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Debt | 12 Months Ended
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Dec. 31, 2020
Debt Disclosure [Abstract] |
Debt | Debt The Company's debt consists of the following:
(in thousands) |  | December 31, 2020 |  | December 31, 2019
Senior Secured Term Loan due 2026: |  |  |  |
Principal |  | $ | 400,000 |  |  | $ | — |
Less: debt discount (1) |  | (7,434) |  |  | — |
Less: deferred financing (1) |  | (5,592) |  |  | — |
Net carrying value of the Senior Secured Term Loan |  | $ | 386,974 |  |  | $ | — |
Senior Secured Term Loan due 2023 (2): |  |  |  |
Principal |  | $ | — |  |  | $ | 150,000 |
Less: debt discount (1) |  | — |  |  | (2,315) |
Less: deferred financing (1) |  | — |  |  | (311) |
Net carrying value of the Senior Secured Term Loan |  | $ | — |  |  | $ | 147,374 |
Convertible Notes (3): |  |  |  |
Principal |  | $ | 2,825 |  |  | $ | 2,825 |
Less: debt discount (1) |  | (518) |  |  | (659) |
Less: deferred financing (1) |  | (27) |  |  | (35) |
Net carrying value of the Convertible Notes |  | $ | 2,280 |  |  | $ | 2,131 |
Net carrying value of Long-term debt |  | $ | 389,254 |  |  | $ | 149,505 |
______________________________ (1) Included in the Consolidated Balance Sheets within long-term debt and amortized to interest expense over the remaining life of the Convertible Notes and Senior Secured Term Loans using the effective interest rate method. (2) The principle, accrued interest and early settlement premiums associated with the Senior Secured Term Loan due 2023 were fully paid and settled in July 2020. (3) The Convertible Notes are currently convertible as the last reported sale price of the Company's common stock was equal to or more than 130% of the conversion price for at least 20 trading days of the 30 consecutive trading days ending on the last day of the quarter. Senior Secured Term Loan due 2026 In July 2020, the Company entered into a definitive agreement for a $400 million credit facility with Hayfin Capital Management (“Senior Secured Term Loan due 2026”) with an interest rate equal to 3-month LIBOR, subject to a 1% floor, plus 6.5% per annum and requires interest-only payments until mid-2024. The Senior Secured Term Loan due 2026 will be repaid in nine quarterly payments of $44.4 million, starting on July 2024 with the final balance due on the maturity date in July 2026. This transaction resulted in net proceeds of $385.9 million, after deducting fees and expenses. There were no warrants or equity conversion features associated with the Senior Secured Term Loan due 2026. The Company used the proceeds to voluntarily settle the Senior Secured Term Loan with BioPharma Credit PLC that was due in 2023 ("Senior Secured Term Loan due 2023"). The Senior Secured Term Loan due 2026 is subject to mandatory prepayment provisions that require prepayment upon a change of control, the incurrence of certain additional indebtedness, asset sale, or an event of loss, subject to certain conditions set forth in the Senior Secured Term Loan due 2026. The Company may prepay the Senior Secured Term Loan due 2026 in whole, at its option at any time. Any prepayment of the Senior Secured Term Loan due 2026 is subject to certain make-whole premiums and prepayment premiums, the latter of which decrease until the fourth anniversary of the transaction date at which point no prepayment penalty shall exist. The obligations under the Senior Secured Term Loan due 2026 are secured by a first lien security interest in certain assets of the Company. The Senior Secured Term Loan due 2026 contains certain customary representations and warranties, affirmative and negative covenants and events of default applicable to the Company. The Senior Secured Term Loan due 2026 also contains a minimum liquidity covenant of $75 million, and an incremental minimum consolidated revenue covenant, measured as of the previous four consecutive fiscal quarters. The minimum consolidated revenue covenant ranges from $140 million, beginning March 31, 2021, and peaks at $225 million by June 30, 2023, continuing at that level until the Senior Secured Term Loan due 2026 is repaid. If an event of default occurs and is continuing, Hayfin Capital Management may declare all amounts outstanding under the Senior Secured Term Loan due 2026 to be immediately due and payable. Senior Secured Term Loan due 2023 In September 2018, the Company entered into a loan agreement with BioPharma Credit PLC (“Senior Secured Term Loan due 2023") as the lender. The loan agreement provided for a $150 million senior secured term loan with an interest rate equal to the 3-month LIBOR plus 7.5% per annum and would mature in 5 years from the maturity date. The Senior Secured Term Loan due 2023 would be repaid in four quarterly payments equal to 12.5% thereof starting on the forty-eight month anniversary of the date of the first credit extension with the balance due on the Maturity Date. Interest was payable quarterly in arrears. The Senior Secured Term Loan due 2023 contained certain customary representations and warranties, affirmative and negative covenants, and events of default applicable to the Company and certain of its subsidiaries but did not include any financial covenants relating to the achievement or maintenance of revenue or cash flow. If an event of default occurred and was continuing, the lender could declare all amounts outstanding under the Senior Secured Term Loan due 2023 to be immediately due and payable. The Company received net proceeds of $146.6 million in September 2018, after deducting fees and expenses. In July 2020, the Company used $156.3 million of the proceeds from the Senior Secured Term Loan due 2026 to voluntarily settle the principal amount, $1.1 million accrued interest, and $5.2 million in early settlement premiums. As a result of this early extinguishment, the Company recognized a loss on extinguishment of debt of $7.3 million in the Consolidated