Third Quarter Total Net Product Sales of $28.7 Million
Rolvedon Net Product Sales of $15.0 Million
Cash and Short-Term Investments of $88.6 Million
LAKE FOREST, Ill., Nov. 11, 2024 (GLOBE NEWSWIRE) -- Assertio Holdings, Inc. ("Assertio" or the "Company") (Nasdaq: ASRT), a pharmaceutical company with comprehensive commercial capabilities offering differentiated products to patients, today reported financial results for the third quarter ended September 30, 2024.
"Third quarter results reflected solid performance as we continue to establish Rolvedon as our lead asset and drive economic returns from our commercial portfolio," said Brendan O'Grady, Chief Executive Officer. "Rolvedon has been well received by physicians, posting another quarter of stable performance and the continued expansion of our customer base. The Rolvedon same day dosing trial has concluded and the results have been accepted for presentation at the San Antonio Breast Cancer Symposium in December 2024."
"Additionally, we have implemented new sales and marketing tactics for Sympazan, which are designed to drive prescriber awareness and prescription growth in key markets. We are maintaining our share of Indocin and working to maximize the value of this product and our other commercial assets moving forward. We are also evaluating new approaches to grow existing assets as well as the acquisition of additional assets to fuel further growth."
Financial Highlights (unaudited):
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| (in millions, except per share amounts) | September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||||
| Net Product Sales (GAAP) | $ | 28.7 | $ | 30.7 | $ | 35.1 | $ | 91.3 | $ | 117.0 | |||||||||
| Net Loss (GAAP) | $ | (2.9 | ) | $ | (3.7 | ) | $ | (279.5 | ) | $ | (11.1 | ) | $ | (274.6 | ) | ||||
| Loss Per Share (GAAP) | $ | (0.03 | ) | $ | (0.04 | ) | $ | (3.42 | ) | $ | (0.12 | ) | $ | (4.35 | ) | ||||
| Adjusted EBITDA (Non-GAAP)1 | $ | 5.3 | $ | 5.0 | $ | 12.9 | $ | 17.7 | $ | 63.3 | |||||||||
| Adjusted Earnings Per Share (Non-GAAP)1 | $ | 0.03 | $ | 0.02 | $ | 0.01 | $ | 0.09 | $ | 0.46 | |||||||||
Third quarter results included the following highlights (our discussion below focuses on a comparison of third quarter 2024 to second quarter 2024 given the acquisition of Spectrum and the generic competition of Indocin introduced in the third quarter 2023):
- Rolvedon net product sales were stable at $15.0 million in the third quarter, from $15.1 million in the second quarter, driven by continued volume growth offset by lower net pricing.
- Indocin net product sales in the third quarter were $5.7 million, decreased from $6.9 million in the second quarter, due to the previously announced generic competition affecting pricing.
- Gross margin2 in the third quarter increased to 74%, from 71% in the second quarter, primarily due a decrease in the level of inventory write downs in late life-cycle stage products and the completion of Rolvedon inventory step-up amortization.
- SG&A expense in the third quarter was $16.7 million, decreased from $18.4 million in the second quarter. The decrease was primarily due to lower sales and marketing and other general and administrative costs, partially offset by net higher legal related charges.
- Adjusted EBITDA3 was $5.3 million in the third quarter, increased from $5.0 million in the second quarter, primarily due to lower SG&A expense, partially offset by lower net product sales.
Balance Sheet and Cash Flow
- For the quarter ended September 30, 2024, cash, cash equivalents and short-term investments were $88.6 million, compared with $88.4 million at June 30, 2024. Cash flow generation during the quarter was impacted by the timing of working capital as well as lower net product sales.
- Debt at September 30, 2024 was $40.0 million, comprised of the Company's 6.5% convertible notes, with no maturities until September 2027.
Board Updates
Peter Staple retired from the board after more than 20 years as an independent director. Also, Dr. Jeffrey Vacirca has elected to depart from the board to focus on his other business interests. Both departures were effective November 7, 2024.
