the estimated useful life of the asset based on the pattern in which the economic benefits are expected to be consumed or otherwise used up or, if that pattern is not readily determinable, on a straight-line basis. If the project is abandoned, the indefinite-lived intangible asset is charged to expense. Intangible assets with indefinite lives, including IPR&D, are tested for impairment if impairment indicators arise and, at a minimum, annually. However, an entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that an indefinite-lived intangible asset’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. The indefinite-lived intangible asset impairment test consists of a one-step analysis that compares the fair value of the intangible asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company considers many factors in evaluating whether the value of its intangible assets with indefinite lives may not be recoverable, including, but not limited to, expected growth rates, the cost of equity and debt capital, general economic conditions, the Company's outlook and market performance of the Company's industry and recent and forecasted financial performance.
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Goodwill | Goodwill Goodwill, which represents the excess of purchase price over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable. In order to test goodwill for impairment, an entity is permitted to first assess qualitative factors to determine whether a quantitative assessment of goodwill is necessary. The qualitative factors considered by the Company may include, but are not limited to, general economic conditions, the Company’s outlook, market performance of the Company’s industry and recent and forecasted financial performance. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that a reporting unit’s fair value is less than its carrying amount. Otherwise, no further impairment testing is required. If a quantitative assessment is required, the Company determines the fair value of its reporting unit using a combination of the income and market approaches. If the net book value of the reporting unit exceeds its fair value, the Company recognizes a goodwill impairment charge for the reporting unit equal to the lesser of (i) the total goodwill allocated to that reporting unit and (ii) the amount by which that reporting unit’s carrying amount exceeds its fair value. See Note 15. Goodwill and Other Intangible Assets, for further discussion of the Company's quantitative assessment of goodwill. Assumptions and estimates used in the evaluation of impairment may affect the carrying value of long-lived assets, which could result in impairment charges in future periods. Such assumptions include projections of future cash flows and the current fair value of the asset. Amortization of Intangible Assets with Finite Lives Intangible assets, other than indefinite-lived intangible assets, are amortized over the estimated useful life of the asset based on the pattern in which the economic benefits are expected to be consumed or otherwise used up or, if that pattern is not readily determinable, on a straight-line basis. The useful life is the period over which the assets are expected to contribute directly or indirectly to future cash flows. Intangible assets are not written-off in the period of acquisition unless they become impaired during that period. The Company regularly evaluates the remaining useful life of each intangible asset that is being amortized to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of the intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life.
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Impairment of Long-Lived Assets (Including Intangible Assets with Finite Lives) | Impairment of Long-Lived Assets (Including Intangible Assets with Finite Lives)The Company reviews its long-lived assets, including intangible assets with finite lives, for recoverability whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets and fair value which is generally an expected present value cash flow technique. Management’s policy in determining whether an impairment indicator exists comprises measurable operating performance criteria as well as other qualitative measures. |
Financial Instruments | Financial Instruments The Company minimizes its risks from interest fluctuations through its normal operating and financing activities and, when deemed appropriate through the use of derivative financial instruments. Derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. The Company does not use leveraged derivative financial instruments. Derivative financial instruments that qualify for hedge accounting must be designated and effective as a hedge of the identified risk exposure at the inception of the contract. Accordingly, changes in fair value of the derivative contract must be highly correlated with changes in fair value of the underlying hedged item at inception of the hedge and over the life of the hedge contract. All derivatives are recorded on the balance sheet as assets or liabilities and measured at fair value. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive loss, net of income taxes and subsequently amortized as an adjustment to interest expense over the period during which the hedged forecasted transaction affects earnings, which is when the Company recognizes interest expense on the hedged cash flows. Cash flows of such derivative financial instruments are classified consistent with the underlying hedged item. Highly effective hedging relationships that use interest rate swaps as the hedging instrument and that meet criteria under ASC 815, Derivatives and Hedging, may qualify for the “short-cut method” of assessing effectiveness. The short-cut method allows the Company to make the assumption of no ineffectiveness, which means that the change in fair value of the hedged item can be assumed to be equal to the change in fair value of the derivative. Unless critical terms change, no further evaluation of effectiveness is performed for these hedging relationships unless a critical term is changed. For a hedging relationship that does not qualify for the short-cut method, the Company measures its effectiveness using the “hypothetical derivative method”, in which the change in fair value of the hedged item must be measured separately from the change in fair value of the derivative. At inception and quarterly thereafter, the Company formally assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged item. The Company compares the change in the fair value of the actual interest rate derivative to the change in the fair value of a hypothetical interest rate derivative with critical terms that match the hedged interest rate payments. After the initial quantitative assessment, this analysis is performed on a qualitative basis and, if it is determined that the hedging relationship was and continues to be highly effective, no further analysis is required. All components of each derivative financial instrument's gain or loss are included in the assessment of hedge effectiveness. If it is determined that a derivative ceases to be a highly effective hedge, the Company discontinues hedge accounting and any deferred gains or losses related to a discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive income (loss) net of income taxes, unless it is probable that the forecasted transaction will not occur. If it is probable that the forecasted transaction will not occur by the originally specified time period, the Company discontinues hedge accounting, and any deferred gains or losses reported in accumulated other comprehensive income (loss) are classified into earnings immediately. The Company is subject to credit risk as a result of nonperformance by counterparties to the derivative agreements. Upon inception and quarterly thereafter, the Company makes judgments on each counterparty’s creditworthiness for nonperformance by counterparties.
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Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. ASC 740-10 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense.
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Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss) and all changes in stockholders’ equity (except those arising from transactions with stockholders) including foreign currency translation adjustments resulting from the consolidation of foreign subsidiaries’ financial statements and unrealized gains on cash flows hedges, net of income taxes.
