CONTINGENT CONSIDERATION (GAINS) CHARGES, RESTRUCTURING CHARGES AND OTHER

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONTINGENT CONSIDERATION (GAINS) CHARGES, RESTRUCTURING CHARGES AND OTHER

Contingent consideration (gains) charges, restructuring charges and other for the three and nine months ended September 30, 2024 and 2023 summarized below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Flexion contingent consideration	$	(3,244)	$	2,793	$	(5,541)	$	(3,847)
Restructuring charges	1,193		173		7,724		1,109


Acquisition-related expenses	285		390		689		1,588




Total contingent consideration (gains) charges, restructuring charges and other	$	(1,766)	$	3,356	$	2,872	$	(1,150)

Flexion Acquisition Contingent Consideration

The Company recognized gains of $3.2 million and $5.5 million related to contingent consideration during the three and nine months ended September 30, 2024, respectively. The Company recognized a charge of $2.8 million and a gain of $3.8 million related to contingent consideration during the three and nine months ended September 30, 2023, respectively. See Note 9, Financial Instruments, for information regarding the method and key assumptions used in the fair value measurements of contingent consideration and more information regarding the changes in fair value.

Restructuring Charges

In February 2024, the Company initiated a restructuring plan to ensure it is well positioned for long-term growth. The restructuring plan includes: (i) reshaping the Company’s executive team, (ii) reallocating efforts and resources from the Company’s ex-U.S. and certain early-stage development programs to its commercial portfolio in the U.S. market and (iii) reprioritizing investments to focus on commercial readiness for the implementation of separate Medicare reimbursement for EXPAREL at average sales price plus 6 percent in outpatient settings and iovera° up to an additional $255.85 when providers administer iovera° in ambulatory surgical centers and outpatient settings beginning in January 2025 as part of the Non-Opioids Prevent Addiction In the Nation (“NOPAIN”) Act and broader commercial initiatives in key areas, such as strategic national accounts, marketing and market access and reimbursement. The Company recognized $1.2 million and $7.7 million of restructuring charges for the three and nine months ended September 30, 2024, respectively, related to employee termination benefits, such as the acceleration of share-based compensation, severance, and, to a lesser extent, other employment-related termination costs, as well as contract termination costs. The Company’s restructuring charges as of September 30, 2024, including the beginning and ending liability balances, are summarized below (in thousands):


	Employee Termination Benefits (1)		Contract Termination Costs		Total
Balance at December 31, 2023	$	—	$	—	$	—
Charges incurred	3,169		1,038		4,207

Cash payments made / settled	(1,487)		(20)		(1,507)
Balances at September 30, 2024	$	1,682	$	1,018	$	2,700
(1) During the three and nine months ended September 30, 2024, there was $0.8 million and $3.5 million, respectively, of employee termination benefits related to share-based compensation excluded from the table above as they are non-cash and recorded against additional paid-in capital.

In June 2023, the Company implemented a restructuring plan in an effort to improve its operational efficiencies. The restructuring charges are predominantly related to one-time employee termination benefits through a reduction of headcount, such as severance and related costs. During the three and nine months ended September 30, 2023, the Company recognized restructuring charges of $0.2 million and $1.1 million, respectively.

Acquisition-Related Expenses

The Company recognized acquisition-related expenses of $0.3 million and $0.7 million during the three and nine months ended September 30, 2024, respectively. The Company recognized acquisition-related expenses of $0.4 million and $1.6 million during the three and nine months ended September 30, 2023, respectively. These costs primarily related to vacant and underutilized Flexion leases that were assumed from the Flexion Acquisition.