Assertio announced the appointment of Heather Mason as Board Chair. Mason has served as an independent director since 2019 and as interim CEO of Assertio from January to May of 2024. Further, David Stark was appointed to the board as an independent director and member of the Nominating and Corporate Governance Committee. Stark was previously Executive Vice President and Chief Legal Officer at Teva Pharmaceutical Industries Limited.
"I want thank Jeff and Peter for their service to Assertio and its shareholders," said Mason. "Jeff's insight into the oncology market since joining the board as part of the Spectrum transaction has been invaluable. Peter has served for more than 20 years on the Assertio board, offering calm leadership and wise counsel through transitions and challenges faced by the organization during his tenure. I also appreciate Peter extending his board service during the time of transition to Brendan O'Grady as the new CEO. I want to welcome David to the board and look forward to his partnership. David brings extensive litigation, compliance and acquisition experience from his time at Teva and earlier in private law firm practice."
Conference Call and Investor Presentation Information
Assertio's management will host a conference call to discuss its third quarter 2024 financial results today:
| Date: | Monday, November 11, 2024 |
| Time: | 4:30 p.m. Eastern Time |
| Webcast (live and archive): | http://investor.assertiotx.com/overview/default.aspx (Events & Webcasts, Investor Page) |
| Dial-in numbers: | 1-646-307-1963, Conference ID 3278948 |
To access the live webcast, the recorded conference call replay, and other materials, please visit Assertio's investor relations website at http://investor.assertiotx.com/overview/default.aspx. Please connect at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast. The replay will be available approximately two hours after the call on Assertio's investor website.
1 Non-GAAP measures are reconciled to the corresponding GAAP measures in the schedules attached.
2 Gross margin represents the ratio of net product sales less cost of sales to net product sales.
3 See "Non-GAAP Financial Measures" below for information about reconciling our Adjusted EBITDA guidance to Net Loss.
About Assertio
Assertio is a commercial pharmaceutical company with comprehensive commercial capabilities offering differentiated products to patients. We have built our commercial portfolio through acquisition or licensing of approved products. Our commercial capabilities include marketing through both a sales force and a non-personal promotion model, market access through payor contracting, and trade and distribution. To learn more about Assertio, visit www.assertiotx.com.
Investor Contact
Matt Kreps, Managing Director
Darrow Associates
M: 214-597-8200
mkreps@darrowir.com
Forward Looking Statements
The statements in this communication include forward-looking statements. Forward-looking statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs. Forward-looking statements speak only as of the date they are made or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as there can be no assurance that the events or circumstances reflected in these statements will be achieved or will occur. Forward-looking statements can often, but not always, be identified by the use of forward-looking terminology such as "anticipate," "approximate", "believe," "could," "estimate," "expect," "goal," "intend," "may," "might," "opportunity," "plan," "potential," "project," "prospective," "pursue," "seek," "should," "strategy," "target," "will," or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements, including: Assertio's ability to grow sales of, and the commercial success and market acceptance of, Rolvedon and Assertio's other products; Assertio's ability to successfully develop and execute its sales, marketing and promotion strategies using its sales force and non-personal promotion model capabilities; the impact on sales and profits from the entry and sales of generics of Assertio's products and/or other products competitive with any of Assertio's products (including indomethacin suppositories compounded by hospitals and other institutions including a 503B compounder which we believe to be violation of certain provisions of the Food, Drug and Cosmetic Act); the timing and impact of additional generic approvals and uncertainty around the recent approvals and launches of generic Indocin products (which are not patent protected and now face generic competition as a result of the August 2023 approval and launch of generic indomethacin suppositories and January 2024 approval and subsequent launch of a generic indomethacin oral suspension product); risks that any new businesses will not be integrated