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Research and Development/Intellectual Property Legal Development Expenses | Research and Development Research and development ("R&D") activities are expensed as incurred. R&D expenses primarily consist of direct and allocated expenses incurred with the process of formulation, clinical research, and validation associated with new product development. Upfront and milestone payments made to third parties in connection with R&D collaborations are expensed as incurred up to the point of regulatory approval or when there is no alternative future use. Intellectual Property Legal Development Expenses The Company expenses external intellectual property legal development expenses as incurred. These costs relate to legal challenges of innovator’s patents for invalidity or non-infringement, which are customary in the generic pharmaceutical industry, and are incurred predominately during development of a product and prior to regulatory approval. Associated costs include, but are not limited to, formulation assessments, patent challenge opinions and strategy, and litigation expenses to defend the intellectual property supporting the Company's regulatory filings.
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides elective amendments for entities that have contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), to expand and clarify the scope of Topic 848 to include derivative instruments on discounting transactions. The amendments in this ASU are effective in the same timeframe as ASU 2020-04. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements. Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities About Government Assistance, which requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. The new standard is effective for the Company on January 1, 2022 and only impacts annual financial statement footnote disclosures. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.
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Reclassification | Reclassification Prior period balances related to (i) financing lease right-of-use assets of $10 million formerly included in other assets, (ii) current portion of financing lease liabilities of $2 million formerly included in accounts payable and accrued expenses, and (iii) long-term lease liabilities of $2 million formerly included in other long-term liabilities as of December 31, 2020 have been reclassified to their respective balance sheet captions to conform to the current period presentation in the consolidated balance sheets.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property, Plant, and Equipment Estimated Useful Lives | Depreciation expense is computed primarily using the straight-line method over the estimated useful lives of the assets, which are as follows:
Property, plant, and equipment, net was comprised of the following (in thousands):
Depreciation recognized by the Company was as follows (in thousands):
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Acquisitions and Divestitures (Tables) |
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisition Pro Forma Data | The unaudited pro forma combined results of operations for the years ended December 31, 2021 and 2020 (assuming the closing of the Rondo Acquisitions occurred on January 1, 2019 and the closing of the KSP Acquisition occurred on January 1, 2020) are as follows (in thousands):
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Puniska Healthcare Pvt Ltd | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price, Net of Cash Acquired | The preliminary purchase price was calculated as follows (in thousands):
(1)Cash includes the payment made upon execution of the agreement. (2)Due to the short-term nature of the payable to the sellers, the principal amount approximates fair value.
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Schedule of Purchase Price Allocation | The following is a summary of the preliminary purchase price allocation for the Puniska Acquisition (in thousands):
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price, Net of Cash Acquired | The purchase price was calculated as follows (in thousands):
(1)The deferred consideration is stated at the fair value estimate of $30.1 million, which is the $30.5 million contractually stated amount less a $0.4 million discount. The deferred consideration consists of $30 million which was paid on January 11, 2022 and $0.5 million which is due on March 10, 2022. As the deferred consideration is non-interest bearing, the Company, using guideline companies and market borrowings with comparable risk profiles, discounted the deferred consideration at 1.7% over the period from April 2, 2021 to the maturity dates, for a fair value of $30.1 million on the date of acquisition. This discount will be amortized to interest expense over the life of the deferred consideration utilizing the effective interest rate method. (2)Kashiv is eligible to receive up to an additional $8 million in contingent payments upon the achievement of certain regulatory milestones and potential royalty payments from high single-digits to mid double-digits, depending on the amount of aggregate annual net sales for certain future pharmaceutical products. The estimated fair value of contingent consideration on the acquisition date was $6 million and was based on significant Level 3 inputs that were not observable in the market. Key assumptions included the discount rate, probability of achievement of milestones, projected year of payments and expected net product sales. Refer to Note 19. Fair Value Measurements, for additional information on the methodology and determination of this liability. (3)Represents trade accounts payable due to KSP that were effectively settled upon closing of the KSP Acquisition.
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Schedule of Purchase Price Allocation | The following is a summary of the purchase price allocation for the KSP Acquisition (in thousands):
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Schedule of Acquired Intangible Assets | The acquired intangible assets are being amortized over their estimated useful lives as follows (in thousands):
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Schedule of Purchase Price, Net of Cash Acquired | The purchase price was calculated as follows (in thousands):
(1)In accordance with ASC 805, Business Combinations, all consideration transferred was measured at its acquisition-date fair value. The Sellers Notes were stated at the fair value estimate of $35 million, which is the $44 million aggregate principal amount less a $9 million discount. The fair value of the Sellers Notes was estimated using the Monte-Carlo simulation approach under the option pricing framework. (2)Represents trade accounts receivable from R&S that was effectively settled upon closing of the Rondo Acquisitions. (3)Represents the principal amount due on the Short-Term Seller Note, which approximates fair value. (4)Represents a working capital adjustment pursuant to the terms of the purchase agreement. The entire amount was received in cash by the Company in September 2020.
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Schedule of Purchase Price Allocation | The following is a summary of the purchase price allocation for the Rondo Acquisitions (in thousands):
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Schedule of Acquired Intangible Assets | The acquired intangible assets are being amortized over their estimated useful lives as follows (in thousands):
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Major Customers by Reporting Segments |
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Schedule of Disaggregated Revenue | The Company's significant therapeutic classes for each of its reportable segments, as determined based on net revenue for each of the years ended December 31, 2021, 2020 and 2019 are set forth below (in thousands):
(1)Antiviral net revenue for the year ended December 31, 2021 decreased from the prior year, primarily due to a decline in Oseltamivir (generic Tamiflu®) sales from lower demand and increased returns activity above historical levels as a result of decreased influenza activity during the COVID-19 pandemic. (2)During the three months ended September 30, 2019, net revenue and operating results for Oxymorphone were reclassified from Generics to Specialty, where it is sold as a non-promoted product. Prior period results have not been restated to reflect the reclassification. (3)The AvKARE segment consists of the businesses acquired in the Rondo Acquisitions on January 31, 2020. Net revenue for the year ended December 31, 2020 represents eleven months of activity.