Statements of Operations. Convertible Notes In December 2016, the Company issued at par value $250 million aggregate principal amount of Convertible Notes, which included the exercise in full of the $25 million over-allotment option granted to the initial purchasers of the Convertible Notes in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act (the "Note Offering"). Interest is payable semiannually on June 15 and December 15 of each year, beginning on June 15, 2017. The Convertible Notes will mature on December 15, 2023, unless earlier repurchased, redeemed, or converted in accordance with their terms. The Convertible Notes are convertible at the option of the holders of the Convertible Notes (the "Holders"), under certain circumstances and during certain periods, into cash, shares of the Company’s common stock or a combination thereof. The net proceeds from the Note Offering were $243.0 million, after deducting fees and expenses. In addition, the Company used approximately $13.5 million of the net proceeds from the issuance of the Convertible Notes to pay the cost of the capped call transactions ("Capped Call Confirmations") that the Company entered into in connection with the issuance of the Convertible Notes. In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components based on their relative values. The Convertible Notes were initially convertible into approximately 40.8 million shares of the Company’s common stock under certain circumstances prior to maturity at a conversion rate of 163.3987 shares per $1,000 principal amount of Convertible Notes, which represents a conversion price of approximately $6.12 per share of common stock, subject to adjustment under certain conditions. Holders may convert their Convertible Notes at their option at specified times prior to the maturity date of December 15, 2023, only if: •during any fiscal quarter commencing after March 31, 2017, if the last reported sale price of the Company’s common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is equal to or more than 130% of the conversion price of the Convertible Notes on the last day of such preceding fiscal quarter; •a holder submits its Convertible Notes for conversion during the five business day period following any five consecutive trading day period in which the trading price for the Convertible Notes, per $1,000 principal amount of the Convertible Notes, for each such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate of the Convertible Notes on such date; •the Company issues to all or substantially all of the holders of common stock rights options or warrants entitling then them for a period of not more than 60 calendar days after the date of such issuance to subscribe for or purchase shares of the common stock, at a price per share less than the average of the Last Reported Sale Prices of the common stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance or distributes to all or substantially all holders of the common stock the Company’s assets, debt securities or rights to purchase the Company’s securities which distribution has a per share value of exceeding 10% of the Last Reported Sale Price of the common stock on the Trading Day immediately preceding the date of announcement of such distribution; •the Company enters into specified corporate transactions; or •the Company has had a call for redemption, the holder can convert up until the second trading day immediately preceding the redemption date. The Convertible Notes will be convertible, at the option of the note holders, regardless of whether any of the foregoing conditions have been satisfied, on or after September 15, 2023 at any time prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date of December 15, 2023. During the first and second quarters of 2019, the Company entered into separate, privately negotiated Exchange Agreements with a limited number of holders of the Convertible Notes. Under the terms of the Exchange Agreements, the limited number of Holders agreed to exchange an aggregate principal amount of $247.2 million of Convertible Notes held by them in exchange for an aggregate of approximately 44.0 million shares of Company common stock, par value $0.01 per share. In addition, pursuant to the Exchange Agreements, the Company made aggregate cash payments of $1.3 million to the limited number of Holders to satisfy accrued and unpaid interest to the closing date of the transactions, along with cash in lieu of fractional shares. These transactions resulted in $215.0 million in additional paid-in-capital and common stock of $0.4 million on the Consolidated Balance Sheets as of December 31, 2019. Additionally, the Company recognized a loss on the exchange of debt of $40.6 million on the Consolidated Statements of Operations during the year ended December 31, 2019. During the second half of the year ended December 31, 2019, there were no additional debt conversion transactions. During the first and second quarter of 2019, the Company terminated the Capped Call Confirmations related to the exchange of the Convertible Notes for proceeds of $19.9 million. Interest Expense The following table sets forth interest expense recognized related to the Company's debt for the years ended December 31, 2020 and 2019 respectively:
(in thousands) |  | December 31, 2020 |  | December 31, 2019
Contractual interest expense |  | $ | 20,933 |  |  | $ | 16,483 |
Amortization of debt discount |  | $ | 1,267 |  |  | $ | 2,381 |
Amortization of deferred financing |  | $ | 527 |  |  | $ | 165 |
Effective interest rate of the liability component, Convertible debt |  | 10.6 | % |  | 10.6 | %
Effective interest rate of the liability component, Senior Secured Term Loan due 2026 |  | 8.4 | % |  | — | %
Effective interest rate of the liability component, Senior Secured Term Loan due 2023 |  | — | % |  | 10.2 | %

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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