successfully or that the combined company will not realize estimated cost savings, value of certain tax assets, synergies and growth, or that such benefits may take longer and/or cost more to realize than expected; expected industry trends, including pricing pressures and managed healthcare practices; Assertio's ability to attract and retain executive leadership and key employees; the ability of Assertio's third-party manufacturers to manufacture adequate quantities of commercially salable inventory and active pharmaceutical ingredients for each of Assertio's products on commercially reasonable terms and in compliance with their contractual obligations to Assertio, and Assertio's ability to maintain its supply chain which relies on single-source suppliers; the outcome of, and Assertio's intentions with respect to, any litigation or government investigations, including pending and potential future shareholder litigation relating to the Spectrum Merger and/or the recent approval and launch of generic indomethacin suppositories, opioid-related government investigations and opioid-related litigation, the recently unsealed qui tam litigation, as well as Spectrum's legacy shareholder and other litigation and, and other disputes and litigation, and the costs and expenses associated therewith; Assertio's financial cost and outcomes of clinical trials, including the extent to which data from the Rolvedon same-day dosing trial may support ongoing commercialization efforts; Assertio's compliance with legal and regulatory requirements related to the development or promotion of its products; variations in revenues obtained from commercialization agreements and the accounting treatment with respect thereto; Assertio's common stock maintaining compliance with The Nasdaq Capital Market's minimum closing bid requirement of at least $1.00 per share, particularly in light of Assertio's stock trading below or only slightly above $1.00 per share recently as well as recent market activity by a short seller; and Assertio's ability to obtain and maintain intellectual property protection for its products and operate its business without infringing the intellectual property rights of others. For a discussion of additional factors that could cause actual results to differ materially from those contemplated by forward-looking statements, see the risks described in Assertio's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Many of these risks and uncertainties may be exacerbated by public health emergencies and general macroeconomic conditions. Assertio does not assume, and hereby disclaims, any obligation to update forward-looking statements, except as may be required by law.
Non-GAAP Financial Measures
To supplement the Company's financial results presented on a U.S. generally accepted accounting principles ("GAAP") basis, the Company has included information about non-GAAP measures of EBITDA, adjusted EBITDA, adjusted earnings, and adjusted earnings per share as useful operating metrics. The Company believes that the presentation of these non-GAAP financial measures, when viewed with results under GAAP and the accompanying reconciliation, provides supplementary information to analysts, investors, lenders, and the Company's management in assessing the Company's performance and results from period to period. The Company uses these non-GAAP measures internally to understand, manage and evaluate the Company's performance, and in part, in the determination of bonuses for executive officers and employees. These non-GAAP financial measures should be considered in addition to, and not a substitute for, or superior to, net income or other financial measures calculated in accordance with GAAP. Non-GAAP financial measures used by us may be calculated differently from, and therefore may not be comparable to, non-GAAP measures used by other companies.
Specified Items
Non-GAAP measures presented within this release exclude specified items. The Company considers specified items to be significant income/expense items not indicative of current operations. Specified items may include adjustments to interest expense and interest income, income tax expense (benefit), depreciation expense, amortization expense, sales reserves adjustments for products the Company is no longer selling, stock-based compensation expense, fair value adjustments to contingent consideration or derivative liability, restructuring charges, amortization of fair value inventory step-up as a result of purchase accounting, transaction-related costs, gains, losses or impairments from adjustments to long-lived assets and assets not part of current operations, changes in valuation allowances on deferred tax assets, and gains or losses resulting from debt refinancing or extinguishment.
| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands, except per share amounts) (unaudited) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||||
| Revenues: | |||||||||||||||||||
| Product sales, net | $ | 28,705 | $ | 30,695 | $ | 35,137 | $ | 91,262 | $ | 116,989 | |||||||||
| Royalties and milestones | 499 | 431 | 490 | 1,516 | 1,910 | ||||||||||||||
| Other revenue | - | - | - | - | 185 | ||||||||||||||
| Total revenues | 29,204 | 31,126 | 35,627 | 92,778 | 119,084 | ||||||||||||||
| Costs and expenses: | |||||||||||||||||||
| Cost of sales | 7,550 | 8,889 | 7,060 | 27,616 | 17,299 | ||||||||||||||
| Research and development expenses | 1,005 | 798 | 1,316 | 2,536 | 1,819 | ||||||||||||||
| Selling, general and administrative expenses | 16,726 | 18,385 | 21,005 | 53,635 | 54,680 | ||||||||||||||
| Change in fair value of contingent consideration | 300 | - | (17,532 | ) | 300 | (8,124 | ) | ||||||||||||
| Amortization of intangible assets | 6,671 | 6,671 | 10,184 | 18,973 | 22,752 | ||||||||||||||
| Loss on impairment of intangible assets | - | - | 238,831 | - | 238,831 | ||||||||||||||
| Restructuring charges | - | - | 3,034 | 720 | 3,034 | ||||||||||||||
| Total costs and expenses | 32,252 | 34,743 | 263,898 | 103,780 | 330,291 | ||||||||||||||
| Loss from operations | (3,048 | ) | (3,617 | ) | (228,271 | ) | (11,002 | ) | (211,207 | ) | |||||||||
| Other income (expense): | |||||||||||||||||||
| Debt-related expenses | - | - | - | - | (9,918 | ) | |||||||||||||
| Interest expense | (761 | ) | (758 | ) | (752 | ) | (2,276 | ) | (2,625 | ) | |||||||||
| Interest income | 887 | 842 | 605 | 2,441 | 1,713 | ||||||||||||||
| Other gain (loss) | 45 | 8 | (467 | ) | 57 | (112 | ) | ||||||||||||
| Total other income (expense) | 171 | 92 | (614 | ) | 222 | (10,942 | ) | ||||||||||||
| Net loss before income taxes | (2,877 | ) | (3,525 | ) | (228,885 | ) | (10,780 | ) | (222,149 | ) | |||||||||
| Income tax expense | (44 | ) | (149 | ) | (50,659 | ) | (325 | ) | (52,409 | ) | |||||||||
| Net loss and comprehensive loss | $ | (2,921 | ) | $ | (3,674 | ) | $ | (279,544 | ) | $ | (11,105 | ) | $ | (274,558 | ) | ||||
| Basic net loss per share | $ | (0.03 | ) | $ | (0.04 | ) | $ | (3.42 | ) | $ | (0.12 | ) | $ | (4.35 | ) | ||||
| Diluted net loss per share | $ | (0.03 | ) | $ | (0.04 | ) | $ | (3.42 | ) | $ | (0.12 | ) | $ | (4.35 | ) | ||||
| Shares used in computing basic net loss per share | 95,352 | 95,240 | 81,713 | 95,191 | 63,066 | ||||||||||||||
| Shares used in computing diluted net loss per share | 95,352 | 95,240 | 81,713 | 95,191 | 63,066 | ||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) | |||||||
| (Unaudited) | |||||||
| September 30, 2024 | December 31, 2023 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 37,981 | $ | 73,441 | |||
| Short-term investments | 50,598 | - | |||||
| Accounts receivable, net | 44,944 | 47,663 | |||||
| Inventories, net | 39,788 | 37,686 | |||||
| Prepaid and other current assets | 7,845 | 12,272 | |||||
| Total current assets | 181,156 | 171,062 | |||||
| Property and equipment, net | 624 | 770 | |||||
| Intangible assets, net | 92,359 | 111,332 | |||||
| Other long-term assets | 1,860 | 3,255 | |||||
| Total assets | $ | 275,999 | $ | 286,419 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 13,153 | $ | 13,439 | |||
| Accrued rebates, returns and discounts | 60,482 | 58,137 | |||||
| Accrued liabilities | 12,964 | 18,213 | |||||
| Contingent consideration, current portion | 3,000 | 2,700 | |||||
| Other current liabilities | 505 | 954 | |||||
| Total current liabilities | 90,104 | 93,443 | |||||
| Long-term debt | 38,840 | 38,514 | |||||
| Other long-term liabilities | 16,537 | 16,459 | |||||
| Total liabilities | 145,481 | 148,416 | |||||
| Commitments and contingencies | |||||||
| Shareholders' equity: | |||||||
| Common stock, $0.0001 par value, 200,000,000 shares authorized; 95,360,756 and 94,668,523 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively. | 9 | 9 | |||||