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Schedule of Major Categories of Sales-Related Deductions | A rollforward of the major categories of sales-related deductions for the years ended December 31, 2021, 2020 and 2019 is as follows (in thousands):
The following table summarizes the changes in the Company's valuation allowance on deferred tax assets (in thousands):
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Restructuring and Other Charges (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Asset-related Costs and Charges By Segment | The following table sets forth the components of the Company's employee and asset-related restructuring charges (credit) and other employee severance charges for the years ended December 31, 2021, 2020 and 2019 (in thousands):
(1)Employee restructuring separation charges (credit) were associated with benefits provided pursuant to the Company's severance programs for employees impacted by the plans at the Company's Hauppauge, NY, Hayward, CA and other facilities. (2)For the year ended December 31, 2020, the asset-related credit was primarily associated with the contractual cancellation of an asset retirement obligation related to a lease in Hayward, CA that was terminated during August 2020. For the year ended December 31, 2019, asset-related charges were primarily associated with the impairment of property, plant and equipment and right of use asset in connection with the planned closing of the Company’s Hauppauge, NY facility. (3)For the years ended December 31, 2021, 2020 and 2019, other employee severance charges were primarily associated with the cost of benefits for former executives and employees. The charges (credit) related to restructuring impacted segment earnings as follows (in thousands):
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Schedule of Restructuring Reserve | The following table shows the change in the employee separation-related liability, included in accounts payable and accrued expenses, associated with the plan to cease manufacturing at its facility located in Hauppauge, NY (in thousands):
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of (Loss) Income Before Income Taxes | The components of the Company's income (loss) before income taxes were as follows (in thousands):
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Schedule of Provision for (Benefit From) Income Tax Expense | The provision for (benefit from) income taxes was comprised of the following (in thousands):
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Schedule of Effective Income Tax Rate | The effective tax rate was as follows:
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Schedule of Major Categories of Sales-Related Deductions | A rollforward of the major categories of sales-related deductions for the years ended December 31, 2021, 2020 and 2019 is as follows (in thousands):
The following table summarizes the changes in the Company's valuation allowance on deferred tax assets (in thousands):
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Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to deferred taxes were as follows (in thousands):
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Schedule of Changes in Unrecognized Tax Benefits | A rollforward of unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019 is as follows (in thousands):
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Earnings (Loss) per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A Common Stock and Class B-1 Common Stock (in thousands, except per share amounts):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents potentially dilutive securities excluded from the computations of diluted earnings (loss) per share of Class A Common Stock and Class B-1 Common Stock (in thousands).
(1)Excluded from the computation of diluted earnings per share of Class A Common Stock for the years ended December 31, 2021 and December 31, 2020 because the exercise price of the stock options exceeded the average market price of the Class A Common Stock during the period (out-of-the-money). (2)Excluded from the computation of diluted earnings per share of Class A Common Stock for the years ended December 31, 2021 and December 31, 2020 because the performance vesting conditions were not met. (3)Shares of Class B Common Stock are considered potentially dilutive shares of Class A and Class B-1 Common Stock. Shares of Class B Common Stock have been excluded from the computations of diluted earnings (loss) per share of Class A and Class B-1 Common Stock for each of the years ended December 31, 2021, 2020 and 2019 because the effect of their inclusion would have been anti-dilutive under the if-converted method. As noted above, the weighted-average shares for the year ended December 31, 2021 do not include Class B-1 Common Stock. (4)Excluded from the computation of diluted loss per share of Class A Common Stock and Class B-1 Common Stock for the years ended December 31, 2019 because the effect of their inclusion would have been anti-dilutive since there was a net loss attributable to the Company for the year ended December 31, 2019. As noted above, the weighted-average shares for the years ended December 31, 2021 and 2020 do not include Class B-1 Common Stock.
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Trade Accounts Receivable, Net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Trade Accounts Receivable, Net | Trade accounts receivable, net is comprised of the following (in thousands):
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Inventories (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Inventories | Inventories are comprised of the following (in thousands):
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Lease Costs / Supplemental Cash Flow Information | The components of total lease costs were as follows (in thousands):
(1)Includes variable and short-term lease costs. Supplemental cash flow information related to leases was as follows (in thousands):
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Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to the Company's leases was as follows (in thousands):
(1) As noted in Note 2. Summary of Significant Accounting Policies, prior period balances related to (i) financing lease right-of-use assets, (ii) current portion of financing lease liabilities, and (iii) long-term financing lease liabilities as of December 31, 2020 have been reclassified to their respective balance sheet captions to conform to the current period presentation in the consolidated balance sheet and the supplemental balance sheet information above. (2) Refer to Note 24. Related Party Transactions, for additional details.
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Schedule of Lease Term and Discount Rate Information | The table below reflects the weighted average remaining lease term and weighted average discount rate for the Company's operating and finance leases:
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Schedule of Operating Lease Maturities | Maturities of lease liabilities as of December 31, 2021 were as follow (in thousands):
Maturities of lease liabilities as of December 31, 2020 were as follows (in thousands):
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Schedule of Finance Lease Maturities | Maturities of lease liabilities as of December 31, 2021 were as follow (in thousands):
Maturities of lease liabilities as of December 31, 2020 were as follows (in thousands):
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Prepaid Expenses and Other Current Assets (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets are comprised of the following (in thousands):
(1)As discussed in Note 21. Commitments and Contingencies, the Company recorded receivables from insurers of $33 million and $6 million as of December 31, 2021 and 2020, respectively, associated with an insured securities class action lawsuit. (2)When a sale occurs on a contract item, the difference between the cost paid to the manufacturer by the Company and the contract cost that the end customer has with the manufacturer is rebated back to the Company by the manufacturer. The Company establishes a chargeback (rebate) receivable and a reduction to cost of goods sold in the same period as the related sale.
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Property, Plant, and Equipment, Net (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property, Plant, and Equipment Estimated Useful Lives | Depreciation expense is computed primarily using the straight-line method over the estimated useful lives of the assets, which are as follows:
Property, plant, and equipment, net was comprised of the following (in thousands):
Depreciation recognized by the Company was as follows (in thousands):
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The changes in goodwill for the years ended December 31, 2021 and 2020 were as follows (in thousands):
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Schedule of Finite-Lived Intangible Assets | Intangible assets were comprised of the following (in thousands):
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Finite-lived Intangible Assets Amortization Expense | Amortization expense related to intangible assets recognized was as follows (in thousands):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table presents future amortization expense for the next five years and thereafter, excluding $405 million of IPR&D intangible assets (in thousands).