| Additional paid-in capital | 793,157 | 789,537 | |||||
| Accumulated deficit | (662,648 | ) | (651,543 | ) | |||
| Total shareholders' equity | 130,518 | 138,003 | |||||
| Total liabilities and shareholders' equity | $ | 275,999 | $ | 286,419 | |||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) | |||||||
| Nine Months Ended September 30, | |||||||
| 2024 | 2023 | ||||||
| Operating Activities | |||||||
| Net loss | $ | (11,105 | ) | $ | (274,558 | ) | |
| Adjustments to reconcile net loss to net cash from operating activities: | |||||||
| Depreciation and amortization | 19,118 | 23,321 | |||||
| Amortization of debt issuance costs and Royalty Rights | 326 | 350 | |||||
| Accretion of interest income from short-term investments | (538 | ) | - | ||||
| Loss on impairment of intangible assets | - | 238,831 | |||||
| Recurring fair value measurements of assets and liabilities | 269 | (7,612 | ) | ||||
| Debt-related expenses | - | 9,918 | |||||
| Provisions for inventory and other assets | 4,982 | 2,129 | |||||
| Stock-based compensation | 3,911 | 6,516 | |||||
| Deferred income taxes | - | 47,192 | |||||
| Changes in assets and liabilities, net of acquisition: | |||||||
| Accounts receivable | 2,719 | 33,865 | |||||
| Inventories | (7,084 | ) | (8,898 | ) | |||
| Prepaid and other assets | 5,822 | 6,769 | |||||
| Accounts payable and other accrued liabilities | (5,255 | ) | (21,523 | ) | |||
| Accrued rebates, returns and discounts | 2,345 | (11,027 | ) | ||||
| Interest payable | (650 | ) | (1,376 | ) | |||
| Net cash provided by operating activities | 14,860 | 43,897 | |||||
| Investing Activities | |||||||
| Purchases of property and equipment | - | (528 | ) | ||||
| Purchase of Sympazan | - | (280 | ) | ||||
| Net cash acquired in Spectrum Merger | - | 1,950 | |||||
| Proceeds from sale of short-term investments | - | 2,194 | |||||
| Proceeds from maturities of short-term investments | 23,534 | - | |||||
| Purchases of short-term investments | (73,563 | ) | - | ||||
| Net cash (used in) provided by investing activities | (50,029 | ) | 3,336 | ||||
| Financing Activities | |||||||
| Payments in connection with 2027 Convertible Notes | - | (10,500 | ) | ||||
| Payment of direct transaction costs related to convertible debt inducement | - | (1,119 | ) | ||||
| Payment of contingent consideration | - | (15,408 | ) | ||||
| Payments related to the vesting and settlement of equity awards, net | (291 | ) | (7,770 | ) | |||
| Other financing activities | - | (489 | ) | ||||
| Net cash used in financing activities | (291 | ) | (35,286 | ) | |||
| Net (decrease) increase in cash and cash equivalents | (35,460 | ) | 11,947 | ||||
| Cash and cash equivalents at beginning of year | 73,441 | 64,941 | |||||
| Cash and cash equivalents at end of period | $ | 37,981 | $ | 76,888 | |||
| Supplemental Disclosure of Cash Flow Information | |||||||
| Net cash paid for income taxes | $ | 1,388 | $ | 3,424 | |||
| Cash paid for interest | $ | 2,600 | $ | 3,651 | |||
| RECONCILIATION OF GAAP NET LOSS TO NON-GAAP EBITDA and ADJUSTED EBITDA (in thousands) (unaudited) | ||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | Financial Statement Classification | |||||||||||||||||
| GAAP Net Loss | $ | (2,921 | ) | $ | (3,674 | ) | $ | (279,544 | ) | $ | (11,105 | ) | $ | (274,558 | ) | |||||||
| Interest expense | 761 | 758 | 752 | 2,276 | 2,625 | Interest expense | ||||||||||||||||
| Income tax expense | 44 | 149 | 50,659 | 325 | 52,409 | Income tax expense | ||||||||||||||||
| Depreciation expense | 40 | 40 | 172 | 145 | 569 | Selling, general and administrative expenses | ||||||||||||||||
| Amortization of intangible assets | 6,671 | 6,671 | 10,184 | 18,973 | 22,752 | Amortization of intangible assets | ||||||||||||||||
| EBITDA (Non-GAAP) | $ | 4,595 | $ | 3,944 | $ | (217,777 | ) | $ | 10,614 | $ | (196,203 | ) | ||||||||||
| Adjustments: | ||||||||||||||||||||||
| Legacy product reserves | - | - | - | - | (185 | ) | Other revenue | |||||||||||||||