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Accounts Payable and Accrued Expenses (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses were comprised of the following (in thousands):
(1)Refer to Note 4. Revenue Recognition for additional information. (2)Refer to Note 21. Commitments and Contingencies for additional information.
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Debt (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | The following is a summary of the Company's total indebtedness (in thousands):
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Other Long-Term Liabilities (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Long-Term Liabilities | Other long-term liabilities were comprised of the following (in thousands):
(1) Refer to Note 19. Fair Value Measurements and Note 20. Financial Instruments for information about the Company’s interest rate swap. (2) Includes $12 million of long-term deferred compensation plan liabilities (refer to Note 19. Fair Value Measurements) and $8 million of long-term employee benefits for the Company’s international employees. (3) As noted in Note 2. Summary of Significant Accounting Policies and Note 12. Leases, the prior period balance of $2 million related to long-term financing lease liabilities as of December 31, 2020 has been reclassified to its own balance sheet caption to conform to the current period presentation in the consolidated balance sheet.
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table sets forth the Company’s financial assets and liabilities that were measured at fair value on a recurring basis (in thousands):
(1)The fair value measurement of the Company’s interest rate swap classified within Level 2 of the fair value hierarchy is a model-derived valuation as of a given date in which all significant inputs are observable in active markets including certain financial information and certain assumptions regarding past, present, and future market conditions. Refer to Note 20. Financial Instruments for information about the Company’s interest rate swap. (2)As of December 31, 2021 and 2020, deferred compensation plan liabilities of $2 million and $12 million were recorded in current and non-current liabilities, respectively. These liabilities are recorded at the value of the amount owed to the plan participants, with changes in value recognized as compensation expense. The calculation of the deferred compensation plan obligation is derived from observable market data by reference to hypothetical investments selected by the participants. (3)The fair value measurement of contingent consideration liability has been classified as a Level 3 recurring liability as its valuation requires judgment and estimation of factors that are not currently observable in the market. If different assumptions were used for various inputs, the estimated fair value could be higher or lower than what the Company determined. As of December 31, 2021, the contingent consideration liability of $6 million was recorded within related party payable-long term. Refer to Note 3. Acquisitions and Divestitures for additional information related to the KSP Acquisition.
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Reconciliation of Contingent Consideration Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The following table provides a reconciliation of the contingent consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) through December 31, 2021 (in thousands):
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Significant Inputs Used in Fair Value Measurements | The following table summarizes the significant unobservable inputs used in the fair value measurement of our contingent consideration liabilities as of December 31, 2021:
(1) Unobservable inputs were weighted by the relative fair value of each product candidate acquired.
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Financial Instruments (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Values of Derivative Instruments in Consolidated Balance Sheets | A summary of the fair values of derivative instruments in the consolidated balance sheets was as follows (in thousands):
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Stockholders' Equity (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Accumulated Other Comprehensive Loss by Component | Changes in Accumulated Other Comprehensive Loss by Component (in thousands):
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Activity | The following table summarizes all of the Company's stock option activity for the years ended December 31, 2021, 2020, and 2019:
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Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes all of the Company's restricted stock unit activity for the years ended December 31, 2021, 2020, and 2019:
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Schedule of Weighted Average Assumptions Used in the Option Pricing Model | The following table presents the weighted-average assumptions used in the option pricing model for options granted under the 2018 Plan in the years ended December 31, 2019. There were no options granted in the years ended December 31, 2021 and December 31, 2020.
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Schedule of Employee Service Share-based Compensation | The amount of stock-based compensation expense recognized by the Company was as follows (in thousands):
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Related Party Transactions (Tables) |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The table below includes the terms and expenses recognized for each of the product specific contracts with Kashiv.
(1) Kashiv granted Amneal an exclusive license, under its New Drug Application, to distribute and sell two bio-similar products in the U.S. Kashiv is responsible for development, regulatory filings, obtaining FDA approval, and manufacturing, and Amneal is responsible for marketing, selling and pricing activities. The term of the agreement is 10 years from the respective product’s launch date. The agreement provides for potential future milestone payments to Kashiv of (i) up to $21 million relating to regulatory approval, (ii) up to $43 million for successful delivery of commercial launch inventory, (iii) between $20 million and $50 million relating to number of competitors at launch for one product, and (iv) between $15 million and $68 million for the achievement of cumulative net sales for both products. The milestones are subject to certain performance conditions which may or may not be achieved, including FDA filing, FDA approval, launch activities and commercial sales volume objectives. In addition, the agreement provides for Amneal to pay a profit share equal to 50% of net profits, after considering manufacturing and marketing costs. (2) Amneal and Kashiv entered into a product development agreement for the development and commercialization of two generic peptide products, Ganirelix Acetate and Cetrorelix Acetate. Under the agreement, the intellectual property and ANDA for these products are owned by Amneal, and Kashiv is to receive a profit share for all sales of the products made by Amneal. In connection with the agreement, Amneal made an upfront payment for $1 million during August 2020. The agreement also provides for potential future milestone payments to Kashiv of (i) up to $2 million relating to development milestones, and (ii) up to $0.3 million relating to regulatory filings. The milestones are subject to certain performance conditions which may or may not be achieved, including FDA filings. In addition, Amneal is to pay $3 million of development fees to Kashiv as the development work is completed. The following table includes the expenses recognized for each of the product specific contracts with Kashiv prior to the acquisition of these contracts as part of the KSP Acquisition.
(1) Pursuant to a product development agreement, Amneal and Kashiv agreed to collaborate on the development and commercialization of Levothyroxine Sodium. Under the agreement, the intellectual property and ANDA for this product is owned by Amneal, and Kashiv received a profit share for all sales of the product made by Amneal. Amneal is precluded from selling the product made by Kashiv during the term of the license and supply agreement with Jerome Stevens Pharmaceuticals (refer to Note 5. Alliances and Collaboration). Under the terms of the amended agreement with Kashiv, Amneal paid $2 million in July 2019 and may be required to pay up to an additional $18 million upon certain regulatory milestones being met. (2) Amneal and Kashiv entered into a licensing agreement for the development and commercialization of Kashiv’s orphan drug K127 (pyridostigmine) for the treatment of Myasthenia Gravis. Under the terms of the agreement, Kashiv will be responsible for all development and clinical work required to secure Food and Drug Administration approval and Amneal will be responsible for filing the NDA and commercializing the product. The Company made an upfront payment of approximately $2 million to Kashiv in December 31, 2019, which was recorded in research and development, and Kashiv is eligible to receive development and regulatory milestones totaling approximately $17 million. Kashiv is also eligible to receive tiered royalties from the low double-digits to mid-teens on net sales of K127. (3) Amneal and Kashiv entered into a product development agreement for the development and commercialization of Posaconazole. Under this agreement, the intellectual property and ANDA for this product is owned by Amneal and Kashiv is to receive a profit share for all sales of the product made by Amneal. In connection with the agreement, Amneal paid an upfront amount of $0.3 million in May 2020 for execution of the agreement which was expensed in research and development. The agreement also provides for potential future milestone payments to Kashiv of (i) up $0.8 million relating to development milestones, (ii) up to $0.3 million relating to regulatory approval, and (iii) up to $1 million for the achievement of cumulative net sales. The milestones were subject to certain performance conditions which may or may not be achieved, including FDA filing, FDA approval and commercial sales volume objectives.
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The tables below present segment information reconciled to total Company financial results, with segment operating income or loss, including gross profit less direct selling expenses, research and development expenses, and other operating expenses to the extent specifically identified by segment (in thousands):
(1)Operating results for the sale of Amneal products by AvKARE were included in Generics effective with the closing of the Rondo Acquisitions on January 31, 2020. (2)During the three months ended September 30, 2019, operating results for Oxymorphone were reclassified from Generics to Specialty, where it is sold as a non-promoted product. Prior period results have not been restated to reflect the reclassification.
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Other Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | Other assets are comprised of the following (in thousands):
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Property Losses and Associated Expenses, Net (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
Unusual or Infrequent Items, or Both [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property Losses and Associated Expenses | Property losses and associated expenses, net of insurance recoveries, for the year ended December 31, 2021 was comprised of the following (in thousands):
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Nature of Operations - Additional Information (Details) - Amneal Group |
Dec. 31, 2021 |
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Class of Stock [Line Items] | |
Ownership percentage by parent | 49.60% |
Amneal Group | |
Class of Stock [Line Items] | |
Ownership percentage by noncontrolling owners | 50.40% |
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Restricted cash | $ 8,949 | $ 5,743 | $ 1,625 |
Cost of goods sold | 1,302,004 | 1,329,551 | 1,147,214 |
Financing lease right-of-use assets | 64,475 | 68,217 | |
Other Assets | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Financing lease right-of-use assets | 10,000 | ||
Accounts Payable and Accrued Expenses | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Current portion of financing lease liabilities | 2,000 | ||
Other long-term liabilities | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Long-term lease liabilities | 2,000 | ||
Shipping Costs | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Cost of goods sold | $ 18,000 | $ 17,000 | $ 15,000 |
Summary of Significant Accounting Policies - Schedule of Property, Plant and Equipment Estimated Useful Lives (Details) |
12 Months Ended |
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Dec. 31, 2021 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 30 years |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 7 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | Shorter of asset's useful life or remaining life of lease |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 10 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Acquisitions and Divestitures - Pro Forma (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Business Combination and Asset Acquisition [Abstract] | ||
Net revenue | $ 2,093,861 | $ 2,023,609 |
Net income | 22,523 | 54,083 |
Net income attributable to Amneal Pharmaceuticals, Inc. | $ 11,802 | $ 80,643 |
Revenue Recognition - Concentration of Revenue (Details) - Revenue from Contract with Customer Benchmark - Customer Concentration Risk |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Customer A | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 24.00% | 23.00% | 20.00% |
Customer B | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 21.00% | 23.00% | 26.00% |
Customer C | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 20.00% | 17.00% | 19.00% |
Restructuring and Other Charges - Additional Information (Details) - New York Manufacturing And New Jersey Packaging Facilities - employee |
12 Months Ended | |
---|---|---|
Jul. 10, 2019 |
Dec. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | ||
Headcount reduction | 280 | |
Minimum | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected reduction to headcount | 300 | |
Maximum | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected reduction to headcount | 350 |