| Stock-based compensation | 1,296 | 1,408 | 1,864 | 3,911 | 6,516 | Selling, general and administrative expenses | ||||||||||||||||
| Change in fair value of contingent consideration(1) | 300 | - | (17,532 | ) | 300 | (8,124 | ) | Change in fair value of contingent consideration | ||||||||||||||
| Debt-related expenses(2) | - | - | - | - | 9,918 | Debt-related expenses | ||||||||||||||||
| Transaction-related expenses(3) | - | - | 2,736 | - | 8,539 | Selling, general and administrative expenses | ||||||||||||||||
| Loss on impairment of intangible assets(4) | - | - | 238,831 | - | 238,831 | Loss on impairment of intangible assets | ||||||||||||||||
| Restructuring costs(5) | - | - | 3,034 | 720 | 3,034 | Restructuring charges | ||||||||||||||||
| Other(6) | (887 | ) | (366 | ) | 1,755 | 2,123 | 967 | Multiple | ||||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 5,304 | $ | 4,986 | $ | 12,911 | $ | 17,668 | $ | 63,293 | ||||||||||||
| (1) | The fair value of the contingent consideration is remeasured each reporting period, with changes in the fair value resulting from changes in the underlying inputs being recognized as a benefit or expense in operating expenses until the contingent consideration arrangement is settled. | |
| (2) | Debt-related expenses consist of an induced conversion expense of approximately $8.8 million and direct transaction costs of approximately $1.1 million incurred as a result of the privately negotiated exchange of $30.0 million principal amount of the Company's 6.5% Convertible Senior Notes due 2027 in the first quarter of 2023. | |
| (3) | Represents transaction-related expenses associated with the acquisition of Spectrum, which closed effective July 31, 2023. | |
| (4) | Represents the charge in the period for the impairment of intangible assets resulting from the revaluation of the Company's long-lived assets. | |
| (5) | Restructuring costs represent non-recurring costs associated with the Company's announced restructuring plans. | |
| (6) | Other for the three and nine months ended September 30, 2024 and 2023, and the three months ended June 30, 2024, represents the following adjustments (in thousands): |
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | Financial Statement Classification | |||||||||||||||||
| Amortization of inventory step-up | $ | - | $ | 476 | $ | 1,848 | $ | 4,564 | $ | 2,168 | Cost of sales | |||||||||||
| Interest income | (887 | ) | (842 | ) | (605 | ) | (2,441 | ) | (1,713 | ) | Interest income | |||||||||||
| Derivative fair value adjustment | - | - | 512 | - | 512 | Other gain (loss) | ||||||||||||||||
| Total Other | $ | (887 | ) | $ | (366 | ) | $ | 1,755 | $ | 2,123 | $ | 967 | ||||||||||
| RECONCILIATION OF GAAP NET LOSS and NET LOSS PER SHARE TO NON-GAAP ADJUSTED EARNINGS and ADJUSTED EARNINGS PER SHARE(1) (in thousands, except per share amounts) (unaudited) | |||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||
| September 30, 2024 | June 30, 2024 | September 30, 2023 | |||||||||||||||||||||
| Amount | Diluted EPS(2) | Amount | Diluted EPS(2) | Amount | Diluted EPS(2) | ||||||||||||||||||
| Net loss (GAAP)(2) | $ | (2,921 | ) | $ | (0.03 | ) | $ | (3,674 | ) | $ | (0.04 | ) | $ | (279,544 | ) | $ | (3.42 | ) | |||||
| Add: Convertible debt interest expense and other income statement impacts, net of tax(2) | - | - | - | ||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Amortization of intangible assets | 6,671 | 6,671 | 10,184 | ||||||||||||||||||||
| Stock-based compensation | 1,296 | 1,408 | 1,864 | ||||||||||||||||||||
| Change in fair value of contingent consideration | 300 | - | (17,532 | ) | |||||||||||||||||||
| Contingent consideration cash payable(3) | (253 | ) | - | (3,590 | ) | ||||||||||||||||||
| Transaction-related expenses | - | - | 2,736 | ||||||||||||||||||||
| Loss on impairment of intangible assets(4) | - | - | 238,831 | ||||||||||||||||||||
| Restructuring costs | - | - | 3,034 | ||||||||||||||||||||
| Other | (887 | ) | (366 | ) | 1,755 | ||||||||||||||||||
| Increase in deferred tax asset valuation allowance(5) | - | - | 43,035 | ||||||||||||||||||||
| Income tax benefit expense, as adjusted(6) | (1,782 | ) | (1,928 | ) | 387 | ||||||||||||||||||
| Adjusted earnings (Non-GAAP) | $ | 2,424 | $ | 0.03 | $ | 2,111 | $ | 0.02 | $ | 1,160 | $ | 0.01 | |||||||||||
| Diluted shares used in calculation (GAAP)(2) | 95,352 | 95,240 | 81,713 | ||||||||||||||||||||
| Add: Dilutive effect of stock-based awards and equivalents(2) | 933 | 394 | 2,191 | ||||||||||||||||||||
| Add: Dilutive effect of 2027 Convertible Notes(2) | - | - | - | ||||||||||||||||||||
| Diluted shares used in calculation (Non-GAAP)(2) | 96,285 | 95,634 | 83,904 | ||||||||||||||||||||
| (1) | Certain adjustments included here are the same as those reflected in the Company's reconciliation of GAAP net loss to non-GAAP adjusted EBITDA and therefore should be read in conjunction with that reconciliation and respective footnotes. | |
| (2) | The Company uses the if-converted method with respect to its convertible debt to compute GAAP and Non-GAAP diluted earnings per share when the effect is dilutive. Under the if-converted method, the Company assumes the 2027 Convertible Notes were converted at the beginning of each period presented and outstanding. As a result, interest expense, net of tax, and any other income statement impact associated with the 2027 Convertible Notes, net of tax, is added back to net income used in the diluted earnings per share calculation. | |
| For the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, the Company's potentially dilutive convertible debt under the if-converted method and stock-based awards under the treasury-stock method were not included in the computation of GAAP net loss and diluted net loss per share, and the potentially dilutive convertible debt under the if-converted method were not included in non-GAAP adjusted earnings and adjusted earnings per share, because to do so would be anti-dilutive. | ||
| For the three months ended September 30, 2023, the Company's potentially dilutive convertible debt under the if-converted method was not included in the computation of both non-GAAP adjusted earnings per share and GAAP diluted net loss per share, because to do so would be anti-dilutive. However, the potentially dilutive stock-based awards under the treasury-stock method were included in the computation of non-GAAP adjusted earnings and adjusted earnings per share because the effect was dilutive. | ||
| (3) | Represents the accrued cash payable, if any, of the INDOCIN contingent consideration for the respective period based on 20% royalty for annual INDOCIN net sales over $20.0 million. | |
| (4) | Represents the charge in the period for the impairment of intangible assets resulting from the revaluation of the Company's long-lived assets. | |
| (5) | Represents the amount of income tax expense related to the recognition of a full valuation allowance against deferred tax assets in the period. | |
| (6) | Represents the Company's income tax expense adjustment from the tax effect of pre-tax adjustments excluded from adjusted earnings. The tax effect of pre-tax adjustments excluded from adjusted earnings is computed at the blended federal and state statutory rate of 25%. | |
| RECONCILIATION OF GAAP NET LOSS and NET LOSS PER SHARE TO NON-GAAP ADJUSTED EARNINGS and ADJUSTED EARNINGS PER SHARE(1) (in thousands, except per share amounts) (unaudited) | |||||||||||||||
| Nine Months Ended | |||||||||||||||
| September 30, 2024 | September 30, 2023 | ||||||||||||||
| Amount | Diluted EPS(2) | Amount | Diluted EPS(2) | ||||||||||||
| Net loss (GAAP)(2) | $ | (11,105 | ) | $ | (0.12 | ) | $ | (274,558 | ) | $ | (4.35 | ) | |||
| Add: Convertible debt interest expense and other income statement impacts, net of tax(2) | - | 1,969 | |||||||||||||
| Adjustments: | |||||||||||||||
| Amortization of intangible assets | 18,973 | 22,752 | |||||||||||||