Restructuring and Other Charges - Restructuring Rollforward (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Restructuring Reserve [Roll Forward] | |||
Expense | $ (1,857) | $ (2,398) | $ (34,345) |
Employee Restructuring | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 1,592 | ||
Expense | (425) | 119 | $ (11,121) |
Payments | 0 | ||
Ending balance | $ 2,017 | $ 1,592 |
Government Grants - Additional Information (Details) $ in Millions, ₨ in Billions |
1 Months Ended | |
---|---|---|
Nov. 30, 2021
USD ($)
company
|
Dec. 31, 2021
INR (₨)
|
|
Receivables [Abstract] | ||
Number of companies | 55 | |
Grants receivable | $ 134 | ₨ 10.0 |
Government grant eligible term | 6 years |
Income Taxes - Components of (Loss) Income Before Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Operating Loss Carryforwards [Line Items] | |||
Total income (loss) before income taxes | $ 31,366 | $ (35,780) | $ (220,242) |
United States | |||
Operating Loss Carryforwards [Line Items] | |||
Total income (loss) before income taxes | (10,540) | (99,966) | (291,608) |
International | |||
Operating Loss Carryforwards [Line Items] | |||
Total income (loss) before income taxes | $ 41,906 | $ 64,186 | $ 71,366 |
Income Taxes - Provision for (Benefit From) Income Tax Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Current: | |||
Domestic | $ 1,311 | $ (113,754) | $ (2,760) |
Foreign | 9,885 | 9,396 | 14,375 |
Total current income tax | 11,196 | (104,358) | 11,615 |
Deferred: | |||
Domestic | 0 | 0 | 365,546 |
Foreign | 0 | 0 | 6,170 |
Total deferred income tax | 0 | 0 | 371,716 |
Total provision for (benefit from) income tax | $ 11,196 | $ (104,358) | $ 383,331 |
Income Taxes - Effective Income Tax Rate (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||
Federal income tax at the statutory rate | 21.00% | 21.00% | 21.00% |
State income tax, net of federal benefit | 4.20% | (2.00%) | (15.10%) |
Income not subject to tax (losses for which no benefit has been recognized) | 6.40% | (29.80%) | (25.80%) |
Foreign rate differential | 17.30% | (7.10%) | (5.50%) |
Permanent book/tax differences | 4.80% | 0.00% | 0.00% |
TRA revaluation | 0.00% | 0.00% | 18.40% |
CARES Act | 0.00% | 139.90% | 0.00% |
Valuation allowance | (13.50%) | 163.20% | (168.20%) |
Other | (4.50%) | 6.50% | 1.20% |
Effective income tax rate | 35.70% | 291.70% | (174.00%) |
Income Taxes - Deferred Tax Assets, Changes in Valuation Allowance (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Deferred Tax Assets, Valuation Allowance [Roll Forward] | |||
Balance at the beginning of the period | $ 422,812 | $ 470,193 | $ 41,235 |
(Decrease) increase due to net operating losses and temporary differences | (10,828) | (54,971) | 424,692 |
Increase due to stock-based compensation | 5,513 | 0 | 0 |
Increase (decrease) recorded against additional paid-in capital | 2,842 | (1,631) | 4,266 |
(Decrease) increase recorded against other comprehensive income | (3,751) | 9,221 | 0 |
Balance at the end of the period | $ 416,588 | $ 422,812 | $ 470,193 |
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Deferred tax assets: | ||||
Partnership interest in Amneal | $ 200,872 | $ 212,402 | ||
Projected imputed interest on TRA | 25,615 | 25,539 | ||
Net operating loss carryforward | 73,861 | 77,255 | ||
IRC Section 163(j) interest carryforward | 46,407 | 45,425 | ||
Capitalized costs | 1,300 | 1,502 | ||
Accrued expenses | 498 | 410 | ||
Stock-based compensation | 5,513 | 0 | ||
Intangible assets | 28,380 | 28,400 | ||
Tax credits and other | 34,142 | 31,879 | ||
Total deferred tax assets | 416,588 | 422,812 | ||
Valuation allowance | (416,588) | (422,812) | $ (470,193) | $ (41,235) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at the beginning of the period | $ 5,368 | $ 6,176 | $ 7,206 |
Gross change for current period positions | 131 | 125 | 83 |
Gross change for prior period positions | 443 | ||
Gross change for prior period positions | (10) | (732) | |
Decrease due to settlements and payments | 0 | (1,376) | (381) |
Unrecognized tax benefits at the end of the period | $ 5,489 | $ 5,368 | $ 6,176 |
Earnings (Loss) per Share - Securities Excluded from Diluted Earnings per Share Computation (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Class B Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities excluded from earnings per share (in shares) | 152,117 | 152,117 | 152,117 |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities excluded from earnings per share (in shares) | 347 | 671 | 6,177 |
Restricted Stock Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities excluded from earnings per share (in shares) | 0 | 0 | 2,478 |
Performance Stock Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities excluded from earnings per share (in shares) | 5,055 | 2,973 | 159 |
Trade Accounts Receivable, Net - Schedule of Trade Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Receivables [Abstract] | ||
Gross accounts receivable | $ 1,191,792 | $ 1,291,785 |
Allowance for credit losses | (1,665) | (1,396) |
Contract charge-backs and sales volume allowances | (503,902) | (628,804) |
Cash discount allowances | (23,642) | (22,690) |
Subtotal | (529,209) | (652,890) |
Trade accounts receivable, net | $ 662,583 | $ 638,895 |
Trade Accounts Receivable, Net - Additional Information (Details) - Customer Concentration Risk - Accounts Receivable |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 37.00% | 39.00% |
Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 25.00% | 26.00% |
Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 24.00% | 20.00% |
Inventories - Components of Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 214,508 | $ 209,180 |
Work in process | 47,802 | 40,937 |
Finished goods | 227,079 | 240,532 |
Total inventories | $ 489,389 | $ 490,649 |
Leases - Additional Information (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease, rent expense | $ 20,000,000 | $ 26,000,000 | $ 26,000,000 |
Operating lease right of use assets impairment loss | $ 0 | $ 1,000,000 | $ 2,000,000 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease term | 1 year | ||
Minimum | International Land Easements | |||
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease term | 29 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease term | 23 years | ||
Maximum | International Land Easements | |||
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease term | 98 years |
Leases - Components of Total Lease Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | |||
Operating lease cost | $ 15,057 | $ 21,664 | $ 22,544 |
Finance lease cost: | |||
Amortization of right-of-use assets | 4,713 | 4,487 | 3,468 |
Interest on lease liabilities | 4,601 | 4,773 | 4,641 |
Total finance lease cost | 9,314 | 9,260 | 8,109 |
Total lease cost | $ 24,371 | $ 30,924 | $ 30,653 |
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from finance leases | $ 4,601 | $ 4,773 |
Operating cash flows from operating leases | 15,006 | 18,780 |
Financing cash flows from finance leases | 3,179 | 2,768 |
Non-cash activity: | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 12,006 | $ 3,305 |
Leases - Term and Discount Rate Information (Details) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
Weighted average remaining lease term - operating leases | 5 years | 6 years |
Weighted average remaining lease term - finance leases | 21 years | 21 years |
Weighted average discount rate - operating leases | 6.90% | 7.10% |
Weighted average discount rate - finance leases | 7.10% | 7.10% |
Leases - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Operating Leases | ||
Year one | $ 16,136 | $ 13,473 |
Year two | 16,412 | 13,402 |
Year three | 15,215 | 13,446 |
Year four | 11,363 | 12,246 |
Year five | 7,400 | 8,961 |
Thereafter | 9,712 | 16,822 |
Total lease payments | 76,238 | 78,350 |
Less: Imputed interest | (12,239) | (15,825) |
Total | 63,999 | 62,525 |
Financing Leases | ||
Year one | 7,492 | 7,428 |
Year two | 6,726 | 6,992 |
Year three | 5,572 | 6,381 |
Year four | 5,474 | 5,488 |
Year five | 5,474 | 5,474 |
Thereafter | 89,862 | 95,336 |
Total lease payments | 120,600 | 127,099 |
Less: Imputed interest | (57,248) | (61,636) |
Total | $ 63,352 | $ 65,463 |
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deposits and advances | $ 1,174 | $ 1,696 |
Prepaid insurance | 7,962 | 6,916 |
Prepaid regulatory fees | 3,710 | 3,565 |
Income and other tax receivable | 8,850 | 11,882 |
Prepaid taxes | 16,085 | 5,542 |
Other current receivables | 42,770 | 17,117 |
Other prepaid assets | 17,309 | 21,836 |
Chargeback receivable | 12,358 | 4,913 |
Total prepaid expenses and other current assets | 110,218 | 73,467 |
Securities class action amount covered by insurance | $ 33,000 | $ 6,000 |
Property, Plant, and Equipment, Net - Depreciation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 60,705 | $ 60,420 | $ 63,283 |
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Goodwill [Roll Forward] | ||
Balance, beginning of period | $ 522,814 | $ 419,504 |
Goodwill acquired during the period | 70,584 | 103,679 |
Currency translation | (381) | (369) |
Balance, end of period | $ 593,017 | $ 522,814 |
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 1,256,412 | $ 1,286,896 |
Accumulated Amortization | (494,915) | (361,665) |
Net | 761,497 | 925,231 |
In-process research and development | 405,425 | 379,395 |
Intangible assets, cost | 1,661,837 | 1,666,291 |
Intangible assets, net | 1,166,922 | 1,304,626 |
In-process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ 0 | 0 |
Product rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Amortization Period (in years) | 8 years 1 month 6 days | |
Cost | $ 1,122,612 | 1,153,096 |
Accumulated Amortization | (436,902) | (328,587) |
Net | $ 685,710 | 824,509 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Amortization Period (in years) | 4 years 10 months 24 days | |
Cost | $ 133,800 | 133,800 |
Accumulated Amortization | (58,013) | (33,078) |
Net | $ 75,787 | $ 100,722 |
Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization | $ 172,701 | $ 174,967 | $ 143,952 |
Goodwill and Intangible Assets - Future Amortization Expense (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Future Amortization | ||
2022 | $ 158,907 | |
2023 | 146,196 | |
2024 | 136,300 | |
2025 | 97,526 | |
2026 | 53,192 | |
Thereafter | 169,376 | |
Net | $ 761,497 | $ 925,231 |
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accounts payable | $ 131,084 | $ 153,140 |
Accrued returns allowance | 161,978 | 174,984 |
Accrued compensation | 62,098 | 58,922 |
Accrued Medicaid and commercial rebates | 85,737 | 131,088 |
Accrued royalties | 20,893 | 21,777 |
Commercial chargebacks and rebates | 10,226 | 10,226 |
Accrued professional fees | 9,926 | 10,748 |
Taxes payable | 2,523 | 5,538 |
Liabilities for legal proceedings and claims | 58,000 | 11,000 |
Accrued other | 40,880 | 34,444 |
Total accounts payable and accrued expenses | $ 583,345 | $ 611,867 |
Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt | $ 2,730,750 | $ 2,805,750 |
Less: debt issuance costs | (20,083) | (26,258) |
Total debt, net of debt issuance costs | 2,710,667 | 2,779,492 |
Less: current portion of long-term debt | (30,614) | (44,228) |
Total long-term debt, net | 2,680,053 | 2,735,264 |
Other | ||
Debt Instrument [Line Items] | ||
Long-term debt | 624 | 624 |
Term Loan due May 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 2,590,876 | 2,631,876 |
Rondo Term Loan due January 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 139,250 | $ 173,250 |
Other Long-Term Liabilities - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Other Liabilities [Line Items] | ||
Other long-term liabilities | $ 38,903 | $ 83,365 |
Deferred compensation plan liabilities | 13,883 | 14,007 |
Interest rate swap | ||
Other Liabilities [Line Items] | ||
Other long-term liabilities | 11,473 | 53,903 |
Uncertain tax positions | ||
Other Liabilities [Line Items] | ||
Other long-term liabilities | 3,177 | 3,065 |
Long-term compensation | ||
Other Liabilities [Line Items] | ||
Other long-term liabilities | 21,589 | 20,542 |
Deferred compensation plan liabilities | 12,000 | |
Long-term employee benefit | 8,000 | |
Other long-term liabilities | ||
Other Liabilities [Line Items] | ||
Other long-term liabilities | $ 2,664 | 5,855 |
Financing Lease Liabilities Noncurrent | ||
Other Liabilities [Line Items] | ||
Other long-term liabilities | $ 2,000 |
Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Liabilities | ||
Interest rate swap | $ 11,473 | $ 53,903 |
Deferred compensation plan liabilities | 13,883 | 14,007 |
Contingent consideration liability | 5,900 | |
Current Liabilities | ||
Liabilities | ||
Deferred compensation plan liabilities | 2,000 | |
Non-current Liabilities | ||
Liabilities | ||
Deferred compensation plan liabilities | 12,000 | |
Quoted Prices in Active Markets (Level 1) | ||
Liabilities | ||
Interest rate swap | 0 | 0 |
Deferred compensation plan liabilities | 0 | 0 |
Contingent consideration liability | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Liabilities | ||
Interest rate swap | 11,473 | 53,903 |
Deferred compensation plan liabilities | 13,883 | 14,007 |
Contingent consideration liability | 0 | |
Significant Unobservable Inputs (Level 3) | ||
Liabilities | ||
Interest rate swap | 0 | 0 |
Deferred compensation plan liabilities | 0 | $ 0 |
Contingent consideration liability | $ 5,900 |