| Legacy products revenue reserves | - | (185 | ) | ||||||||||||
| Stock-based compensation | 3,911 | 6,516 | |||||||||||||
| Debt-related expenses, net | - | 9,639 | |||||||||||||
| Change in fair value of contingent consideration | 300 | (8,124 | ) | ||||||||||||
| Contingent consideration cash payable(3) | (253 | ) | (11,274 | ) | |||||||||||
| Transaction-related expenses | - | 8,539 | |||||||||||||
| Loss on impairment of intangible assets(4) | - | 238,831 | |||||||||||||
| Restructuring costs | 720 | 3,034 | |||||||||||||
| Other | 2,123 | 967 | |||||||||||||
| Increase in deferred tax asset valuation allowance(5) | - | 43,035 | |||||||||||||
| Income tax benefit expense, as adjusted(6) | (6,444 | ) | (5,556 | ) | |||||||||||
| Adjusted earnings (Non-GAAP) | $ | 8,225 | $ | 0.09 | $ | 35,585 | $ | 0.46 | |||||||
| Diluted shares used in calculation (GAAP)(2) | 95,191 | 63,066 | |||||||||||||
| Add: Dilutive effect of stock-based awards and equivalents(2) | 503 | 3,770 | |||||||||||||
| Add: Dilutive effect of 2027 Convertible Notes(2) | - | 11,324 | |||||||||||||
| Diluted shares used in calculation (Non-GAAP)(2) | 95,694 | 78,160 | |||||||||||||
| (1) | Certain adjustments included here are the same as those reflected in the Company's reconciliation of GAAP net loss to non-GAAP adjusted EBITDA and therefore should be read in conjunction with that reconciliation and respective footnotes. | |
| (2) | The Company uses the if-converted method with respect to its convertible debt to compute GAAP and Non-GAAP diluted earnings per share when the effect is dilutive. Under the if-converted method, the Company assumes the 2027 Convertible Notes were converted at the beginning of each period presented and outstanding. As a result, interest expense, net of tax, and any other income statement impact associated with the 2027 Convertible Notes, net of tax, is added back to net income used in the diluted earnings per share calculation. | |
| For the nine months ended September 30, 2024, the Company's potentially dilutive convertible debt under the if-converted method and stock-based awards under the treasury-stock method were not included in the computation of GAAP net loss and diluted net loss per share, and the potentially dilutive convertible debt under the if-converted method were not included in non-GAAP adjusted earnings and adjusted earnings per share, because to do so would be anti-dilutive. However, the potentially dilutive stock-based awards under the treasury-stock method were included in the computation of non-GAAP adjusted earnings and adjusted earnings per share because the effect was dilutive. | ||
| For the nine months ended September 30, 2023, the Company's potentially dilutive convertible debt under the if-converted method and stock-based awards under the treasury-stock method were not included in the computation of GAAP diluted net income per share, because to do so would be anti-dilutive. However, the potentially dilutive convertible debt under the if-converted method and stock-based awards under the treasury-stock method were included in the computation of non-GAAP adjusted earnings and adjusted earnings per share because the effect was dilutive. | ||
| (3) | Represents the accrued cash payable, if any, of the INDOCIN contingent consideration for the respective period based on 20% royalty for annual INDOCIN net sales over $20.0 million. | |
| (4) | Represents the charge in the period for the impairment of intangible assets resulting from the revaluation of the Company's long-lived assets. | |
| (5) | Represents the amount of income tax expense related to the recognition of a full valuation allowance against deferred tax assets in the period. | |
| (6) | Represents the Company's income tax expense adjustment from the tax effect of pre-tax adjustments excluded from adjusted earnings. The tax effect of pre-tax adjustments excluded from adjusted earnings is computed at the blended federal and state statutory rate of 25%. | |