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Apr. 02, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt | $ 2,710,667 | $ 2,779,492 | |
Term Loan | Rondo Partners LLC | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt fair value | 139,000 | 172,000 | |
Term Loan | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt fair value | 2,600,000 | 2,600,000 | |
Promissory Notes | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt | $ 38,000 | $ 36,000 | |
Kashiv Specialty Pharmaceuticals, LLC | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration, liability, maximum | $ 8,000 |
Fair Value Measurements - Reconciliation of Contingent Consideration Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Details) - Kashiv Specialty Pharmaceuticals, LLC $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance, beginning of period | $ 0 |
Addition due to the KSP Acquisition | 5,700 |
Change in fair value during period | 200 |
Balance, end of period | $ 5,900 |
Financial Instruments - Additional Information (Details) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
Oct. 31, 2019 |
---|---|---|---|
Derivative [Line Items] | |||
Net of income taxes, recognized in accumulated other comprehensive loss | $ (11,500,000) | ||
Accumulated Other Comprehensive Loss | |||
Derivative [Line Items] | |||
Net of income taxes, recognized in accumulated other comprehensive loss | (6,000,000) | $ 54,000,000 | |
Non- Controlling Interests | |||
Derivative [Line Items] | |||
Net of income taxes, recognized in accumulated other comprehensive loss | $ (5,500,000) | $ (27,000,000) | |
Interest Rate Lock Agreement | |||
Derivative [Line Items] | |||
Notional amount | $ 1,300,000,000 |
Financial Instruments - Summary of Fair Values of Derivative Instruments in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Variable to Fixed Interest Rate Swap | Designated as Hedging Instrument | Other long-term liabilities | ||
Derivative [Line Items] | ||
Fair Value | $ 11,473 | $ 53,903 |
Stock-Based Compensation - Restricted Stock Units (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Number of Restricted Stock Units | |||
Non-vested beginning balance (in shares) | 9,132,552 | 2,637,358 | 1,330,624 |
Granted (in shares) | 6,870,481 | 8,414,762 | 3,327,308 |
Vested (in shares) | (1,906,607) | (692,868) | (479,299) |
Forfeited (in shares) | (912,826) | (1,226,700) | (1,541,275) |
Non-vested ending balance (in shares) | 13,183,600 | 9,132,552 | 2,637,358 |
Weighted- Average Grant Date Fair Value | |||
Non-vested beginning balance (in dollars per share) | $ 5.09 | $ 12.16 | $ 17.15 |
Granted (in dollars per share) | 5.86 | 3.67 | 11.81 |
Vested (in dollars per share) | 5.97 | 12.33 | 16.10 |
Forfeited (in dollars per share) | 6.68 | 6.48 | 14.46 |
Non-vested ending balance (in dollars per share) | $ 5.25 | $ 5.09 | $ 12.16 |
Weighted- Average Remaining Years | 1 year 4 months 24 days | 1 year 8 months 12 days | 1 year 8 months 12 days |
Aggregate Intrinsic Value (in millions) | $ 63.7 | $ 41.7 | $ 12.7 |
Stock-Based Compensation - Valuation Assumptions (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 48.60% | |
Risk-free interest rate | 2.40% | |
Dividend yield | 0.00% | |
Weighted-average expected life (years) | 6 years 2 months 1 day | |
Weighted average grant date fair value (in dollars per share) | $ 5.54 |
Stock-Based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total | $ 28,412 | $ 20,750 | $ 21,679 |
Cost of goods sold | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total | 4,688 | 4,166 | 3,166 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total | 5,006 | 13,343 | 15,729 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total | $ 18,718 | $ 3,241 | $ 2,784 |
Employee Benefit Plans - Additional Information (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 31, 2019 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Retirement Benefits [Abstract] | ||||
Contributions to defined contribution plan | $ 9,000,000 | $ 8,000,000 | $ 7,000,000 | |
Deferred compensation plan, employer contributions | $ 0 |
Segment Information - Additional Information (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021
segment
product
| |
Segment Reporting [Abstract] | |
Number of reportable segments | segment | 3 |
Number of product families | product | 250 |
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Other Assets [Line Items] | ||
Other assets | $ 20,614 | $ 22,344 |
Financing lease right of use assets | 64,475 | 68,217 |
Deferred Revolving Credit Facility costs | ||
Other Assets [Line Items] | ||
Other assets | 1,603 | 2,648 |
Security deposits | ||
Other Assets [Line Items] | ||
Other assets | 3,895 | 2,240 |
Long-term prepaid expenses | ||
Other Assets [Line Items] | ||
Other assets | 5,896 | 10,598 |
Other Assets | ||
Other Assets [Line Items] | ||
Other assets | $ 9,220 | 6,858 |
Financing lease right of use assets | $ 10,000 |
Property Losses and Associated Expenses, Net - Narrative (Details) $ in Thousands |
1 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2021
facility
|
Dec. 31, 2021
USD ($)
|
|
Unusual or Infrequent Items, or Both [Abstract] | ||
Number of facilities damaged | facility | 2 | |
Property losses and associated expenses, net | $ 10,368 | |
Insurance recoveries | $ 5,000 |
Property Losses and Associated Expenses - Charges (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Unusual or Infrequent Item, or Both [Line Items] | |
Property losses and associated expenses, net | $ 10,368 |
Less: Insurance recoveries received | (5,000) |
Property losses and associated expenses, net of insurance recoveries | 5,368 |
Impairment of equipment | |
Unusual or Infrequent Item, or Both [Line Items] | |
Property losses and associated expenses, net | 4,202 |
Impairment of inventory | |
Unusual or Infrequent Item, or Both [Line Items] | |
Property losses and associated expenses, net | 950 |
Repairs and maintenance expenses | |
Unusual or Infrequent Item, or Both [Line Items] | |
Property losses and associated expenses, net | 3,716 |
Salaries and benefits for cleaning and repairing facilities | |
Unusual or Infrequent Item, or Both [Line Items] | |
Property losses and associated expenses, net | $ 1,500 |
Subsequent Event - Additional Information (Details) - USD ($) $ in Millions |
Feb. 09, 2022 |
Nov. 02, 2021 |
---|---|---|
Subsequent Event [Line Items] | ||
Consideration paid in cash on hand | $ 2 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Inventory adjustment | $ 1 | |
Baclofen Franchise | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Consideration paid in cash on hand | $ 85 |
Label | Element | Value |
---|---|---|
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-02 [Member] |